Pakistan approves sale of 15% stake in Reko Diq project to Saudi Arabia

Pakistan has approved the sale of a 15% stake in the Reko Diq mining project to Saudi Arabia.

The sale for one of the world's largest gold and copper mines will be conducted under an intergovernmental transaction agreement, officials informed Nukta.

The deal, valued at $540 million, will see the transfer of shares in two instalments. Saudi Arabia will pay $330 million for 10% shares in the first phase and an additional $210 million for 5% shares in the second phase.

Currently, 50% of the Reko Diq project is jointly owned by Pakistan's federal and Balochistan governments, with the remaining shares held by international firms. The 15% stake that will be sold will be from the federal government's share.

The Reko Diq project is regarded as one of the world’s largest undeveloped copper and gold deposits, presenting significant economic opportunities for Pakistan.

The government in 2011 declined to grant a mining lease to Tethyan Copper Company (TCC), a joint venture between Barrick Gold and Antofagasta Minerals, citing irregularities in the contract.

TCC had discovered substantial deposits of copper and gold in Reko Diq and planned to invest billions in its development. The company filed for international arbitration, claiming Pakistan violated a bilateral investment treaty.

In 2019, the World Bank's International Centre for Settlement of Investment Disputes (ICSID) ruled in favour of TCC, awarding it $6 billion in damages.

To avoid paying the hefty penalty, Pakistan renegotiated with Barrick Gold and reached a settlement in 2022. The agreement reinstated the project with a new ownership structure, giving 50% of the shares to the federal and provincial governments while Barrick Gold retained the other half.