Pakistan mining pact threatened by insurgency

Mining is the easy part here. The hard part is everything around it — roads, security, financing, politics, and the basic question of whether foreign investors believe Pakistan can keep a giant project alive in Balochistan. That is why the fight around Reko Diq matters so much. It is not just a mine. It is Pakistan’s biggest argument that global capital should still come in. ### What is Reko Diq, exactly? Reko Diq is a huge copper-and-gold deposit in Balochistan, near Pakistan’s borders with Iran and Afghanistan. Barrick Mining is developing it with Pakistan’s federal and provincial governments, and the project has been pitched as one of the world’s largest undeveloped copper-gold assets. Barrick had previously targeted first production by the end of 2028, with Phase 1 alone estimated at $5.6 billion to $6.0 billion and Phase 2 at $3.3 billion to $3.6 billion. ### Why is security suddenly the story? Because the insurgency is no longer background noise. Baloch separatist groups — especially the Baloch Liberation Army — have been hitting security forces, infrastructure, and routes tied to the state’s presence in the province. After coordinated attacks in early February killed more than 50 civilians and security personnel, the provincial government said it would redesign security around mineral zones and raise a dedicated force for those areas. ### What changed at the mine? Barrick itself blinked. On April 2, the company said it was slowing development activity, keeping the project under review until mid-2027, and reassessing security, financing, scope, and timeline. It also warned that total capital costs and the schedule could rise materially from what had been disclosed before. That is the big tell — when a miner starts talking less about geology and more about security into a different risk category. ### Where does the U.S. fit in? Washington has been trying to secure more critical-minerals supply outside China-heavy chains, and Reko Diq fits that logic. In February, Pakistan said it had secured about $1.3 billion in U.S. financing support for the project, a major vote of confidence for a mine that Islamabad wants to use as the anchor of a broader minerals strategy. But, money gets slower and more expensive. ### Why does inflation matter to a mining story? Because megaprojects do not sit outside the economy. Pakistan’s inflation jumped back into double digits in April, hitting 10.9%, driven by fuel, energy, and broader supply shocks. That raises operating costs, strains households, and makes politics more brittle. A government trying to sell foreign investment as a national win has a harder job when electricity, transport, and food are all getting pricier at once. ### Is this just Pakistan’s problem? Not really. Copper is strategic now — for grids, EVs, and defense-adjacent supply chains — so delays at a deposit this large matter beyond Pakistan. At the same time, the World Bank has warned that the Middle East war could drive the biggest energy-price surge in four years, which feeds directly into import bills and investor nerves in countries like Pakistan. So the mine is caught in a local insurgency and a regional macro shock at the same time. ### Can Pakistan still save the project? Yes, but the fix is not a press conference. Pakistan needs to prove that security around Reko Diq is durable, not temporary, and that the project’s economics still work after delays and higher costs. Basically, investors can tolerate danger or inflation for a while. They hate uncertainty more. ### Bottom line? Reko Diq was supposed to be the state itself — can it protect the asset, calm the province, and keep the economics intact long enough for the money to stay?