S Arabia moves closer to $1b Reko Diq deal

In Local
April 21, 2024

Saudi Arabia is moving closer to a potential deal to acquire a minority stake in a Pakistan mine controlled by Barrick Gold Corp, Bloomberg said in a recent report.

Citing sources, the publication said Manara Minerals Investment Co, backed by the Saudi sovereign wealth fund, plans to invest at least $1 billion in the Reko Diq copper and gold mining project and can announce that it has reached a preliminary agreement on terms of a transaction in the next few weeks.

The Saudi company may increase its investment over time in the mine, which is part-owned by the Pakistan government. Deliberations are ongoing, and talks could still fall apart or be delayed.

Saudi Arabia is interested to invest in multiple sectors including metals and mining, Pakistan’s Finance Minister Muhammad Aurangzeb said in an interview Wednesday. A few “of those projects are now pretty close, so I do think we should hear some announcements coming through,” Aurangzeb said.

Pakistan presented a wide range of investment opportunities including solar, mining, hydropower and technology to a visiting Saudi delegation this week, with Saudi Foreign Minister Prince Faisal bin Farhan saying the Gulf kingdom plans to move ahead with the opportunities.

The Reko Diq project located in Chagai district of Balochistan is targeted to begin production in 2028. Barrick owns 50% of the project, with Pakistan’s federal government holding a 25% stake and the Balochistan regional government owning the rest.

Saudi Arabia has been in talks with Pakistan to buy part of the government’s stake in Reko Diq, Barrick Chief Executive Officer Mark Bristow said in a November interview.

The world’s second-largest gold producer would support any decision by the government with the Saudis, while Barrick won’t dilute its equity in the project, Bristow said, according to the report.

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