- Pakistan secures $1.3 billion US commitment for Reko Diq copper and gold project
- Reko Diq is one of the world's largest undeveloped copper and gold deposits
- Project expected to start production by late 2028 amid security challenges
Pakistan has secured nearly $1.3 billion worth of commitments from the United States for a copper and gold mining project in the South Asian nation's sensitive Balochistan province, marking a major foreign investment in one of the world's largest undeveloped mineral deposits. The Reko Diq project, located near the Pakistan-Iran border, is a total $7 billion project in the remote, insurgency-hit western province and is expected to start production by the end of 2028.
The project is being developed by Canadian miner Barrick Mining Corp in partnership with Pakistani authorities. The US investment in the project will be channelled through the Export-Import Bank of the United States (EXIM) as part of Washington's broader push to secure critical mineral supply chains and strengthen economic ties with Pakistan.
According to Barrick, it owns 50 per cent of the project, while the other 25 per cent is owned by three federal state-owned enterprises, and 25 per cent by the Government of Balochistan, of which 15 per cent is on a fully funded basis and 10 per cent is on a free carried basis.
Security Concerns
Reuters
Balochistan suffers frequent attacks by separatists and jihadists, making security a major concern for the mine. The project also requires a railway line upgrade to transport copper concentrate to Karachi for processing abroad.
Investments
Lenders, including the International Finance Corporation and the Asian Development Bank, among others, are assembling a financing package exceeding $2.6 billion, according to a report by Reuters.
The Reko Diq project added 13 million ounces to Barrick's gold reserves in 2024 and is expected to produce 200,000 metric tons of copper a year in its first phase, doubling after expansion, with projected free cash flow of more than $70 billion over 37 years.
Pakistan's Mineral Pay
The Reko Diq is important for Pakistan, with Islamabad counting on the mine to anchor its mineral strategy while the Canadian miner advances one of its largest long-term projects.
The Shehbaz Sharif government welcomed the move, calling it a vote of confidence in the country's mining sector and economic reforms. Islamabad is hoping that the project will generate billions of dollars in revenue over its lifetime and significantly contribute to helping development in the cash-strapped nation.
The investment also carries geopolitical significance, coming amid increased global competition over critical minerals and growing US efforts to diversify supply chains away from China.
