By SKM
September 10, 2025
ISLAMABAD: In a landmark development for Pakistan’s mining and investment landscape, the long-delayed Reko Diq copper and gold project is now set to achieve financial closure by the end of September or early October, top government officials confirmed. Located in Balochistan’s Chagai district, the project is projected to generate $74 billion in free cash flows over its 37-year lifespan, and is seen as a cornerstone of Pakistan’s long-term economic strategy.
The Annual General Meetings and Boards of Directors of the three state-owned stakeholders—Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL)—have formally approved a $715 million increase in the project’s capital cost, taking it from $6.765 billion to $7.480 billion. The cost escalation stems from conservative lender estimates, factoring in inflation, foreign exchange risks, and project contingencies. However, officials say the original budget of $6.765 billion remains achievable, citing robust cost-control plans.
Construction work is scheduled to commence in December 2025, with commercial production expected by 2028. The project will follow a 50:50 debt-to-equity financing structure, allowing both local and international investors to participate while minimizing sovereign risk. The project will be implemented by the Reko Diq Mining Company (RDMC), a specially formed joint venture between Barrick Gold Corporation, the Government of Pakistan, and the Government of Balochistan.
Barrick Gold, the project’s operator and foreign strategic investor, holds a 50% stake in RDMC. The remaining 50% is shared equally between the federal and provincial governments. The Government of Pakistan, through its SOEs—OGDCL, PPL, and GHPL—owns 25%, while Balochistan holds 25%, including a 10% free-carried interest and a 15% fully funded share, which will be financed on its behalf by the federal government. This structure enables Balochistan to benefit from long-term revenues without upfront financial contributions.
The project has already secured strong international financial backing. The International Finance Corporation (IFC)—a World Bank Group institution—has committed $700 million, including a $400 million subordinated loan. Notably, the loan is being provided without any sovereign guarantee and will be secured solely against the balance sheets of OGDCL, PPL, and GHPL—a significant milestone in Pakistan’s financial structuring capabilities.
In addition, the Asian Development Bank (ADB) has approved a $300 million loan for the project—its first foray into Pakistan’s mining sector in over four decades. ADB has also provided a $110 million credit guarantee to support Balochistan’s stake and mitigate investment risks. Other key international lenders—including the U.S. EXIM Bank, Export Development Canada, and the Japan Bank for International Cooperation (JBIC)—are also in advanced discussions and expected to participate in the financing consortium.
In a complementary move, RDMC will provide $350–400 million in bridge financing to fund critical upgrades to Pakistan Railways’ ML-2 and ML-3 lines, linking the Reko Diq site to Port Qasim. The rail infrastructure project, to be completed ahead of mine operations in 2028, will ensure seamless logistics for the export of copper and gold concentrates.
Beyond its financial and technical components, the Reko Diq project is widely seen as a strategic asset for Pakistan, with the potential to transform Balochistan’s economic landscape. As one of the world’s largest undeveloped copper and gold deposits, its successful execution is expected to unlock billions in foreign exchange earnings, create thousands of jobs across skilled, semi-skilled, and unskilled sectors and drive regional development in Balochistan.
The project’s progress toward financial closure is also being seen as a vote of confidence in Pakistan’s economic management and policy environment—especially at a time when investor sentiment has been fragile due to macroeconomic pressures.
“This isn’t just a mining project—it’s a transformational economic engine for Pakistan,” said a senior official involved in the negotiations. “Reko Diq will redefine the country’s approach to resource development—both in terms of financial discipline and strategic foresight.”
Once financial closure is formally achieved, the focus will shift to contractor mobilization, equipment procurement, and on-ground construction, setting the stage for what could be Pakistan’s most successful public-private partnership to date. Ends
