ISLAMABAD: The government has approved definitive agreements and financial commitments worth \$7.723 billion for Phase-I of the Reko Diq Copper-Gold Project, paving the way for formal signing within two weeks.
The Economic Coordination Committee (ECC), chaired by Finance Minister Muhammad Aurangzeb, endorsed agreements between state-owned entities, the Balochistan government, and lenders to operationalise Pakistan’s largest mining venture. The revised cost reflects a 14% increase from the March estimate of \$6.765bn, mainly due to higher debt servicing and cost contingencies.
The project’s financing debt has been raised to \$3.5bn, with shareholders’ commitments projected at \$3.446bn if development stays within \$6.946bn. Of the total cost, 35% will be rupee-based, easing foreign exchange pressures. OGDCL and PPL will meet the initial forex requirement from reserves, while the government will arrange any shortfall through the State Bank.
Phase-I is expected to deliver first concentrate by end-2028, with Phase-II elevating Reko Diq into the world’s top five mines by throughput. The project, with a 37-year life, is forecast to generate \$90bn in operating cash flows, including \$70bn in free cash flows. Pakistan’s share is expected at \$53bn, comprising fiscal revenues, equity inflows, and Balochistan’s free carry interest.
The mine will create 7,500 jobs during peak construction and 3,500 during operations, alongside investments in schools, training, and water supply for local communities.
Separately, the ECC cleared a \$390m bridge financing deal for a 1,350km rail link connecting Reko Diq to Port Qasim via ML-I and ML-III. The project, vital for ore transport, will be financed over three years at SOFR+250bps, repayable in a bullet payment at maturity.
The railway upgrade, especially on the Nokundi–Rohri section, is deemed critical for freight volumes. The Ministry of Railways has been tasked with reporting progress to the ECC by March 2026.
Story by Khaleeq Kiani
