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Saudis in talks with Pakistan on Reko Diq

6th November 2023

By: Bloomberg

  

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Saudi Arabia is in ongoing talks with Pakistan to buy part of the government’s stake in a $7-billion copper project jointly owned with Barrick Gold, according to the head of the mining company.

Saudi Arabia may acquire partial ownership in Reko Diq — one of the world’s largest undeveloped copper and gold deposits — through an equity purchase with Pakistan’s government, Barrick CEO Mark Bristow said last week.

“That’s something that is in the hands of the Pakistan government to come to a decision on,” said Bristow, who oversees the world’s No. 2 gold producer. “We would support any decision that’s made by the Pakistan government with the Saudis.”

The project, in the Balochistan region bordering Afghanistan and Iran, is capable of producing 200 000 t of copper and 250 000 oz of gold a year for more than half a century. Reko Diq is 50% owned by Barrick, with Pakistan’s federal government holding a 25% stake and the Balochistan regional government owning the rest. Bristow said Barrick won’t dilute its equity in the project.

Pakistan’s state-owned energy exploration companies, which have a stake in Reko Diq, said in September they were looking into “potential engagement” with sovereign foreign investors, without giving details.

“There have been ongoing discussions between Saudi Arabia and Pakistan,” Bristow said on Thursday.

Investors and metals producers are scouring the world for copper assets as demand for battery metals accelerates. Gold majors like Barrick and Newmont Corp. have made moves to boost copper output, while countries such as Saudi Arabia have sought greater control of the commodities needed to sustain and decarbonize the world’s economies.

Barrick’s push to develop Reko Diq, set to start producing in 2028, has sparked speculation on who will invest in the project. Bristow said in September that he has seen newfound “interest” from multinational mining firms that have been hesitant to venture into tricky regions of the world, though none have spoken publicly about investing.

Egyptian gold billionaire Naguib Sawiris, a major investor in gold miners, said last month that he’s interested in a stake in Reko Diq — something the CEO of Toronto-based Barrick dismissed.

“He’s got about two chances of getting a stake in Reko Diq: no chance, and absolutely no chance,” Bristow said.

Edited by Bloomberg

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