By SIB
By December 30, 2024
ISLAMABAD: In a major development, at last, the Federal Cabinet has accorded approval to the much-awaited sale of 15 percent shares in the Reko Diq project valuing $540 million to the Kingdom of Saudi Arabia. KSA would acquire the stakes under the Inter-Governmental Commercial Transactions Act, a senior government official told the Excluivewaves.com.pk.
“Saudi Arabia (KSA) will pay the amount in two installments. In the first phase, KSA will acquire a 10pc stake in the project, for which $330 million will be transferred to Pakistan. The remaining 5% stake will be purchased in the second phase for $210 million.”
“The approval by the federal cabinet is being seen as a major step toward fostering bilateral ties and advancing Pakistan’s mining sector. With the federal cabinet’s approval, all necessary formalities for the transaction will be expedited, and the first tranche of $330 million is anticipated shortly after the transfer of the initial 10% stake. The deal marks a new era of collaboration between Pakistan and Saudi Arabia, with both countries poised to reap significant benefits from this partnership.”
More importantly, the Saudi Fund for Development has pledged $150 million to support the development of mineral resources in Balochistan. Furthermore, Saudi Arabia has shown keen interest in investing in mineral exploration activities in Chagai, where Reko Diq is located.
The Reko Diq project, is among the world’s largest undeveloped copper-gold mines. The Reko Diq Mine is a planned mining operation, located near Reko Diq town in Chagai District, Baluchistan, Pakistan. Reko Diq represents one of the largest copper and gold reserves in the world having estimated reserves of 5.9 billion tonnes of ore grading 0.41% copper and gold reserves amounting to 41.5 million oz, and a mining life of at least 40 years.
The federal and Balochistan governments collectively own 50% of the project’s shares, ensuring substantial benefits for the region.
Reko Diq’s development is expected to unlock significant economic potential for Pakistan. The project’s successful implementation will not only boost the mining sector but also create job opportunities, enhance infrastructure, and provide long-term revenue streams for both federal and provincial governments.
This partnership with Saudi Arabia reflects growing international confidence in Pakistan’s mining sector. Saudi Arabia’s participation in the Reko Diq project aligns with its broader strategy to diversify investments and collaborate with strategic partners.
The two-phased payment structure ensures that Pakistan will receive substantial financial inflows over time, which will strengthen the national economy and bolster reserves. Additionally, the commitment from the Saudi Fund for Development to invest in Balochistan’s mineral resources signals a positive trajectory for future exploration and development projects. Ends
