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ISLAMABAD – Big news for Pakistan’s mining industry! A $3.5 billion financing deal has been signed for the Reko Diq copper and gold mining project.
Several international lenders, including the US EXIM Bank, the Asian Development Bank (ADB), and the European Bank, are involved. In total, 11 lenders are pitching in to fund the project.
The agreement includes a 4- to 5-year grace period and a 12-year repayment plan. The interest rates will be low, likely staying in the single digits.
The money will be disbursed soon, within 45 to 90 days, if all the conditions are met. If everything goes smoothly, Pakistan could receive the first chunk of the loan in just two months.
However, the total cost of the Reko Diq project has gone up. It’s now estimated at $7.7 billion, up from $4.8 billion.
This increase is due to inflation, higher costs for running the project, and a six-month extension for construction. The financing needed has also grown, rising by about $460 million from the original estimate.
Barrick Gold, the Government of Balochistan, and state-owned companies like OGDCL and PPL are sharing the financial load. Barrick Gold owns 55% of the project, while OGDCL and PPL have 27.7%. The Government of Balochistan holds the remaining 16.6%.
Once up and running, the Reko Diq project is expected to last for 37 years, generating around $90 billion in operating cash flow and $70 billion in free cash flow. Pakistan is set to earn roughly $53 billion from the project.
The first production from Reko Diq is expected by the end of 2028. During the construction phase from 2025 to 2028, the project will create around 7,500 jobs. After that, about 3,500 permanent jobs will be available.
Apart from economic gains, the project is already making a visible difference in local communities like Humai, Mushki Chah, and Nok Chah.
Safe drinking water was assured, and as many as seven primary schools are busy in offering better education to children in the area.
Once the first block of the Reko Diq project is fully financed, it will attract more foreign investment. This marks an important milestone for both the mining industry and Pakistan’s economy.
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