ISLAMABAD: The federal cabinet has approved the sale of a 15% stake in the Reko Diq project to Saudi Arabia for $540 million under the Inter-Governmental Commercial Transactions Act.
According to industry sources, the federal cabinet has now allowed the Saudi government to acquire the shares through a direct transaction and this move is seen as a major step toward fostering bilateral ties and advancing Pakistan’s mining sector.
The Kingdom of Saudi Arabia (KSA) will pay the amount in two installments. In the first phase, Saudi Arabia will acquire a 10pc stake in the project, for which $330 million will be transferred to Pakistan. The remaining 5% stake will be purchased in the second phase for $210 million.
In addition to acquiring shares, the Saudi Fund for Development has pledged $150 million to support the development of mineral resources in Balochistan. Furthermore, Saudi Arabia has shown keen interest in investing in mineral exploration activities in Chagai, where Reko Diq is located.
The Reko Diq project, situated in Pakistan’s resource-rich Balochistan province, is among the world’s largest undeveloped copper-gold mines. The federal and Balochistan governments collectively own 50% of the project’s shares, ensuring substantial benefits for the region.
Reko Diq’s development is expected to unlock significant economic potential for Pakistan. The project’s successful implementation will not only boost the mining sector but also create job opportunities, enhance infrastructure, and provide long-term revenue streams for both federal and provincial governments.
This partnership with Saudi Arabia reflects growing international confidence in Pakistan’s mining sector. Saudi Arabia’s participation in the Reko Diq project aligns with its broader strategy to diversify investments and collaborate with strategic partners.
The two-phased payment structure ensures that Pakistan will receive substantial financial inflows over time, which will strengthen the national economy and bolster reserves. Additionally, the commitment from the Saudi Fund for Development to invest in Balochistan’s mineral resources signals a positive trajectory for future exploration and development projects.
The Saudi investment is expected to pave the way for enhanced technological expertise and global best practices in the mining sector. It will also contribute to regional development, particularly in Balochistan, which has long been seen as underdeveloped despite its rich resource base.
With the federal cabinet’s approval, all necessary formalities for the transaction will be expedited, and the first tranche of $330 million is anticipated shortly after the transfer of the initial 10% stake. The deal marks a new era of collaboration between Pakistan and Saudi Arabia, with both countries poised to reap significant benefits from this partnership.
