Saira Imran The government has approved a financial package worth $7.72 billion for the Reko Diq project for copper and gold. Officials believe this decision marks a turning point, as it paves the way for signing the final agreement within the next two weeks. Experts describe the project as one of the most important steps toward unlocking Pakistan’s mineral wealth.
Revised Costs and Key Approvals
The approval came during a meeting of the Economic Coordination Committee (ECC), chaired by Finance Minister Muhammad Aurangzeb. The committee approved revised agreements between state-owned enterprises (SOEs), the Balochistan government, and international lenders. Observers see these agreements as crucial to moving forward with Pakistan’s largest mineral project.
The estimated cost of the first phase of the Reko Diq project, initially $6.76 billion, has now risen to $7.72 billion. The increase comes mainly due to higher borrowing requirements and additional expense estimates.
The project’s debt has climbed from $3 billion to $3.5 billion, which also raises shareholder contributions by nearly $458 million. However, if the Reko Diq Mining Company (RDMC) manages to control spending, total shareholder investments may reduce to $3.44 billion, down from the earlier projection of $3.76 billion.
Financial Structure of the Deal
According to the approved plan, officials will manage about 35% of the overall project cost (excluding foreign currency payments) in Pakistani rupees. This will reduce the foreign exchange risks for local shareholders.
- Pakistan Minerals Pvt Ltd (PMPL) is responsible for $2.14 billion.
- Balochistan Mineral Resources Ltd (BMRL) will contribute $1.28 billion.
After financing support, these responsibilities will drop to $1.17 billion for PMPL and $704 million for BMRL.
To meet their commitments, SOEs can arrange funds through equity or shareholder loans over the next seven years. Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) will use their reserves for initial foreign exchange needs, while the federal government will cover any remaining gaps through the State Bank of Pakistan.
Timeline and Expected Benefits of Reko Diq Project
The project’s first phase is expected to deliver its first concentrate by late 2028. The second phase will expand production, making Reko Diq one of the world’s five largest copper and gold mines.
The mine has an expected life of 37 years, during which it will generate $90 billion in operating cash flow and $70 billion in free cash flow.
Out of this, Pakistan will receive $53 billion over the project’s lifespan. The breakdown includes:
- $11 billion for the federal government
- $11 billion for the Balochistan government
- $6 billion through free carried interest for the province
- $9 billion for BMRL
- $15 billion for PMPL
Social and Economic Impact
Besides financial returns, the project will bring long-term social benefits. These include:
- Clean water access for nearby villages such as Hami, Mushki Chah, Nok Chah, and Durbin Chah
- Seven new primary schools
- Training programs for local youth
At its peak construction stage between 2025 and 2028, the project will employ 7,500 workers. Once operations begin, it will provide 3,500 permanent jobs.
Already, 27 Baloch graduates have received overseas training through Barrick Gold, the project’s partner. In addition, 300 students from Chagai district are enrolled in technical training programs run by Hunar Foundation.
Reko Diq Project: Railway Link for Exports
To export the mine’s production, the ECC has also approved $390 million in bridge financing for building a 1,350 km railway line. This rail link will connect the mine in Balochistan to Port Qasim in Karachi.
Officials have declared the railway project a ‘qualified investment’ under Pakistan’s 2022 Foreign Investment Act, and they consider it vital for making Reko Diq project commercially successful.
Immediate upgrades are also planned for the Nokundi–Rohri section of ML-III railway line to handle future freight volumes. The Ministry of Railways has been asked to work closely with the Ministry of Finance and report progress to the ECC by March 2026.
Read Also: Foreign Investment in Pakistan Drops by 22%
Mining Experts See Bright Future
Experts believe Reko Diq project holds over $7 billion worth of copper and gold reserves, while the wider Chagai region may contain deposits worth $1.3 trillion.
They predict that Pakistan’s mining revenues, which currently stand at $2 billion annually, could grow to $6–8 billion by 2030 if projects like Reko Diq are managed successfully.
They stressed that political stability and strong governance are vital for attracting further investment. With global demand for metals rising, they see this project as a potential game-changer for Pakistan’s economy.
