Stake in Reko Diq project: KSA, Pakistan still ironing out key deal details

ISLAMABAD: Kingdom of Saudi Arabia (KSA) and Pakistan have yet to finalize several details of the deal on 15 percent shares in Reko-Diq (copper and gold) project in Balochistan, sources told Business Recorder.

Reko-Diq Mine is 50 percent owned by Barrack Gold, 25 percent by three federal state-owned enterprises (GHCL, OGDCL and PPL), 15 percent by Balochistan Government on a fully-funded basis and 10 percent by Balochistan on a free-carried basis.

The sources said, Minister for Petroleum and Natural Resources, Dr. Musadik Masood Malik, recently visited Riyadh (Saudi Arabia) and gave a detailed presentation on natural resources in Pakistan and offered incentives for investment in Balochistan and other parts of the country.

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“The Saudi side is hopeful that once the Reko Diq feasibility study is completed by the end of current month, a decision can be reached on the way forward,” said sources quoting Pakistan’s ambassador to Saudi Arabia as saying in his recent communication with Islamabad.

The issues relating to RekoDiq have been discussed at the Prime Minister Office wherein it was noted that Financial Close (FC) of the Project was scheduled by June 2025. Joint Secretary (Corporate Finance) Ministry of Finance (MoF) stated that a third-party guarantee arrangement is likely to be approved by the Asian Development Bank (ADB) by end-May 2025. A representative from the Finance Division stated that during the deliberations with ADB, the RMDC team was present too. Representative of the RDMC highlighted that the provision of a GoP guarantee for the Government of Balochistan (GoB) Balochistan Mineral Resources Limited-BMRL and equity funding obligations are critical for the timely Financial Close of the project.

It was further highlighted that the timelines to obtain this guarantee from ADB has been extended at least thrice since December 2022 and advised the Finance Division to follow it diligently with ADB and ensure the finalization of the guarantee at the earliest.

Saudi Arabia’s Manara Minerals Investment Co. backed by the SSF (Saudi Sovereign Fund), whose delegation is also expected next month, has shown an interest in acquiring $1billion shares in Reko Diq controlled by Barrick Gold Corporation. The sources said Petroleum Division will also devise an action plan for restructuring of GSP based on the recommendations of the audit report.

Petroleum Division has also taken the lead and is coordinating with Ministry of Inter-Provincial Coordination (IPC) for holding an inter-provincial Ministers and Chief Secretaries’ meeting to deliberate on minerals harmonisation mechanism and regulatory framework, the sources said adding that progress in this regard has also been shared with the Executive Committee of the Special Investment Facilitation Council (SIFC), a body which is mandated to take key investment related decisions.

Federal Minister for Petroleum Dr Musadik Malik while talking to the media stated that matters with Saudi Arabia are moving forward positively and will be finalized soon. A price negotiation committee is handling matters to ensure negotiations proceed in a timely fashion to seal the deal soon. However, it has not been finalized yet.

According to the Petroleum Division (DG-Mines), the Mineral Cell has been established, and work on Mineral Policy is in progress in coordination with SIFC and other relevant stakeholders. Petroleum Division has also completed the benchmarking of international and provisional mining laws/rules and regulations and updation of the regulations of mines and oil fields and the Mineral Development (Government Control) Act. 1948.

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