World Bank and IFC Greenlight $700 Million Loan for Reko Diq Project
The International Finance Corporation (IFC) along with the World Bank has sanctioned a concessional loan of $700 million to support the expansive Reko Diq mining project in Pakistan. This financial endorsement marks a crucial milestone for the resource-rich region of Balochistan and for Pakistan's broader economic ambitions.
Why the Reko Diq Project Matters for Pakistan
Situated in Balochistan, a province abundant with mineral resources, the Reko Diq project represents one of Pakistan’s most significant ventures into large-scale mining and resource development. The recent approval from international lenders is being hailed as a major win, signalling confidence in the project's potential and Pakistan’s investment climate.
Following this approval, expectations are high that the private sector will pump in an additional $2.5 billion to further develop the project’s infrastructure and operations, significantly boosting local and national economies.
Project Ownership and Financials
The Reko Diq mine is a joint venture involving Canadian firm Barrick Gold alongside the federal government and the government of Balochistan. Financing arrangements for the project's first phase, scheduled to commence production by 2028, are actively being negotiated with various lenders.
Updated Project Scope and Timeline
- The latest feasibility studies have expanded the project’s scale, increasing phase one throughput capacity from 40 to 45 metric tonnes per annum, while phase two capacity has grown from 80 to 90 metric tonnes per annum.
- Despite the increased throughput, the mine’s operational life has been revised downward from 42 years to 37 years. However, the company remains optimistic that the discovery of unaccounted minerals could extend the mine life to as long as 80 years.
- The estimated cost for phase one has been adjusted upward to $5.6 billion from the initial $4 billion forecast.
Broader Infrastructure Investment Outlook
Beyond Reko Diq, the World Bank has outlined plans to invest approximately $2 billion annually over the next ten years to strengthen Pakistan's infrastructure. This sustained commitment aligns with efforts to capitalize on mineral wealth and accelerate economic development.
Looking Ahead
With global financial institutions backing the Reko Diq project, Pakistan moves closer to unlocking vast mineral reserves that could transform its economic landscape. The balance struck between increasing production capacity and managing project costs will be key to ensuring long-term success and sustainability of this landmark venture.
