Pakistan’s Reko Diq copper-gold project is expected to deliver a transformative impact on the country’s gold sector, potentially injecting up to $74 billion into the economy over its 37-year life cycle. According to the Competition Commission of Pakistan (CCP), the project could address long-standing structural challenges in the gold market while supporting economic growth through domestic production and downstream industry development. In its first comprehensive assessment of the gold ecosystem, the commission highlighted the overwhelmingly informal nature of the sector, where over 90 percent of trade occurs outside documented channels and prices are largely influenced by association-driven mechanisms.
The CCP report noted that domestic gold consumption ranges from 60 to 90 tonnes annually, with almost the entire demand met through imports, totaling just $17 million in FY24. This dependence has historically made the market vulnerable to smuggling, tax leakages, and pricing volatility. By providing a steady domestic supply of gold, Reko Diq is positioned as a structural breakthrough, improving traceability, supporting refining, hallmarking, and jewelry manufacturing, and formalizing the sector over the long term. The study emphasized that local production could significantly enhance transparency, reduce illicit inflows, and strengthen consumer protection.
The analysis also pointed to deep-rooted barriers suppressing competition and market efficiency. Weak documentation, cash-based transactions, and informal networks allow certain actors to dominate pricing, while fragmented regulation across the Ministry of Commerce, FBR, SBP, PGJDC, and TDAP contributes to inconsistent enforcement and policy gaps. High taxes, compliance costs, and limited refining and assaying capacity have further constrained the sector, leaving consumer protection and quality assurance at risk. Additionally, the absence of reliable data on imports, trader registration, sales, and purity has prevented evidence-based policy decisions and effective market monitoring.
To overcome these challenges, the CCP proposed a comprehensive reform framework. Key recommendations include the establishment of a Pakistan Gold & Gemstone Authority to harmonize rules, licensing, imports, and compliance with Anti Money Laundering (AML) and Counter Financing of Terrorism (CFT) standards. Mandatory assaying and hallmarking nationwide will ensure gold purity and facilitate exports. The report also advocates for a digital transformation of the value chain, including blockchain-based traceability integrated with FBR’s Track & Trace system, and the creation of a Gold Banking System inspired by Türkiye to mobilize household gold into formal channels. Centralized reporting, market documentation, and scientific price monitoring are further recommended to strengthen data governance.
CCP emphasized that modernizing the gold market through regulatory and technological reforms will not only safeguard consumers and reduce illicit trade but also unlock substantial economic value. With Reko Diq preparing for commercial rollout, these measures are seen as essential to ensuring the project’s benefits extend across the formal gold sector, boosting market transparency and supporting sustainable growth in Pakistan’s minerals and precious metals industry.
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