Pakistan is rich in mineral resources and is estimated to possess significant deposits of gold, copper, and other minerals. However, the mineral development sector remains underdeveloped. The country is unable to capitalise on its own mineral resources. This is best illustrated in Balochistan, home to Reko Diq, considered to be the world’s fifth-largest gold mine and one of the world’s largest underdeveloped copper-gold deposits.

According to the Geological Survey of Pakistan, Reko Diq holds more than 3,000 million tonnes of mineralised material. This material possibly contains around 18 million tonnes of copper and 35 million ounces of gold, making Reko Diq a dynamic opportunity for Pakistan to translate its mineral wealth into economic assets. In spite of this, the economic gains through these locations with vast mineral resources are constrained by many structural and security challenges.

Reko Diq became one of the most significant projects, with hopes to increase the country’s foreign investment, exports, foreign exchange, and employment opportunities. At the same time, the mining sector in Pakistan is not thriving as it should. The mining operations, infrastructure development, and logistics are at risk due to persistent militancy and instability in the province. This ultimately leads to negative economic consequences for the country. Therefore, the insecurity in Pakistan inhibits the exploitation of its own resources.

The Evolution of Reko Diq

Reko Diq, meaning “sandy dunes” in the Balochi language, is a significant project not merely because of its conventional gold mine but also because of vast mineral resources. In 1993, the Balochistan Development Authority (BDA) and BHP Minerals International Exploration entered into an agreement called the Chagai Hills Exploration Joint Venture Agreement (CHEJVA). Through the 2006 novation agreement, Tethyan Copper Company (TCC) later replaced BHP.

During 2011, the project was halted due to a dispute over the mining lease agreement between Pakistan and TCC, where the Supreme Court of Pakistan declared the agreements invalid in 2013. TCC initiated international arbitration. ICSID ruled against Pakistan. In July 2019, an ICSID tribunal awarded approximately $5.97 billion against Pakistan in damages. This episode created a significant fiscal and reputational issue. Nevertheless, in 2022, Barrick Company, the Balochistan government, and the government of Pakistan restarted the project and reconstituted the framework. The reconstitution was completed in December 2022.

According to the reconstitution, Barrick owns 50%; 25% is owned by three Pakistani........

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