Barrick Mining (TSX:ABX,NYSE:B) has delayed development of its massive Reko Dick copper project in Pakistan until mid-2027, citing regional security risks due to the war in the Middle East.
The firm announced widespread delays in the project in a April 2nd updateStating that “all aspects of the project are being reviewed in view of increased security risks and increased security incidents.”
Reco Dick, which has an equal partnership with Pakistani officials, is estimated to have reserves of 15 million tonnes and was previously targeted for first production by the end of 2028. Barrick expected the mine to generate more than US$70 billion of free cash flow and US$90 billion of operating cash flow over its 37-year lifetime.
The company said it expected a “significant increase in the total estimated capital budget and timeline previously stated for the project”.
The initial capital cost of Phase 1 was estimated between US$5.6 billion and US$6.0 billion, with Phase 2 requiring an additional US$3.3 billion to US$3.6 billion.
While the company noted that it “considers it necessary to slow down development activity and continue to review the project until mid-2027,” Phase 1 will proceed under active management with reduced capital expenditures.
Pullback comes when commodity market is ready Tehran’s response Trump’s deadline: Reopen the Strait of Hormuz or face expanded military strikes.
The blockade of the vital shipping chokepoint has already sent global energy prices soaring, while also triggering recession risks that are aggressively revaluing industrial metals.
Analysts at Goldman Sachs (NYSE:GS) issued a dire warning about the near-term trajectory of copper if the blockade continues.
“If Straits flows remain disrupted longer than in our base case, we see near-term risks tilted to the downside, which would keep energy prices higher for longer and global economic growth would likely slow,” Goldman analysts said in a note. Quoted by Bloomberg.
Despite macroeconomic threats, copper traded higher on Tuesday (April 7), boosted by physical demand from China ahead of its peak season. Benchmark three-month copper rose 0.55 per cent to US$12,428 per metric tonne on the London Metal Exchange (LME). In Asia, the most active copper contract on the Shanghai Futures Exchange (SHFE) rose 0.34 percent to close at 96,560 yuan (US$14,049.38) a tonne.
Similar dynamics are providing a base for the gold market. Bullion rose 1 per cent on Tuesday (April 7), reversing two-day losses, as a weaker US dollar and aggressive buying by the People’s Bank of China (PBOC) offset increased liquidity in the market.
Official data showed PBOC increased its bullion reserves For the 17th consecutive month, purchases of 160,000 troy ounces, or about 5 tons, were made in March. This is the bank’s largest monthly purchases in more than a year and extends the accumulation cycle that began in November 2024.
In February, the PBOC added 30,000 troy ounces, bringing its total holdings at that time to 74.22 million fine troy ounces.
Continued buying from Beijing is acting as an important buffer for gold against the volatility of the Gulf conflict.
While global central bank net purchases dropped to five tonnes in January – below the 12-month average of 27 tonnes – analysts expect the accumulation to continue.
“Volatile gold prices and the holiday season may have put some central banks on hold,” Marisa Saleem, an analyst at the World Gold Council (WGC), wrote in an article. recent notes. “However geopolitical tensions, which show little sign of abating, are likely to continue to accumulate through 2026 and beyond.”
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Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
