The federal cabinet has approved the sale of a 15% stake in Pakistan’s Reko Diq mining project to Saudi Arabia, under an intergovernmental agreement.
The deal, valued at $540 million, will be executed in two phases. Saudi Arabia will pay $330 million for a 10% stake in the first phase, followed by an additional $210 million for 5% in the second phase, as reported by Express News.
In addition, the Saudi Fund for Development has committed $150 million to support the mining sector in Balochistan. Saudi Arabia has also expressed interest in exploring further mineral resources and investing in Chagai, a region rich in minerals.
Currently, Pakistan’s federal and Balochistan governments jointly own 50% of the Reko Diq project, with the remaining shares held by international firms.
Reko Diq is considered one of the world’s largest untapped copper and gold deposits, offering significant economic potential for Pakistan.
The project has a complicated history, starting in 2011 when the Pakistani government refused to grant a mining lease to Tethyan Copper Company (TCC), a joint venture of Barrick Gold and Antofagasta Minerals, citing irregularities in the contract. TCC had discovered substantial copper and gold deposits in Reko Diq and planned to invest billions in development. TCC then filed for international arbitration, arguing that Pakistan violated a bilateral investment treaty.
In 2019, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled in favor of TCC, awarding $6 billion in damages. To avoid this penalty, Pakistan renegotiated with Barrick Gold, leading to a settlement in 2022 that reinstated the project with a new ownership structure. The agreement granted 50% ownership to the federal and provincial governments, while Barrick Gold retained the other half.
