ISLAMABAD: The Federal Cabinet has approved the sale of a 15% stake in the Reko Diq project to Saudi Arabia for $540 million under the Intergovernmental Commercial Transactions Act.
According to industry sources, the Federal Cabinet has now allowed the Saudi government to acquire the shares through a direct deal, and the move is seen as a major step towards strengthening bilateral relations and advancement of Pakistan’s mining sector.
The Kingdom of Saudi Arabia will pay the amount in two installments. In the first phase, Saudi Arabia will get a 10% stake in the project, and $330 million will be transferred to Pakistan. The remaining 5% stake will be purchased in the second phase for $210 million.
In addition to the share acquisition, the Saudi Fund for Development pledged $150 million to support the development of mineral resources in Balochistan. Moreover, Saudi Arabia has shown great interest in investing in mineral exploration activities in Chagai, where the Riko Dik region is located.
The Rico Diq project, located in Pakistan’s resource-rich Balochistan province, is among the world’s largest untapped copper and gold mines. The federal and Balochistan governments collectively own 50% of the project, ensuring significant benefits for the region.
The development of Rico Deck is expected to unlock great economic potential for Pakistan. The successful implementation of the project will not only boost the mining sector, but will also create employment opportunities, enhance infrastructure, and provide long-term revenue sources for both the federal and provincial governments.
This partnership with the Kingdom of Saudi Arabia reflects the growing international confidence in Pakistan’s mining sector. The Kingdom of Saudi Arabia’s participation in the Rico Deck project is consistent with its broader strategy to diversify investments and cooperate with strategic partners.
The two-stage payment structure ensures that Pakistan will receive significant financial inflows over time, which will strengthen the national economy and enhance reserves. In addition, the Saudi Fund for Development’s commitment to invest in Balochistan’s mineral resources indicates a positive trajectory for future exploration and development projects.
It is expected that the Saudi investment will pave the way for enhancing technological expertise and global best practices in the mining sector. It will also contribute to regional development, especially in Balochistan, which has long been considered backward despite its rich resource base.
With the approval of the Federal Cabinet, all necessary formalities for the deal will be expedited, and the first tranche of $330 million is expected to be obtained shortly after the initial 10% stake is transferred. This deal represents a new era of cooperation between Pakistan and Saudi Arabia, as both countries are poised to reap significant benefits from this partnership.
