A Turning Point: The Barrick Settlement And What It Means For Investors In The Mining Sector Of Pakistan

In March 2022, Pakistan reached a landmark agreement with Barrick Gold and its partners to reconstitute the Reko Diq copper-gold project in Pakistan's province of Balochistan. This settlement ended years of legal dispute, including a massive arbitration award against Pakistan, and opened the door to what the authorities hope will be a new era of large-scale mining and foreign investment in the country.

For investors, this marks more than just a single project: it signals that Pakistan is seeking to rebuild trust, reform its investment-regime, and provide clearer guarantees for foreign capital.

What Has Changed for Investors

1. Legislative Protections

The federal government passed the Foreign Investment (Protection and Promotion) Act 2022 which grants approved foreign investments strong protection. According to one summary, "The bill... protects investors from unnecessary court proceedings" and offers a framework for foreign investment protection.

Under the 2022 Act and related policies, approved investors may receive incentives, and those incentives are to be immune from subsequent revocation by legislature or judiciary. These incentives include exemptions from taxes and no questions asked repatriation of foreign exchange. The

The Pakistan Investment Policy 2023 further provides that foreign and domestic investors shall be treated on a "no less favourable" basis, that expropriations must be for public purpose, non-discriminatory, with adequate compensation, and that investments may freely transfer returns in a freely usable currency.

The dreaded privatization or government takeover of projects has also been completely ruled out via the 2022 Act.

The introduction of an extremely friendly Mines and Minerals Act 2025 for the resource rich province of Balochistan which replaces the earlier stricter Balochistan Minerals Rules 2002 makes it easier to apply for licenses and leases.

Reforms within the judiciary although not mining or investment specific have ensured that the superior courts will not be able to act arbitrarily as they had done in the Reko Diq case.

2. Institutional Reform and Facilitation

The creation of the Special Investment Facilitation Council (SIFC) brings together civilian and military leadership, provincial chief ministers and the army chief to fast-track and oversee major investment projects.

The government has also signalled that the minerals sector (including in Balochistan) is now a high-priority investment sector — following the Barrick settlement the government "accelerated mining in Chagai after Barrick Gold settlement".

3. Security Assurance and Risk Mitigation

In April 2025 the army chief publicly promised that the army "will ensure a robust security framework ... proactive measures to protect the interests and trust of partners and investors."

The involvement of the military via SIFC and national security institutions makes clear that investment, especially in sensitive sectors like mining, is being treated as a national-security priority — thereby reducing one category of risk (conflict/insurgency) for investors.

Why These Changes Matter

The settlement with Barrick effectively cleared a major roadblock in the world's view of Pakistan's investment climate: namely, risk of contract repudiation, regulatory reversal, or unresolved arbitration.

By codifying protections and having senior officials (including military) lend credibility to the investor‐safety framework, Pakistan is sending a signal that it wants to attract "anchor" investors and large capital projects.

For sectors like mining — which require large upfront capital, long time-horizons, complex logistics and significant risk exposure — the combination of legal guarantees + security assurances is important for investor calculus.

The Role of the Army and Security Architecture

The army's role in Pakistan's investment push is unusual compared to many other countries, and for good reason: many major investment projects (mining, infrastructure, energy) lie in regions with security risks (insurgency, terrorism, remote terrain). Hence:

The army chief's statement underscores that security is no longer a peripheral matter but central to the government's investment strategy.

The SIFC formally incorporates the army chief into the decision-making/oversight body for investments. This means that from project approval through implementation, there is likely to be a dedicated security/investment interface.

For foreign investors, knowing that the country's security forces are explicitly tasked with protecting their investments diminishes (though does not eliminate) fears of disruption, expropriation under cover of insecurity, or withdrawal of state protection.

Considerations and Remaining Risks

While the reforms are promising, investors should remain cognizant of the following:

Security assurances are helpful but the underlying environment (especially in Balochistan) remains challenging — insurgency, militant attacks, geostrategic volatility are non-trivial, and any large investment will still require mitigations.

Macro-economic factors matter: currency volatility, debt burden, governance capacity, provincial vs federal coordination — all remain relevant risks.

Local/community engagement and social licence to operate remain crucial. Even with strong state protections, local resistance or disruption can derail projects if underlying grievances are ignored.

Conclusion

The Barrick Gold settlement marks a significant inflection point in Pakistan's investment story. With new legislation, institutional reform, and tangible security assurances (including from the military), Pakistan is making a concerted bid to become reasonably investor-friendly — especially in capital-intensive sectors like mining. For investors, this means that Pakistan may now offer a more stable risk-reward calculus than in the recent past.

However, the reforms should be viewed as enabling conditions — not guarantees. Careful site-specific due diligence, robust risk-mitigation planning (particularly around security and community engagement), and structuring for macro-economic contingencies will continue to be important.

For those considering entering Pakistan's mining or resource sectors, the message is: the door is more open than before. But success will depend on how well you navigate the complex terrain (both literal and institutional) that remains.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.