Saudi Arabia eyes stake in Pakistan's Reko Diq mine

November 15, 2023 (MLN): Saudi Arabia has shown interest in acquiring the government's stake in Pakistan's Reko Diq gold and copper mine, a Pakistani official said on Tuesday, as Reuters reported.

Barrick Gold Corp, which holds a 50% stake in the mine, considers the mine as one of the world's largest underdeveloped copper-gold areas.

Alongside Barrick Gold the remaining 50% of the mine is held by the governments of Pakistan and the province of Balochistan.

This potential investment will prove to be a major deal for the crisis-ridden $350 billion South Asian economy.

Pakistan narrowly averted sovereign default earlier this year after a last-gasp $3bn bailout from the International Monetary Fund, but the deal rests on bringing in foreign direct investment to shore up critically low foreign exchange reserves.

Islamabad has appointed an international adviser to do an valuation of its stake in the mine and expects this to be completed before December 25, after which talks will begin with Riyadh, Jahanzeb Khan, the prime minister's adviser special investments, told journalists.

Jahanzeb Khan did not identify the adviser but media outlet Arab News reported that United Arab Emirates-based consulting firm RB&A Partners has been hired. The firm declined comment in an emailed response to a Reuters query.

Pakistan has previously said Barrick would invest $10 billion in the project.

Moreover, Barrick in August said it was open to bringing in Saudi Arabia as one of its partners in the mine.

The Saudi Arabian government did not immediately respond to a request for comment.

The advisor further said that Saudi Arabia and other traditional Middle Eastern allies could potentially line up around $70bn in investments in various sectors.

"Pakistan was keen on having Saudi Arabia on board, but stressed that Islamabad was "not in a rush" and did not want to have "distress sales" for any of its assets and would protect its national interests," hr added.

Pakistan set up its Special Investment Facilitation Council (SIFC) in June to help make investing faster and easier and with a focus on sectors including agriculture, mining and information technology.

Jahanzeb Khan said even the IMF had inquired about the SIFC's powers but that the body would ensure transparency in all transactions.

Regarding the inclusion of Pakistan's army chief in the SIFC Khan said the military was key to ensure physical security for investors Reko Diq is located in the restive southwestern province of Balochistan which is in the grip of multiple insurgencies.

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