ISLAMABAD: Pakistan’s largest mining project has reached a crucial milestone as financing for the Reko Diq copper-gold venture advances. Officials confirm that lenders have secured half of the $3.5 billion debt requirement after the US Export–Import Bank approved a $1.25 billion facility. This development significantly boosts confidence in the $7.7 billion project.
Full Financial Close Expected Soon
Authorities now expect to achieve full financial close in the first two weeks of December. This target aligns with the upcoming Reko Diq Mining Company board meeting on December 9. Officials consider final project approval highly likely at the session.
Revised Capital Expenditure Strengthens Planning
The project’s capital expenditure initially stood at $6.9 billion. However, lenders pushed for a revised estimate of $7.7 billion to cover contingencies and mitigate risk. Officials state that $3.5 billion has already been arranged from the broader $5.5 billion commitment offered by multilateral lenders and export credit agencies.
International Agencies Expand Commitments
Officials say they approached the most interested international lenders first. They focused on institutions offering the most competitive borrowing terms. The financial close faced delays due to the US government shutdown, which halted decisions at the EXIM Bank. However, the approval resumed after the shutdown ended.
Canada’s Export Development Canada will join as a co-financier. The combined US EXIM and EDC financing now totals $1.4 billion. Both agencies will also supply essential equipment and services for mine construction.
Multilateral Lenders Deepen Involvement
The International Finance Corporation has committed $700 million, while the Asian Development Bank will provide $300 million. The Japan Bank for International Cooperation plans to extend nearly $300 million in import financing. Moreover, three European agencies — Euler Hermes, KfW, and EKN — will jointly deliver $900 million in long-term financing tied to off-take agreements for copper, gold, and other minerals. These combined contributions represent 30 percent of the financing package.
Negotiations Continue on Lending Terms
Officials confirm that interest-rate negotiations remain ongoing. They note that each lender operates under unique parameters. Financial teams are holding intense discussions to finalise the terms. All agreements identify the London Court of International Arbitration as the binding forum under English law.
Construction Momentum Builds at Site
Construction activities have expanded steadily since 2023. Heavy machinery remains active at the site. Local and foreign contractors continue to accelerate mine-development operations.
Ownership Structure Ensures Local Gains
The project uses a 50:50 debt-to-equity ratio to stabilise financing and distribute risk. RDMC owns and operates the venture. Barrick Gold holds 50 percent and serves as the lead operator. Pakistan’s federal government holds 25 percent through OGDCL, PPL, and GHPL. The Balochistan government holds 25 percent, including a 10 percent free-carried share and a 15 percent funded stake. This structure ensures that Balochistan gains revenue without paying upfront costs.
Railway Upgrades Strengthen Logistics
RDMC has also pledged $390 million in bridge financing to upgrade Pakistan Railways’ Main Line-2 and Main Line-3. This investment aims to improve transport links between the mine and Port Qasim.
