Major Milestone for $7.7 Billion Mining Venture
International lenders have secured a $3.5 billion debt package for Pakistan’s massive Reko Diq copper-gold mining project, marking a crucial step forward for the country’s largest mining initiative. The financial breakthrough came after the US Export-Import Bank approved a $1.25 billion facility, completing half of the required debt financing.
Financial Close Expected by Mid-December
Officials now anticipate achieving full financial close for the $7.7 billion venture within the first two weeks of December. The Reko Diq Mining Company board is scheduled to meet on December 9, where final approval is considered highly likely. The project’s capital expenditure was revised upward from an initial $6.9 billion to $7.7 billion to incorporate contingency buffers demanded by lenders.
International Financing Consortium
The debt package represents a coordinated effort among multiple international financial institutions:
- US EXIM Bank: $1.25 billion facility
- International Finance Corporation: $700 million commitment
- Asian Development Bank: $300 million contribution
- Japan Bank for International Cooperation: Approximately $300 million in import financing
- European export credit agencies (Germany’s Euler Hermes and KfW, Sweden’s EKN): $900 million combined
- Canada’s Export Development Canada: Co-financing alongside US EXIM
Project Structure and Ownership
The financing follows a 50:50 debt-to-equity ratio designed to ensure financial stability while distributing risk. Reko Diq Mining Company, the project’s special-purpose vehicle, is owned by Barrick Gold Corporation (50% and lead operator), the Government of Pakistan (25% through state-owned energy companies), and the Government of Balochistan (25%, including a 10% free-carried interest).
Infrastructure Development and Timeline
In a parallel development, RDMC has committed $390 million in bridge financing to upgrade Pakistan Railways’ Main Line-2 and Main Line-3, strengthening logistical connections between the mine and Port Qasim. Construction activities have been accelerating since 2023, with heavy machinery already mobilized at the project site. The rail upgrades are expected to be completed before production begins in 2028, facilitating smooth export of processed copper and gold.
Legal Framework and Dispute Resolution
The financing agreements designate the London Court of International Arbitration under English law as the binding forum for any disputes. Officials noted that detailed interest-rate negotiations are currently underway, with financial managers engaged in “intense discussions” to finalize terms across different lender categories.
