The federal government has increased the budget for the first phase of the Reko Diq copper and gold mining project by 58%, taking the total cost to $6.8 billion. This decision comes after a new feasibility study and technical assessment by Barrick Gold, which holds a 50% stake in the project. Authorities anticipate the additional $2.5 billion investment will be offset by the surge in global gold and copper prices.

Over its 30-year life span, the project is expected to yield $7.1 billion in royalties, taxes, and dividends for Pakistan’s federal and provincial governments, who jointly own the remaining 50% of the project.

Financing Breakdown and Self-Funding Phase-2

The financing for Phase-1 includes $5.566 billion allocated for mine development and infrastructure, while $1.199 billion will address interest payments and inflation-related costs. The project's second phase will rely on revenues generated from mining operations to fund its development.

Collaborative Stakeholder Structure

The Reko Diq project operates as a joint venture among Barrick Gold, the federal and provincial governments of Pakistan, and state-owned entities. Local stakeholders—Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), and Government Holdings (Private) Limited (GHPL)—hold a combined 25% stake, while the Balochistan government also owns 25%. Barrick Gold retains the remaining 50%.

The Economic Coordination Committee (ECC) has reviewed and approved the revised financial plan. Local entities, including Pakistan Minerals (Private) Limited (PMPL) and Balochistan Mineral Resources Limited (BMRL), will contribute $1.879 billion and $1.128 billion, respectively. To ease financial pressures, the federal government plans to secure funding from commercial banks, supported by international export credit agencies.

Economic Impact and Strategic Significance

Reko Diq, one of the world's largest untapped reserves of copper and gold, is poised to generate billions of dollars in revenue, create thousands of jobs, and attract significant foreign investment. It is being hailed as a cornerstone of Pakistan’s long-term economic strategy, particularly in addressing foreign exchange shortages.

Overcoming Legal and Financial Challenges

The project has overcome various obstacles, including a legal dispute with Barrick Gold and Antofagasta PLC. In December 2022, a settlement was reached, allowing Barrick Gold to resume operations. Antofagasta exited the venture for a $900 million settlement, restoring confidence among investors and paving the way for future progress.

Future Development Timeline

Following ECC’s approval, agreements and funding arrangements are being expedited. Final approval for the development plan is expected in April 2025, after which construction will commence. Once operational, Reko Diq is projected to produce around 200,000 tons of copper and 250,000 ounces of gold annually, with significant financial benefits allocated to the Balochistan government and local communities.