The federal cabinet approved the sale of a 15% stake in the Reko Diq mining project to Saudi Arabia, under an intergovernmental transaction agreement.
The agreement, valued at $540 million, will involve the transfer of shares in two installments. Saudi Arabia will pay $330 million for 10% of the shares in the first phase and an additional $210 million for 5% of the shares in the second phase, Express News reported.
In a related move, the Saudi Fund for Development has pledged an additional $150 million to bolster the mining sector in Balochistan. Saudi Arabia has also expressed interest in exploring mineral resources and investing more in Chagai, a mineral-rich region.
Currently, 50% of the Reko Diq project is jointly owned by the federal governments of Pakistan and Balochistan, with the remaining shares held by international companies.
The Reko Diq project is considered one of the largest untapped copper and gold deposits in the world and presents significant economic opportunities for Pakistan.
The Reko Diq case revolves around a huge copper and gold mining project located in Chagai, Balochistan, Pakistan. In 2011, the Pakistani government refused to grant a mining lease to Tethyan Copper Company (TCC), a joint venture between Barrick Gold and Antofagasta Minerals, citing irregularities in the contract.
TCC had discovered significant copper and gold deposits at Reko Diq and planned to invest billions in its development. The company requested international arbitration, alleging that Pakistan violated a bilateral investment treaty.
In 2019, the World Bank’s International Center for Settlement of Investment Disputes (ICSID) ruled in favor of TCC and awarded it $6 billion in damages.
To avoid paying the hefty fine, Pakistan renegotiated with Barrick Gold and reached a deal in 2022. The deal reinstated the project with a new ownership structure, handing 50% of the shares to the federal and provincial governments, while Barrick Gold He retained the other half.
