Pakistan Secures $5 Billion for Reko Diq Mining Project: What's Next?

Major Financial Backing for Reko Diq Project

Islamabad has reportedly secured a substantial offer of USD 5 billion from various multinational donors and agencies to fund the ambitious Reko Diq copper and gold mining initiative in Balochistan. This funding exceeds the project's estimated requirement of USD 3 billion, as reported by sources to a local media outlet.

Key contributors to this financial package include the Asian Development Bank (ADB), Islamic Development Bank (IDB), International Finance Corporation (IFC), and the US Exim Bank, along with development agencies from Germany and Denmark.

Sources indicate that the project is nearing financial closure, with Petroleum Minister Ali Pervaiz Malik leading efforts, supported by the Special Investment Facilitation Council (SIFC), to accelerate progress and unlock the mining sector's full potential.

Notably, the US Exim Bank has expressed willingness to provide unlimited financing, addressing the urgent capital needs of Pakistan and its partners.

Recently, the Ministry of Petroleum hosted a webinar in collaboration with the US embassy to attract American investors to engage in mining ventures within Pakistan.

The state-owned Oil and Gas Development Company (OGDC) plays a crucial role in the Reko Diq project, with initiatives underway to commence operations.

Pakistan boasts rich mineral resources that could significantly enhance economic growth and industrial development. The country is endowed with extensive mineral reserves, including coal, copper, gold, iron ore, chromite, and precious stones, which lay a robust foundation for a thriving mining sector.

The mineral-rich terrain spans approximately 600,000 square kilometers, with 92 identified minerals, 52 of which are commercially exploited, yielding an estimated annual production of 68.52 million metric tonnes.

This sector supports over 5,000 active mines and 50,000 small and medium enterprises (SMEs), providing direct employment to around 300,000 individuals.

Among Pakistan's notable mineral assets are the world's second-largest salt mines, the fifth-largest copper and gold deposits, and significant coal reserves. Additionally, the country possesses vast quantities of bauxite, gypsum, and precious stones like ruby, topaz, and emerald, which present considerable export opportunities.

Despite its potential, the mineral sector currently contributes only about 3.2% to the GDP, with exports making up a mere 0.1% of global totals. However, with increased exploration, foreign investments, and infrastructure enhancements, the mining industry is on the brink of substantial growth.

The local mining landscape is increasingly drawing foreign investments, with international companies keen on tapping into the unexplored mineral reserves.

The Reko Diq project, situated in Balochistan's Chagai district, is recognized for housing the world's largest untapped copper reserves and represents a significant milestone for Pakistan's mining aspirations.

Revived by Canada's Barrick Gold, the project is anticipated to commence copper and gold production by 2028, backed by an initial investment of USD 5.5 billion.

Mark Bristow, CEO of Barrick Gold, which holds a 50% stake in the venture, has projected that the reserves could yield USD 74 billion in free cash flow over the next 37 years.