Chile''s Antofagasta and Canada''s Barrick Gold are likely to win mining rights for the $3.3 billion copper and gold project, a senior provincial government official said on Sunday. The companies are partners in the Tethyan Copper Co (TCC) joint venture, which has 75 percent interest in the Reko Diq project in Balochistan province.
TCC has carried out exploration, but wants to expand its presence through mining. Balochistan has huge natural resources. However, growing anger over outsiders exploiting Pakistan''s biggest (in size) and poorest province makes it difficult for investors to gain access.
Separatists have, for decades, waged a low-level revolt over control of Balochistan''s resources, which they say are unfairly exploited by the country''s richer and more powerful provinces. Reko Diq holds an estimated 5.9 billion tons of mineral resources with average copper grade of 0.41 percent and average gold grade of 0.22 grams a ton, according to data released by Antofagasta.
TCC completed exploration on Reko Diq last year, and submitted a feasibility report for mining. A senior Balochistan government official told Reuters that TCC''s request for a mining licence was under consideration.
"If they fulfil the conditions, then we have no objection at all," Balochistan Chief Secretary Ahmed Bakhsh Lehri said.
No other companies have applied for mining permission, mining and government officials say. Last week, the Balochistan government announced that it would set up a facility to refine copper and gold concentrates extracted from Riko Diq. TCC has said it would sell the concentrate from Reko Diq to the provincial government on commercial basis, if it gains permission to mine.
In a bid to secure the deal, TCC has also offered to arrange financing for the government''s 25 percent share of investment in the project through a soft loan and to pay the interest, according to a company document seen by Reuters. The first stage of the project, which is hoped to start production in 2015, would produce 200,000 tons of copper, and up to 300,000 ounces of gold a year, the company said.