Pakistan has established a high-level negotiation committee to finalise the terms, valuation, and draft a commercial agreement for the sale of a 15% stake in the Reko Diq copper and gold mining project to Saudi Arabia’s Public Investment Fund (PIF).
According to a news report, the committee will assess the price discovery mechanism prepared by international advisors and negotiate the Saudi offer, which includes a cash payment, reimbursement of cash calls paid by Pakistan Minerals Private Limited (PMPL), and a $150 million grant for road infrastructure in the mining region.
The newly formed committee includes officials from the Petroleum, Finance, and Law divisions, the Special Investment Facilitation Council (SIFC), and PMPL. The group has been tasked with negotiating the terms of the sale, drafting the commercial agreement, and submitting its findings to the Cabinet Committee on Inter-Governmental Commercial Transactions.
The move follows concerns raised by Pakistani authorities about the initial Saudi offer being undervalued. The federal government now anticipates a revised price after the completion of a feasibility study on the project’s mineral reserves, expected in early 2025.
Saudi Arabia has proposed acquiring the stake in two tranches: a 10% payment upon signing the deal and an additional 5% at the final investment decision. The project’s ownership is currently split between Barrick Gold (50%) and the federal and Balochistan governments, which jointly hold the remaining 50%.
Barrick Gold and PMPL are concurrently working to secure $3 billion in debt financing for the $5.8 billion project. Multiple global financial institutions, including the World Bank’s International Finance Corporation, Asian Development Bank, and Islamic Development Bank, have expressed interest in financing, with additional offers anticipated from countries like Canada, Japan, and South Korea.
