Historic Investment in Mining Sector
The Asian Development Bank (ADB) approved a $300 million loan for Pakistan’s Reko Diq copper and gold mine, its first mining sector investment in more than four decades, the reports stated. This is an indication of international confidence in a project for years plagued by legal controversies, governance issues, and local instability.
Developed by Pakistan’s federal government, the Balochistan provincial government, and Barrick Gold jointly, Reko Diq is a $9 billion project that consists of one of the largest undeveloped gold-copper deposits worldwide. Production will begin in 2028, while the mine is anticipated to run for a minimum of 40 years. In addition to the loan, ADB will also issue a $110 million guarantee to Balochistan, which owns a 25% stake in the project.
These type of transactions are part of the larger energy transition narrative,” declared ADB deputy director-general of private sector operations Cathy Marsh, citing the bank’s rising interest in critical mineral projects.
A troubled past and legal battles
The Reko Diq mine has a chequered history. First initiated in 1993 as a joint venture with BHP of Australia, the project encountered stiff opposition within Balochistan, one of Pakistan’s poorer provinces. Fears varied from fears of exploitation to being left out of economic gain. Following the withdrawal of BHP, Chile’s Antofagasta and Canada’s Barrick Gold took over the project in Tethyan Copper Company (TCC), but the provincial government rejected a mining lease in 2011, prompting a multi-billion-dollar legal battle.
The International Centre for Settlement of Investment Disputes (ICSID) finally favored TCC in 2019, directing Pakistan to pay almost $6 billion for illegally denying the license. In spite of all these setbacks, new agreements in 2023 incorporated advance royalty payments and special social development funds to guarantee local populations will derive advantage from the mine even before production is started.
Geopolitical and Economic Significance
The ADB assistance reflects the geopolitical significance of key minerals during the global push to diversify away from China for such resources as rare earths and lithium. Western countries are looking for alternative supplies more and more, and Pakistan hopes to have Reko Diq draw substantial foreign investment while diversifying its economy.
Army Chief Asim Munir pointed to the mine’s potential to ease Pakistan’s debt, currently over $130 billion. Foreign funding, including a 2025 investment by the International Finance Corporation, has strengthened belief in the project’s viability.
Though controversy surrounds past operations, officials assert that the mine will create employment, infrastructure growth, and economic dividends for nearby communities while following global standards. The Reko Diq project now represents Pakistan’s vision to be a prominent producer in the international market for critical minerals.
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Looking Ahead
Production is planned for 2028, with an anticipated operational lifespan of four decades. The venture will provide key copper and gold into world markets, increase the economic resilience of Pakistan, and show how concerted international and local cooperation can resuscitate even the most disputed projects.
