TCC Reko Diq Mining Project – Largest ever Foreign Direct Investment mining project in Pakistan
The Reko Diq Mining Project is a US$ 3.3 billion investment project that promises to build and operate a world class copper-gold open-pit mine in the northwest area of Balochistan. The project has an estimated mine life of 56 years. The annual production of the TCC Reko Diq project is estimated at 200,000 tons of copper and 250,000 ounces of gold from 600,000 tons of concentrate. In order to achieve this production rate approximately 110,000 tons of ore shall be processed daily. High-efficiency mining techniques and cutting-edge technology shall be used to achieve economic feasibility for the TCC Reko Diq project.
The Reko Diq project area is located in Pakistan’s sparsely populated western province of Balochistan. The project site has an average elevation of around 900 m and is mostly low relief, thinly populated desert. Hot summer (40-50°C) and cool winters (to -10°C) with less than 40 mm precipitation (winter rain and minor snow) allow year round operations apart from periods of high wind and dust/sand storms. Access to the project is via the Zahidan - Quetta highway also known as the London Road.
Current status of Reko Diq Project
TCC completed an extensive and detailed bankable feasibility study establishing the basis for mine development at Reko Diq during August 2010 and submitted a Mining Lease Application in February 2011, along with an Environmental and Social Impact Assessment (ESIA) report. Progress on the project came to a standstill in November 2011, when the Government of Balochistan summarily rejected the application by TCC's local operating subsidiary, Tethyan Copper Company Pakistan (Private) Limited (“TCCP”), for a mining lease in respect of Reko Diq. TCC believes that, under the Chagai Hills Joint Venture Agreement (“CHEJVA”) between TCC and the Government of Balochistan, as well as under the Balochistan Mineral Rules 2002, TCCP was legally entitled to the mining lease subject only to “routine” government requirements.
In order to protect its legal rights, in November 2011 TCC commenced international arbitration proceedings at two forums: one against the Government of Pakistan with the International Centre for Settlement of Investment Disputes, asserting breaches of the Bilateral Investment Treaty between Australia (where TCC is incorporated) and Pakistan, and another against the Government of Balochistan with the International Chamber of Commerce, asserting breaches of the CHEJVA.
Despite the initiation of arbitral proceedings in order to protect its rights, TCC remains hopeful of an opportunity to reach a negotiated resolution to the case. It is TCC’s position that a negotiated grant of the lease would provide the best outcome for the Company and the people of Balochistan and Pakistan as a whole.
Future Developments: Setup of Mining Operations
The next steps to advance the project will be taken by TCC as soon the mining lease is granted, followed by project financing and construction of ancillary infrastructure to make the mine operational.
The TCC Reko Diq Project shall consist of 4 main operations components:
Mining Technique Used
- An open-pit mine.
- A processing facility.
- A concentrate pipeline to transport the product from the mine site to the port of Gwadar, and a dedicated marine terminal facility at the port for storage and transfer to shipping vessels for supply to smelters throughout the world.
- A project village for TCC employees.
The mining operation at Reko Diq is modelled on an open pit mine utilizing a conventional ‘truck and shovel’ technique. This means that giant mechanical shovels shall be used to dig out the copper ore which shall then be loaded onto 360 ton trucks that will then haul tons of copper ore on a daily basis from the mine to the processing facility. At the processing facility the rocks (ore) shall be crushed in giant crushers. This crushed ore shall then be transferred to a fine-grinding stage where it will be converted into a powdered form. This powder, containing small quantities of copper and gold shall pass through a separation process called ‘flotation’, resulting in a 30% concentrated slurry of copper and traces of gold.
This concentrate is the final product of the Reko Diq Mining Project which shall then be transported to the Gwadar port in Balochistan via a 682 km long underground slurry pipeline. This will be the longest pipeline in the world transporting copper concentrate. The scope of operations at the Gwadar port shall be limited to receiving, de-watering, storing and ship-loading concentrate for onwards selling to smelting units globally.
