Barrick Gold's Major Copper Project Faces Delays Amid Security Concerns

Barrick Gold suspends major work at its flagship Reko Diq project due to security issues in Pakistan, delaying production to 2029 and threatening a multi-billion dollar budget.

Barrick Gold Corporation has announced a significant slowdown in development at its flagship Reko Diq copper-gold project. The mining giant is largely suspending work on the venture due to escalating security risks in Pakistan, a move that jeopardizes its ambitious timeline and casts doubt on the project's multi-billion dollar budget.

Financial and Operational Implications

The delay at one of the world's largest undeveloped copper deposits carries serious financial consequences. The company has already warned of significant potential cost increases for a project designed to generate an estimated $70 billion in free cash flow over its 37-year mine life.

Previously, Barrick's investment estimates for the full development were:
* Initial phase capital expenditure: $5.6 to $6.0 billion
* Second phase investment: $3.3 to $3.6 billion

These figures are expected to be revised substantially upward following a comprehensive project review now underway.

Safety Concerns Force Timeline Shift

The decision to decelerate construction stems from the deteriorating security situation in Pakistan's Balochistan province. Geopolitical tensions in the broader Middle East have exacerbated local instability, making it impossible for Barrick to maintain the original construction pace. While essential community social programs will continue, major on-site activity will be scaled back.

Consequently, the targeted production start date has been pushed back. Originally scheduled for 2028, first output is now not expected before 2029. Management plans to complete a full reassessment of the situation, project scope, and financing by mid-2027.

Setback for Copper Growth Strategy

This development deals a notable blow to Barrick's strategic goal of becoming a top-tier copper producer. The long-term growth narrative for its copper portfolio is now delayed by at least one year.

However, operational progress at the Lumwana mine expansion in Zambia offers a partial counterbalance. Work there is slightly ahead of schedule, with the machinery fleet for the 2026 expansion already being delivered. As a result, Barrick's near-term copper production guidance for the current year remains unchanged at 190,000 to 220,000 tonnes.

Market Reaction and Next Steps

On the markets, Barrick's stock closed at CAD 58.02 yesterday, following a weaker monthly performance. This price places the equity approximately six percent below its 50-day moving average.

The company has stated it will not provide a definitive update on revised schedules and adjusted capital requirements until after the project review concludes in mid-2027.