Saudi Arabia acquires 15% stake in Pakistan’s Reko Diq mining project for $540 million

Reko Diq, a vast untapped copper and gold resource, offers a transformative economic boost for Pakistan's future.

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The federal cabinet has approved the sale of a 15% stake in the Reko Diq mining project to Saudi Arabia, under an intergovernmental transaction agreement.

The deal, valued at $540 million, will see the transfer of shares in two instalments. Saudi Arabia will pay $330 million for 10% shares in the first phase and an additional $210 million for 5% shares in the second phase, Express News reported.

In a related move, the Saudi Fund for Development has pledged an extra $150 million to bolster the mining sector in Balochistan. Saudi Arabia has also expressed interest in exploring mineral resources and investing further in Chagai, a mineral-rich region.

Currently, 50% of the Reko Diq project is jointly owned by Pakistan's federal and Balochistan governments, with the remaining shares held by international firms.

The Reko Diq project is regarded as one of the world’s largest undeveloped copper and gold deposits, presenting significant economic opportunities for Pakistan.

The Reko Diq case revolves around a massive copper and gold mining project located in Chagai, Balochistan, Pakistan. In 2011, the Pakistani government declined to grant a mining lease to Tethyan Copper Company (TCC), a joint venture between Barrick Gold and Antofagasta Minerals, citing irregularities in the contract.

TCC had discovered substantial deposits of copper and gold in Reko Diq and planned to invest billions in its development. The company filed for international arbitration, claiming Pakistan violated a bilateral investment treaty.

In 2019, the World Bank's International Centre for Settlement of Investment Disputes (ICSID) ruled in favour of TCC, awarding it $6 billion in damages.

To avoid paying the hefty penalty, Pakistan renegotiated with Barrick Gold and reached a settlement in 2022. The agreement reinstated the project with a new ownership structure, giving 50% of the shares to the federal and provincial governments while Barrick Gold retained the other half.