Japan has expressed its intention to join the multibillion-dollar Reko Diq copper and gold mining project in Pakistan, expanding its investment footprint beyond the auto sector. The country is now looking to collaborate with local and international investors in this massive mining initiative, The Express Tribune reported.
Following Japan’s inquiry about its potential involvement, the Economic Coordination Committee (ECC) was informed of Japan’s eagerness to participate. The Finance Division assured the committee that no capital flight would occur, ensuring the stability of foreign remittances.
The proposal includes two types of guarantees: a sovereign guarantee from the government, ensuring project completion, and an additional guarantee from the Asian Development Bank (ADB) for Balochistan Mineral Resource Limited (BMRL) equity.
Previously, Saudi Arabia had shown interest in the project, with plans to acquire a 15% shareholding and contribute capital.
According to the Petroleum Division, the project’s equity is valued at $900 million, with 50% funded by sponsors and the remainder covered by agencies. State-owned enterprises (SOEs) are expected to repatriate funds through Pakistan Minerals Private Limited (PMPL) over seven years to meet their $2,145 million commitment, either as equity or shareholder loans.
The Petroleum Division also highlighted that the project is raising $3.5 billion in financing, focusing on healthcare, safety, security, and community welfare as core components. Lenders and creditors are directly handling the financing, with representatives underscoring the project’s significance.
The ECC acknowledged the Reko Diq project’s potential to transform Balochistan’s economic landscape and bring substantial benefits to Pakistan. The Petroleum Division sought approval for the final terms and definitive agreements, requesting authorization to repatriate funds through PMPL for SOEs’ $2,145 million share commitment.
The foreign exchange needed for the investment will be arranged by Oil and Gas Development Company (OGDC) and Pakistan Petroleum Ltd (PPL) from their resources. If there is a shortfall, the government will provide the necessary foreign exchange.
Additionally, the Petroleum Division sought approval for BMRL’s repatriation of funds, in line with the cabinet’s decision in December 2022. The ECC was also asked to authorise the secretaries of the Petroleum and Finance Divisions to finalise and sign the required government guarantees under the Rules of Business, 1973.
