Barrick Gold reassesses Balochistan project amid rising security risks and local tensions

Barrick Gold’s board of directors is currently reevaluating all aspects of its flagship gold and copper project in Balochistan, following a significant decline in security conditions and a recent increase in violent attacks in the region. The company’s chief executive, Mark Hill, announced this development during a post-earnings conference call with analysts. The reassessment is a response to the deteriorating security landscape, which poses a threat to the project’s progress and safety.

According to Hill, the company has initiated a comprehensive review that will encompass several critical areas, including the allocation of capital, security arrangements, construction timelines, and the overall investment framework. This process is already underway, with Barrick Gold aiming to better understand the potential risks and challenges before proceeding further. Hill emphasized that the company would provide an update once the evaluation is complete and the implications are clearer.

The ownership structure of the Reko Diq project is divided among multiple stakeholders. Barrick Gold holds a 50 percent stake, while three Pakistani federal state-owned entities share a combined 25 percent. The remaining 25 percent belongs to the government of Balochistan. Barrick Gold operates under an agreement with the Pakistani state to develop the deposit, which is considered one of the largest undeveloped copper and gold reserves in the region.

Since taking control of the Reko Diq project, Barrick Gold has also assumed operations at the Saindak project following a formal agreement signed with the Pakistani government in 2022. These initiatives are part of the company’s broader strategy to develop mineral resources in the area, contributing to Pakistan’s economic growth prospects. However, despite the economic potential, the projects have faced local resistance and concern.

Local communities have expressed ongoing grievances about land use, access to economic benefits, and employment practices related to the mining projects. Community representatives have accused the projects of offering limited benefits to residents and of favoring non-local workers for job opportunities. Both company and government officials maintain that the projects are designed to bring long-term economic gains, but tensions and dissatisfaction persist among local populations.

The reassessment of the Reko Diq project comes amidst escalating security threats in Balochistan. Over the past week, the Baloch Liberation Army, a pro-independence group, has intensified its activities, launching coordinated attacks across multiple districts, including Chagai, where the project is situated. The group’s actions are part of the second phase of its “Operation Herof,” which aims to challenge the presence of foreign and Pakistani companies operating in the region.

In statements issued during and after “Operation Herof,” the Baloch Liberation Army warned foreign and Pakistani companies to cease operations in Balochistan. The group alleged that resource extraction activities are being carried out without the consent of the Baloch people and accused international investors of supporting Pakistan’s control over the territory. The Pakistani government, however, has rejected these claims and maintains that operations continue with respect for local sentiments.

There has been no official response from Barrick Gold regarding the statements made by the Baloch Liberation Army. Pakistani authorities have also not commented publicly on the company’s internal review. Nonetheless, officials have reiterated that security for strategic projects remains a top priority, acknowledging the risks posed by ongoing violence and political instability. These developments underscore the mounting risks facing large-scale mining investments in Balochistan.