Barrick Gold’s (TSX:ABX) proposed framework agreement with the Pakistani government over the Reko Diq copper-gold deposit to develop and bring it to production is nearing conclusion, the company says. Barrick plans to develop the project in phases, the first of which would include a plant with a capacity of 40 million tonnes per year. The company says that capacity has the potential to double within just five years. Reko Diq is located close to the borders of Iran and Afghanistan and is said to be one of the largest undeveloped deposits of copper-gold in the world. The Pakistani Government and the provincial government of Balochistan signed an agreement in principle with Barrick earlier in 2022 to restart the project.

All told, the project could cost $7 billion, with a $4 billion investment for the initial crush development, including a milling and flotation circuit. Barrick Gold has a 50% stake and is the planned project operator. Both governments will own a quarter of the project. Now, the definitive agreements that will underlie the framework agreement are being finalized, at which point the company can move forward with a feasibility study. Barrick Gold commented in a statement on the project: “Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process expected to take two years. Construction of the first phase will follow that with the first production of copper and gold expected in 2027/2028.”

Once operational the operational life of the mine should be at least 40 years and is expected to create 7,500 jobs during the construction phase alone, plus 4,000 more long-term jobs once the project is commissioned.

New copper projects are rare, and one of this size could have a significant impact on the copper market. While commodity prices have temporarily pulled back in the wake of some market jitters, analysts say there is still plenty of room for copper prices to move higher. This is due to low supply, high demand, and a lack of new projects in the pipeline. This project aims to change that.

The expected production at Reko Diq would make it one of the world’s largest copper mines. It is also a very significant project for Pakistan, which has been trying to woo international investors and increase its mining output in an effort to boost growth and development. The country’s Prime Minister, Shehbaz Sharif, has made mining one of his government’s key priorities.