ADB Approves $410 Million for Reko Diq Mine Development

The Asian Development Bank (ADB) has sanctioned a $410 million financial package aimed at bolstering the development of Pakistan’s Reko Diq copper mine. This mine, managed by Barrick Gold, is recognized as one of the world’s largest untapped resources.

A statement released on Friday indicated that the initiative is designed to satisfy the growing worldwide need for essential minerals and stimulate significant economic advancement and poverty alleviation within the nation.

ADB President Masato Kanda stated that Reko Diq would enhance the critical minerals supply chain while also promoting the transition to clean energy and fostering digital innovation in the region and beyond.

The ADB’s support is also a transformative factor for Pakistan, as it generates high-quality employment opportunities and reinforces the nation’s shift toward a more robust and diverse economy.

The ADB is among several institutions funding Reko Diq’s initial phase, and its financial package is expected to attract more private investment by mitigating risks.

The contribution from ADB includes up to $300 million in senior loans for the Reko Diq Mining Company Private Limited (RDMC), the mine’s owner, along with a $110 million partial credit guarantee to cover the equity stake of the Government of Balochistan.

The announcement mentioned that the funding for this endeavor represents the largest foreign direct investment in Pakistan’s history.

Upon its completion, Reko Diq is projected to become the world’s fifth-largest copper mine.

During its first phase, the mine is anticipated to generate an average of 800,000 tons of copper concentrate annually, playing a crucial role in addressing the anticipated worldwide copper shortage.

Copper, a vital mineral for both energy transition and digital transformation, is indispensable for the global manufacturing of renewable energy technologies, electric vehicles, batteries, smartphones, and data centers.

Situated in Balochistan’s Chagai district, the Reko Diq copper-gold mine is poised to exert a considerable positive impact on the economy.

RDMC is a joint venture structured to ensure fair distribution of benefits. Barrick Mining Corporation, responsible for constructing and operating the mine, holds a 50% stake in RDMC. The Government of Balochistan, through Balochistan Mineral Reserve Limited, possesses 25%, while three federal state-owned enterprises collectively hold the remaining 25%.

The ADB noted that Reko Diq marks the first mining venture supported by the multilateral lender under its novel Critical Minerals-to-Manufacturing Value Chains strategy. This strategy is crafted to assist Asia and the Pacific in leveraging the increasing demand for materials crucial to clean energy and digital technologies.

The ADB Board of Directors’ approval empowers the ADB to proceed with finalizing loan documentation and fulfilling other prerequisites before formally committing the financing through signed agreements at a later date.