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Metal reserves of $65b located in Balochistan

"This is a major discovery by all international standards," a senior government official said. The President or the Prime Minister will make a formal announcement after completing legal formalities, he said.

The Rekodiq mining area has estimated reserves of two billion tonnes of copper and 20 million ounces of gold. According to current market prices, the value of this deposit is about $65 billion. It would generate thousands of jobs.

The size of Pakistan's national economy (GDP) at present is about $104 billion. Balochistan government has a 25 per cent stake in the Rekodiq project. The remaining 75 per cent stake has now been taken over on 50:50 basis by Antofagasta of Chile and Barrick Gold of Canada.

"The discovery has ranked Rekodiq among the world's top seven copper reserves," said an industry expert associated with the ongoing security operation in the province. "This is a quantum jump....the mineral resources may contribute significantly to the national economy despite the inadequate support this sector gets from the government," he added.

The Rekodiq project is estimated to produce 200,000 tonnes of copper and 400,000 ounces of gold per year, at an estimated value of $1.25 billion at current market prices. Copper and gold are currently traded at about $5000 per tonne and $600 per ounce respectively in the international market.

The project will, however, require an investment of about $1 billion to start commercial production by 2010. It has so far cost about $50 million to prove the two billion tonnes of copper and 20 million ounces of gold.

The presence of a mineral deposits in the area was identified by the Geological Survey of Pakistan in early 1990s in collaboration with BHP Billitonn of Australia.

Later in 2000, Tethyan Corporation (TCC) of Australia took over the project from BHP and invested $30 million by raising funds through an international listing and drilled over 75,000 metres to prove the reserves.

TCC has recently been taken over by two of the world's largest copper and gold mining firms - Antofagasta of Chile and Barrick Gold Corporation of Canada. The market capitalisation of Barrick alone is estimated at over $25 billion. This is the first private sector-funded mining venture in Pakistan's history.

The chairmen of the two mining majors — Jean Paul Luksic of Antofagasta and Gregory Charles Wilkings of Barrick — also had a meeting with Prime Minister Shaukat Aziz recently to inform him about their successful take over of TCC at 158 million Australian dollars (about $130 million or Rs8 billion).

The prime minister conveyed them the willingness of Pakistan to allow its resources to be tapped by foreign investors. He said the logistics chain would be improved throughout the country to facilitate the movement of cargo. Gwadar Deep Sea Port would be a hub for export of mining products from Balochistan.