KARACHI: Pakistan on Sunday approved measures to ensure resuming mining at the Reko Diq project, one of the world's largest underdeveloped sites of copper and gold deposits, the finance ministry said.

The approval comes days after Pakistan's Supreme Court endorsed a settlement for Barrick Gold to resume mining at Reko Diq. The endorsement was a condition of the agreement for Barrick to restart work on the project in the southwestern province of Balochistan, bordering Afghanistan and Iran, in which it will invest $10 billion.

A meeting of the Economic Coordination Committee (ECC) of the cabinet on Sunday considered and approved two important agenda items related to Reko Diq, “thus paving the way for early start of the Reko Diq Project,” a statement issued by the finance ministry said.  

According to the terms of the agreed settlement, the ECC allowed the Finance Division to issue directives for the deposit of the “aggregate amount of interest to the sum of over $22.72 million in the escrow account from March 31, 2022 to December 15, 2022.”  

The ECC also allowed the Finance Division to arrange the amount of interest payable for the Balochistan government’s share in the project, amounting to $8.52 million from a loan of Rs65 billion already raised by the Government Holdings Private Limited (GHPL), according to the ministry's statement.  

The ECC also approved a proposal on a funding plan by the federal government for the share of Balochistan in the Reko Diq Project. As per the proposal, an overall funding commitment of $717 million over the period of 6 years will be provided by the federal government.

The Reko Diq mine is located in Pakistan’s southwestern Baluchistan province. The development of the project was suspended in 2011 after Pakistan denied the Tethyan Copper Company, a joint venture between Barrick Gold of Canada and Antofagasta Minerals of Chile, license to continue work.

The country’s Supreme Court then blocked the Tethyan Copper Company (TCC) in 2013 from developing Reko Diq following a court case into the procedure by which the contract had been awarded.  

However, Pakistan reached an out-of-court settlement with the mining firms in March this year to avoid paying a $9 billion penalty announced by the World Bank’s arbitration court.

Pakistan’s Supreme Court on Friday ruled in favor of the new agreement, observing that there was nothing illegal in it and it was not in violation of the court’s 2013 judgment.