| Updated at: 2222 PST, Monday, October 25, 2010|
DUBAI: A $3 billion foreign joint-venture copper and gold mining project in Baluchistan will go ahead as planned despite plans by the provincial government to cancel it, an executive said on Monday.
The provincial government said earlier this year it would cancel the project to ease anger in Pakistan's biggest but poorest province over outsiders' exploitation of its natural resources.
"The project is going ahead and will not be cancelled, we are now in talks with the government and we expect production to start by the end of 2015," Gerhard Von Borries, chief executive of Tethyan Copper Co. Ltd., said on the sidelines of an industry event in Dubai.
Tethyan Copper Co. Ltd is a joint venture between Canada's Barrick Gold and Chile's Antofagasta Plc, one of the world's largest copper miners.
It had been granted exploration licence for Reko Diq site in 2006. The site's ore reserves, a mixture of minerals including gold and copper, are estimated at more than 4 billion tonnes.
"The copper deposits are relatively low grade and we estimate the cash cost to be 85 cents per pound," Borries said.
"Once production starts we are planning to double our investment in the project, so we'll add another $3 billion," he added.
The provincial government owns 25 percent of the project, while the remaining is owned by Tethyan Copper, Borries said.
"Under the current plan the government would need to come up with its own equity, but we can also finance them with a very low interest rate ... we are also looking at employing 90 percent of the workforce from the local community."
Baluchistan is Pakistan's biggest province in terms of area but only has an estimated 10 million to 12 million of the country's 165 million people.
The province is home to one of the largest copper deposits in the world. China's Metallurgical Construction Co. (MCC) operates the Saindak mine, which has estimated ore reserves of 412 million tonnes.