Pakistan Separatists Unravel Barrick’s Reko Diq Plans

Why It Matters

Reko Diq is a litmus test for U.S. critical‑minerals cooperation with Pakistan and a potential catalyst for shifting regional investment away from China. Its delay underscores how geopolitical risk can derail multi‑billion‑dollar resource projects.

Key Takeaways

• BLA raid halted access routes to Reko Diq site.
• Project timeline pushed to mid‑2027 due to security.
• $9 billion capex makes Reko Diq one of largest undeveloped mines.
• Expected $74 billion free cash flow over 37 years.
• Half of future proceeds split between federal and Balochistan governments.

Pulse Analysis

The Reko Diq deposit, with 1.5 billion tonnes of proven and probable reserves, ranks among the world’s largest undeveloped copper‑gold assets. Its development is central to a broader U.S.–Pakistan strategy to diversify critical‑minerals supply chains and counterbalance China’s entrenched presence in Balochistan. By allocating half of the mine’s future revenue to the federal government and the province, the project also serves as a political bridge, promising economic uplift for Pakistan’s poorest region.

However, the security environment has deteriorated sharply. A coordinated assault by roughly 500 BLA fighters in January blocked key transport corridors, prompting Barrick to postpone major construction phases to mid‑2027. The insurgency reflects deep‑seated grievances over resource distribution and limited local benefits, fueling a broader nationalist surge among younger, educated Baloch. Investors now weigh the heightened geopolitical risk against the project's upside, prompting tighter risk‑mitigation clauses and calls for stronger government security guarantees.

Financially, Reko Diq’s two‑stage plan projects $5.5 billion in first‑stage capex and $3.5 billion for a second phase that would double output. With an after‑tax net present value of about $6.5 billion and a 17% internal rate of return, the mine could generate roughly $74 billion in free cash flow over its 37‑year life. For Barrick, securing the project would bolster its cash‑flow profile and reinforce its position in the critical‑minerals arena, while also delivering a strategic win for U.S. policy in South Asia.