Reko Diq Mining Company is set to achieve financial close on the back of about $6 billion in indicative commitments, almost double the requirement. The package includes at least half a billion dollars in assurances by the United States.
Of the $6 billion in commitments, two multilateral lenders, the Asian Development Bank (ADB) and the World Bank Group, have already approved a little over $1 billion. The ADB approved $300 million for the Reko Diq Mining Company, which owns 100% of the world's fifth largest copper-gold mines in Balochistan, according to an announcement released by the Manila-based lender on Friday.
The ADB said the project will help meet rising global demand for critical minerals while unlocking economic development and poverty reduction in Pakistan.
The $300 million ADB financing indicates that Reko Diq will achieve financial close within months. It also signals to international private creditors to lend, according to people familiar with the matter.
Agreements with other lenders are expected soon to reach the $3.5 billion required for phase one of the $6.7 billion project, they added.
"Reko Diq will help the critical minerals supply chain, advance the clean energy transition and drive digital innovation across the region and beyond," said ADB President Masato Kanda after the board approved a $410 million package.
The ADB's contribution includes up to $300 million in loans to Reko Diq Mining Company Private Limited (RDMC) and a $110 million partial credit guarantee to cover the equity component of the Balochistan government, stated the ADB.
The project will mark the largest foreign direct investment in Pakistan's history, it added. Barrick Gold CEO Mark Bristow recently said the company was preparing a "G7 financing package" for the project. The mine is expected to begin production in 2028.
Earlier, Pakistan approved raising the first phase cost to nearly $6.7 billion, a 58% increase — by enhancing the scope of the strategically important scheme and accounting for inflationary impact and higher production needs.
As a result, the federal government's obligation for its 25% shareholding through three state-owned firms rose to $1.9 billion. The Balochistan government's obligation also increased to $1.1 billion.
Barrick Gold is responsible for arranging the remaining 50%.
Sources said the $6 billion in indicative commitments included $1.05 billion already approved by the World Bank Group and ADB. The US Export-Import (EXIM) Bank indicated a $500 million to $1 billion loan.
The US International Development Finance Corporation, Export Development Canada, and Germany's KfW have also promised loans. Guarantees have been offered by Euler Hermes, Finnvera Group, Swedish Export Credit Agency EKN, and Korean Exim Bank for $400 million.
Japan's Exim Bank has pledged $500 million while Australian Export Finance may extend up to $250 million, sources added.
However, final amounts will depend on the company's requirements. The mining firm now has the option to secure loans at highly competitive rates, they said.
"The ADB's support is also a game-changer for Pakistan, creating quality jobs and supporting the shift to a more resilient and diversified economy," said the ADB president.
When complete, Reko Diq is expected to be the world's fifth largest copper mine. In its first phase, it will produce on average 800,000 tonnes of copper concentrate per annum and help address the projected global copper shortfall, the ADB noted.
Copper, a critical mineral for energy transition and digital transformation, is essential for renewable energy technologies, electric vehicles, batteries, smartphones, and data centres, it said.
The mine is expected to have significant impact on Pakistan's economy significantly. It will create thousands of jobs, stimulate regional growth, and support social development programmes in healthcare and education, including initiatives for women and local communities, added the Manilla-based lender.
Work at the site, including building and operating the open-pit mine and processing plant, began this year. The mine is being developed under strict environmental, social, and governance standards. Production is set to start in late 2028 and continue for at least 37 years. Reko Diq is the first mining project supported by ADB under its new Critical Minerals to Manufacturing Value Chains approach which is designed to help Asia and the Pacific capitalise on growing demand for materials essential to clean energy and digital technology.
All projects will be subject to ADB's strict environmental and social checks, due diligence, and impact assessments, the bank said.
The ADB board's approval allows the lender to move forward with final loan documentation and requirements before the financing is formally committed through signed agreements.
The recently completed feasibility study outlines two phases. In Phase I, initial throughput will be 45 million tonnes per annum (Mtpa) of ore, with production beginning in 2028. With Phase II, throughput will double to 90 Mtpa by 2034, according to the technical report.
The project's internal rate of return (IRR) is estimated at 21.32%, based on copper prices of $4.03 per pound and gold at $2,045 per ounce. The payback period is six years and two months, the report showed.
The mining project has drawn strong interest from both the US and China. Over its 37-year life, Reko Diq's net cash flow is projected at $70 billion.
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