Pakistan hits JACKPOT, to become super rich as Reko Diq project secures Rs 35795449094 package from…, the project is related to…
Reko Diq: In a major boost for Pakistan, the cash-strapped nation has secured a financing package of $410 million (about Rs 3,579 crore) from the Asian Development Bank (ADB) for its ambitious Reko Diq copper-gold mine project in the mineral-rich Balochistan region. The package is expected to provide impetus to Reko Diq, one of the world’s largest untapped mineral projects.
What is the Reko Diq Project?
The Reko Diq project is one of the world’s largest untapped copper and gold deposits in the remote Chagai mountains in Pakistan’s Balochistan province. The region is believed to contain vast reserves of gold and copper.
The Reko Diq mine is owned Canadian firm Barrick Gold and other stakeholders, including Pakistan’s federal government, and the provincial government of Balochistan.
The first phase of the Reko Diq project is expected to begin production in 2028, with an annual target of 240,000 tonnes of copper and 300,000 ounces of gold, In the second phase, production is expected to increase to 400,000 tonnes of copper and 500,000 ounces of gold per year in the second phase.
According to a recent study, the Reko Diq mine contains 15 million tonnes of copper, and 26 million ounces of gold reserves, and has the potential to become one of the world’s lowest-cost copper producing mines. The estimated cost of the Reko Diq project is pegged at around $6.6 billion, including $5.6 billion for the first phase, and remaining for subsequent phases.
Why ADB package could boost the project?
The ADB package includes a $300 million loan to Barrick Gold, and a partial loan guarantee of $110 million covering the equity contribution of the provincial government of Balochistan.
In a statement, ADB President and Chairperson of Board, Masato Kanda, described the Reko Diq project as a game-changer for Pakistan, that could help the country to build a resilient, diversified economy. Once operational, Reko Diq will be among the top five copper mines on the planet, and is expected to generate about $75 billion for Pakistan over its estimated 37-year life, making it one of the argest foreign direct investments (FDI) in the country.
How Reko Diq could revive Pakistan economy?
As per a recent feasibility report, the production capacity of the project could be up to 45 million tonnes per annum from the earlier 40 million in Phase 1, and from 80 million tonnes to 90 million tonnes in Phase 2. While the mine’s life has reduced from 42 years to 37 years due to increased production rates, stakeholders believe that undiscovered mineral reserves could extend the project’s life to up to 80 years.
Meanwhile, experts believe that the financing packages from global instructions such as the ADB, World Bank and IFC are crucial for the Reko Diq project, which is also expected to attract additional investments of $2.5 billion from the private sector.
Experts believe the project could significantly boost the broken Pakistan economy, generating over $75 billion free cash flow and $90 billion in operational cash flow over its lifetime.
HIGHLIGHTS
- Pakistan has received a $410 million package from the ADB for the Reko Diq project.
- The package is expected to provide impetus to Reko Diq, one of the world’s largest untapped mineral projects.
- The project is expected to revive Pakistan’s broken economy by generating over $90 billion.
- The Reko Diq mine reportedly contains 15 million tonnes of copper, and 26 million ounces of gold reserves.
Meanwhile, Pakistani experts have hailed the Reko Diq project as a major turning point in Pakistan’s fiscal future, and argue that the ADB package has enhanced the project’s attractiveness among private and public investors across the globe.
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