ISLAMABAD: Pakistan has established a negotiation committee to finalize the sale of a 15% stake in the Reko Diq copper and gold mining project to Saudi Arabia’s Public Investment Fund (PIF). The committee will review the price discovery mechanism prepared by international advisors, assess the Saudi offer, and draft a commercial agreement.
The Cabinet Committee on International Governmental Commercial Transactions approved the panel’s formation, granting it authority to negotiate cash offers and reimbursement of cash calls made by Pakistan Minerals Private Limited (PMPL). Additionally, Saudi Arabia has pledged a $150 million grant for road construction in the mining area.
The Reko Diq project is 50% owned by Canadian Barrick Gold, with the remaining 50% equally divided between Pakistan’s federal and Balochistan governments. Saudi PIF, through Manara Minerals, proposed acquiring the stake in two tranches—10% upon signing and 5% at the final investment decision.
International advisors are conducting a valuation of the project, expected to be completed in two months, based on a new feasibility study. The study’s initial findings suggest a high internal rate of return, significantly boosting the project’s valuation.
The transaction is crucial for Pakistan, as Saudi Arabia has raised concerns over previous investments, such as in K-Electric. The deal will also test the effectiveness of the Special Investment Facilitation Council (SIFC), which aims to attract foreign investment.
Global lenders, including the US Exim Bank, IFC, ADB, and Islamic Development Bank, have shown interest in financing the $5.8 billion project, awaiting the feasibility study results due by January 2025. Meanwhile, Pakistan and Barrick Gold are working to secure foreign funding to advance the project.
Story by
Shahbaz Rana
