Saudi Arabia has expressed strong interest in Pakistan’s Reko Diq mining project, signaling its intention to acquire a 15% stake in this valuable venture. In exchange for these shares, Saudi Arabia has proposed a significant grant aimed at developing state-of-the-art infrastructure around the mining area, which would greatly enhance the region’s capabilities and boost the project’s overall efficiency.
In addition to this grant, Saudi Arabia is also prepared to make a cash payment for the 15% stake in the Reko Diq mining project, through Saudi’s Manara Minerals, demonstrating its commitment to becoming a key partner in this major mining initiative. Recognizing the importance of this opportunity, the Pakistani government has decided to establish a dedicated negotiating committee. This committee will be responsible for finalizing the deal, ensuring that the agreement is reached efficiently and in a manner that maximizes the benefits for Pakistan.
It is pertinent to mention here that Pakistan is also focusing on the construction of the Mashkhel-Panjoor road, a critical infrastructure project that will ensure smooth and efficient movement around the Reko Diq mining project area. This development is seen as a key factor in facilitating the operations and logistics of the mining project, making the potential deal with Saudi Arabia even more likely to be finalized.
If this deal comes to fruition, it would mark a significant milestone in the economic relationship between Pakistan and Saudi Arabia. Not only would it enhance collaboration on the Reko Diq mining project, but it would also build on the broader economic ties between the two nations. Pakistan has already requested the rollover of Saudi Arabia’s $5 billion cash deposit, a crucial financial support that underscores the strong economic partnership between the countries. Additionally, Pakistan has made a special request for a new $1.2 billion oil financing facility.
It should be noted that Pakistan holds 25% stakes in the Reko Diq mining project and if the deal finalizes, it would be giving 15% out of that 25% to Saudi Arabia. Moreover, another important factor to highlight is that the total cost of this Reko Diq’s mining project is between $6 billion to $6.5 billion out of which, $3-$3.5 billion would be required for the debt financing of this project. Additionally, Prime Minister Shehbaz Sharif has already taken proactive measures to strengthen economic ties with Saudi Arabia by instructing the State Bank of Pakistan (SBP) to prioritize Saudi Arabian companies in the repatriation of their profits.
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