ISLAMABAD: Pakistan and Australia on Tuesday discussed the possibility of an Intergovernmental Agreement (IGA) for structured, long-term cooperation in Pakistan’s mining and mineral sector.
The IGA between the two sides was proposed by Petroleum Minister Ali Pervaiz Malik here during his meeting with the new Australian High Commissioner (AHC) to Pakistan, Timothy Kane.
It builds on a July 2025 Australian proposal made through former AHC Neil Hawkins for collaboration between Australian universities, mining firms, and Pakistani institutions to provide specialised training programmes in modern mining techniques and services and enhance local expertise and support Pakistan’s mining sector development.
An official statement said the new AHC Kane and the petroleum minister discussed avenues for enhanced bilateral cooperation in the mining and gemstone sectors. The minister welcomed the strong interest of Australian companies in Pakistan’s mining sector and highlighted the country’s immense untapped mineral potential, particularly in the Tethyan Belt.
“He proposed the possibility of an IGA between Pakistan and Australia to promote structured and long-term cooperation in the mining sector,” the statement said.
Discuss possibility of long-term cooperation agreement to tap country’s vast mineral potential
Australia had been operating in Pakistan’s mineral and natural resources sector, almost in all resource-rich regions, including Balochistan, Gilgit-Baltistan and Azad Kashmir, mostly in research and exploration and identified critical reserves in copper, gold, coal, zinc and other precious resources, including oil and gas.
Australian BHP Billiton’s joint venture with the Geological Survey of Pakistan had led to the discovery of the multi-billion dollar Reko Diq copper-gold deposits, now being developed for commercial production by Barrick Gold Corporation of Canada. BHP had left Pakistan under its global restructuring almost two decades ago.
Mr Malik briefed the new envoy about the government’s efforts to develop and formalise the gemstones sector to unleash its true potential for value addition, exports, and employment generation.
The AHC reiterated that Australian companies were already actively involved in the Reko Diq project, and additional Australian firms had shown keen interest in joining the project. He said the Australian companies would be encouraged to participate in the Pakistan Minerals Investment Forum (PMIF), expressing hope for a strong Australian presence at the event.
The diplomat highlighted the growing global importance of copper and gold for the energy transition, adding that Pakistan’s mining sector had attracted significant international attention. He also expressed “optimism for collaboration in the gemstones sector through knowledge exchange, training, and technical assistance”, the statement said.
The two sides also discussed the recent visit of the petroleum minister to Australia for the International Mining and Resources Conference (IMARC) and the fruitful discussions with leading and junior Australian mining companies on investment and cooperation opportunities in Pakistan’s minerals sector. The two sides agreed to strengthen bilateral cooperation in the mining and gemstone sectors for mutual benefit.
The presence of mineral deposits in the Reko Diq area was identified by the Geological Survey of Pakistan in the early 1990s in collaboration with BHP Billiton of Australia. Later in 2000, Tethyan Corporation (TCC) of Australia took over the project from BHP and invested $30 million by raising funds through an international listing and drilled over 75,000 meters to prove the reserves.
The TCC was subsequently taken over by two of the world’s largest copper and gold mining firms — Antofagasta of Chile and Barrick Gold Corporation of Canada for A$158 million ($130m) at the time. The agreement between Pakistan and the two mining firms signed in the Musharraf era ran into trouble, leading to international arbitration followed by an out-of-court settlement for penalties and project revival. In the process, the Reko Diq project production, due in 2010, was delayed by at least 15 years.
It was announced at the time of discovery by GSP and BHP that the Reko Diq mining area had proven estimated reserves of two billion tonnes of copper and 20 million ounces of gold, valued at $65bn at the time.
The recent feasibility studies completed by Barrick have also established that the project would have a 45 million tonnes of throughput per annum (Mpta) for the first five years and then 90 Mpta for the following 32 years of the second phase. Based on existing reserves, the Reko Diq project is expected to yield production of 13.1m tonnes of copper and 17.9m ounces of gold over the life of the mine (100pc basis), according to state-run Oil and Gas Development Company Ltd (OGDCL), one of the shareholders.
The feasibility study has also confirmed a lucrative 25pc rate of return on investment on one of the biggest copper-gold projects. Under the updated feasibility study, Phase 1 is planned to process 45m tonnes of mill-feed annually (Mtpa) from 2028. Previously, it was estimated to be close to 40m tonnes. By 2034, Phase 2 is planned to double the processing capacity to 90Mtpa.
Published in Dawn, January 28th, 2026
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