The federal cabinet has greenlit the sale of a 15% stake in Pakistan’s Reko Diq mining project to Saudi Arabia, sealing a $540 million deal under an intergovernmental agreement. The transaction will be completed in two phases: Saudi Arabia will pay $330 million for a 10% share initially, followed by an additional $210 million for a 5% stake in the second phase, as reported by Express News.
In addition, the Saudi Fund for Development is injecting $150 million into Balochistan’s mining sector. Saudi Arabia also expressed keen interest in further exploring the mineral-rich Chagai region, potentially leading to more investments.
Currently, Pakistan’s federal and Balochistan governments jointly hold 50% of the Reko Diq project, while the remaining shares are owned by international firms. The project, one of the world’s largest untapped copper and gold reserves, holds immense economic promise for Pakistan.
The Reko Diq saga dates back to 2011 when Pakistan denied Tethyan Copper Company (TCC), a joint venture of Barrick Gold and Antofagasta Minerals, a mining lease due to alleged contract discrepancies. This led TCC to pursue international arbitration, and in 2019, the World Bank’s ICSID awarded the company $6 billion in damages. To avoid this hefty fine, Pakistan struck a new deal with Barrick Gold in 2022, reviving the project with a new ownership structure, where the federal and provincial governments hold half the shares and Barrick retains the rest.
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