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Reko Diq Project: Pakistan to Sell 15% Stake to Saudi Arabia

Reko Diq Project

ISLAMABAD: Pakistan and Saudi Arabia have reached a tentative agreement, wherein Pakistan is poised to sell 15% of its shares in the Reko Diq project to Saudi investors. This decision follows Barrick Gold Corporation’s refusal to divest its stakes in the multibillion-dollar project.

With this arrangement, Pakistan’s overall stake in the Reko-Diq project is anticipated to decrease from 50% to 35%.

Among this, the Balochistan government’s share will remain at 25%, while the federal government’s State-Owned Enterprises (SOEs) stakes will reduce from 25% to 10%, rendering Pakistan a minority shareholder in the project.

Despite concerns, officials assert that Pakistan’s experience in managing joint ventures with international entities, citing examples such as PTCL and the banking sector, ensures that the transition to a minority shareholder status will not pose significant challenges.

Moreover, existing clauses in the Reko Diq agreement reportedly restrict Barrick Gold from making major decisions unilaterally, offering Pakistan a safeguard against unfavorable developments.

This development is expected to bolster Pakistan’s investment climate, especially amid a declining investment-to-GDP ratio. A breakthrough in the Reko Diq project, with Saudi Arabia’s involvement, is anticipated to play a pivotal role in revitalizing investment prospects.

Notably, negotiations with Saudi Arabia have progressed, with plans for the kingdom to expand its stakes in additional blocks of the Reko Diq project in the future.

The involvement of the Special Investment Facilitation Council (SIFC) facilitated the valuation process, paving the way for stake sale in the project.

The signing of the Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC) is deemed crucial, particularly for the inclusion of Bilateral Investment Treaty (BIT) provisions enabling international arbitration.

High-level interactions between Pakistan and Saudi Arabia, coupled with the establishment of the Manara Minerals Investment Company, underscore the growing collaboration between the two nations in the mining sector.

The negotiation also includes provisions for resolving investment disputes through domestic forums, followed by recourse to international arbitration forums like PCA or ICSID if necessary.

The finalization of the investment chapter annexed to the FTA with GCC countries is underway, signaling promising prospects for bilateral investment cooperation.

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I am a dynamic professional, specializing in Peace and Conflict Studies, Conflict Management and Resolution, and International Relations. My expertise is particularly focused on South Asian Conflicts and the intricacies of the Indian Ocean and Asia Pacific Politics. With my skills as a Content Writer, I serve as a bridge between academia and the public, translating complex global issues into accessible narratives. My passion for fostering understanding and cooperation on the national and international stage drives me to make meaningful contributions to peace and global discourse.

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