Pakistan approves $6.77 billion funding for Reko Diq copper-gold project phase 1

Pakistan’s Economic Coordination Committee (ECC) has approved $6.77 billion in funding for the first phase of the Reko Diq copper and gold mining project in Balochistan, marking a major milestone for one of the country’s largest mining ventures.

The decision is expected to pave the way for the project’s development, which has faced years of delays due to legal and financial complications.

The financing plan for Phase 1 includes $5.57 billion in capital expenditure for mine development and infrastructure, while an additional $1.2 billion is allocated for interest payments on project financing and inflation-related costs during construction.

The second phase of the project will be self-funded through revenues generated by mining operations.

The Reko Diq project is a joint venture involving the federal and Balochistan governments, state-owned enterprises, and Canada-based Barrick Gold Corporation. Pakistani entities—Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), and Government Holdings (Private) Limited (GHPL)—together hold a 25% stake in the project. The Balochistan government also holds a 25% share, while Barrick Gold owns the remaining 50%.

The ECC approved a revised financial structure for the project, formalizing funding commitments for Pakistani stakeholders.

Pakistan Minerals (Private) Limited (PMPL) will contribute $1.88 billion, while Balochistan Mineral Resources Limited (BMRL) will invest $1.13 billion. The federal government plans to secure financing from commercial banks, supported by guarantees from international export credit agencies, to ease the financial burden on national resources.

Reko Diq is one of the world’s largest undeveloped copper and gold deposits. The project’s successful development is anticipated to have a substantial economic impact on Pakistan by generating billions of dollars in revenue, creating jobs, and attracting foreign direct investment into the mining sector.

Officials describe the project as a cornerstone of Pakistan’s long-term economic strategy, particularly in addressing foreign exchange challenges.

Over the years, the project has encountered multiple obstacles, including a protracted legal dispute with Barrick Gold and Antofagasta PLC.

In December 2022, Pakistan reached a settlement that enabled Barrick Gold to resume work on Reko Diq. Antofagasta exited the project in exchange for a $900 million settlement paid by Pakistani entities. The agreement restored investor confidence and established a framework for future investment.

Following the ECC’s approval, the petroleum and finance ministries have been directed to expedite agreements and financing arrangements to ensure the project’s timely implementation. The final development plan for Reko Diq is expected to gain approval in April 2025, after which construction will begin.

Once operational, the project is projected to produce approximately 200,000 tons of copper and 250,000 ounces of gold annually. Mining revenue will be shared among stakeholders, with a significant portion benefiting the Balochistan government and local communities.