In order to keep the process running round the clock the average mining rate will be about 293,000 tons per day of ore and waste and, at this rate, the open-pit mining will continue for 46 years, thereafter the ore processing will continue for another 10 years utilising the ore stockpiles created over the years during the mining operation. In the processing plant about 110,000 tons of ore per day will be processed through flotation process. The plant will produce approximately 600,000 tons of copper concentrate a year, which will contain 28-31% copper and 7–22 g/ton gold. That translates to about 200,000 tons copper and 250,000 ounces of gold per year.
Mining Technology Deployed
The Reko Diq mine will employ state-of-the-art mining equipment, support systems and maintenance practices. To operate this project latest technological innovations will be introduced, putting the Reko Diq project at the cutting edge of technology. This will include 360 tons haul truck equipped with computer controlled engine management systems, and the Reko Diq process plant will be one of the only few hard-rock mines in the world to apply High Pressure Grinding Rolls (HPGR) between crushing and milling. Use of latest technology is critical to create efficiencies in the processes to make Reko Diq a long term economically viable project.
Training and Technology Transfer
Significant skill and technology transfer shall take place during the life of the mine in Balochistan. TCC is committed to skill development and training of local employees to ensure that indigenous capabilities develop along with the technology transfer. TCC has on-site training programs for its employees and off-site training opportunities are provided within training institutes in Pakistan and also abroad.
TCC has an integrated training program comprising a basic skills development module and a specialist vocational training module. The Basic Skills Development Module shall focus on development of basic safety, team and leadership skills-set in order to support a safe, collaborative and positive work environment. This module shall accommodate maximum candidates and act as a feeder program for the specialized vocational training module. The selected trainees from the Basic Skills Module shall be inducted into the Vocational Training Module. Specialist training across trades required within the mine development and mining operations phases shall be imparted to the selected trainees. Specialized training shall include electrical, mechanical, construction, heavy equipment operations and an array of other technical skills essential to the project.
The Basic Skills Development will commence prior to the start of construction and continue throughout the life of mining operations. This shall be followed by the Vocational Training Module in preparation for the construction phase and finally, the operational-readiness training programs will prepare selected employees for running the mine after commissioning.
The maintenance and repairs contracts shall expose the local service providers to world class technology and state-of-the-art-equipment. This will help flourish and advance the locally and nationally available technical capacity, improve academic and vocational training curriculum and eventually improve employability and mining industry standards.
Ancillary Infrastructure Development
From mining to the processing of the ore requires considerable amount of electricity. Since there is no power supply in the area, the project will have its own power supply. A 189 MW power plant is planned to be built at the site to provide uninterrupted supply of electricity for the project, ancillaries and the residential colony. Heavy furnace oil based combined cycle reciprocating engines will be to be installed to provide 99.5% availability.
The concentrate produced at the processing plant will be further fluidized into a 53-57% slurry and transported to the Gwadar port via a pipeline. The main features of the pipeline are:
Underground pipeline 682 km from Reko Diq connecting to Gwadar port.
Leak detection equipment will be installed and the pipeline will be encased in concrete at river crossing.
Three booster stations will be established along the route.
A number of facilities will be built at Gwadar port in order to handle the concentrate for its final shipment for export. These include:
- De-watering facilities and pressure filters; wherein concentrate is removed from the slurry.
- Warehouse consisting of a covered shed which will store the dried concentrate.
- Conveyor belt arrangement to transport the concentrate from storage yard to the shipping berth.
- Ship-loader to load the ship with the concentrate cargo.
Due to long life of Reko Diq Project, TCC will build a permanent village to provide lodging at the camp site for Reko Diq workers. Design of the proposed village takes into consideration the local social and cultural milieu. This village will accommodate up to 10,000 persons during construction phase and up to 3,000 for operations phase.
Local materials and labour will be used for the construction of this village at a sheltered location, 10 km from mine site to reduce wind, dust and noise.
The facilities include:
- Education and sports facilities
- Semi private courtyards for after hours socializing
- Dining halls and retail outlets