‘Antofagasta, Barrick likely to win Reko Diq project mining rights’

ISLAMABAD: Chile's Antofagasta and Canada's Barrick Gold are likely to win mining rights for a $3.3 billion copper and gold project in Pakistan, a senior provincial government official said on Sunday.

The companies are partners in the Tethyan Copper Co (TCC) joint venture, which has a 75 percent interest in the Reko Diq project in Balochistan province.

TCC has carried out exploration but wants to expand its presence through mining.

Reko Diq holds an estimated 5.9 billion tonnes of mineral resources with an average copper grade of 0.41 percent and an average gold grade of 0.22 grams a tonne, 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 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 a 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 tonnes of copper and up to 300,000 ounces of gold a year, the company said.

Copyright Reuters, 2011