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The International Finance Corporation (IFC), the private investment arm of the World Bank, has announced $300 million in debt financing to support the development of the Reko Diq copper-gold mining project. The site is considered one of the world’s largest undeveloped copper and gold reserves, expected to generate $70 billion in free cash flow and $90 billion in operating cash flow.
The Reko Diq project is a joint venture between Barrick Gold, the Government of Pakistan, and the Government of Balochistan. The project is currently in the process of securing approximately $2 billion in financing for its first development phase from international lenders. According to the project’s director, Tim Cribb, the term sheets for financing are expected to be finalized by the end of Q2 or early Q3.
Ongoing discussions include $650 million in financing from IFC and the International Development Association (IDA), while an additional $500 million to $1 billion is expected from the US Export-Import Bank. Furthermore, development finance institutions such as the Asian Development Bank, Export Development Canada, and the Japan Bank for International Cooperation are considering an additional $500 million in investment.
Talks are also underway for infrastructure and railway financing, with initial costs estimated at around $350 million and total infrastructure costs ranging between $500 million and $800 million. A recent feasibility study has expanded the project’s scope, increasing phase one throughput to 45 million tonnes per annum and phase two to 90 million tonnes per annum. However, due to increased throughput, the estimated mine life has been revised down from 42 years to 37 years. Still, the company is optimistic that unaccounted mineral reserves could extend the life of the project up to 80 years.
The cost of phase one has also been revised upward from $4 billion to $5.6 billion. The World Bank plans to invest $2 billion annually in Pakistan’s infrastructure over the next decade. Lenders are also preparing offtake agreements with potential buyers, including countries in Asia such as Japan and South Korea, as well as European nations like Sweden and Germany, which are aiming to secure stable copper supplies for their industries.
