With backing from IFC: Reko Diq project set to add 1% to Pak GDP annually

ISLAMABAD: In a major leap for Pakistan’s economy, the Reko Diq Copper Project is set to contribute nearly 1 percent to the country’s GDP annually, positioning it as one of the most significant industrial ventures in country’s history.

“Backed by latest major financing package from the International Finance Corporation (IFC)- including a US$300 million direct loan and US$400 million in blended finance - the project marks IFC’s first mining investment in Pakistan and signals renewed global confidence in the country’s economic potential,” said Dr Tauqir Shah, top aide to the prime minister.

Talking to The News, he said the IFC will also act as the lead lender and environmental and social coordinator, ensuring the project aligns with international standards and sustainable practices.

Of late the IFC and the World Bank have approved a concessional loan of $700 million for the Reko Diq project.

A media report claimed that as a result of this approval, the private sector is expected to invest $2.5 billion in the Reko Diq project. Dr Shah has played a key role in this achievement.

The PM’s adviser claimed that Reko Diq is poised to become a cornerstone of Pakistan’s economy, generating up to US$2 billion annually in gross value added - equivalent to roughly 1 percent of the country’s GDP based on 2024 figures. The project will also provide vital foreign currency earnings, as 100 percent of revenues will be in foreign exchange.

Spearheaded by Reko Diq Mining Company (Private) Limited (RDMC), the venture is expected to become one of the world’s largest copper mines, unlocking massive economic, social, and environmental potential for the country.

Owned by Canada’s Barrick Gold Corporation (50 percent), along with Pakistani stakeholders including three state-owned enterprises (25 percent) and the government of Balochistan (25 percent), the Reko Diq mine boasts one of the largest untapped copper reserves on the planet. “With a projected mine life of 40 years, the operation is set to yield 200,000–250,000 tons of copper annually - at a time when global demand for copper is soaring, fueled by the clean energy transition and infrastructure growth, ” informed Dr Shah.

He added that at the peak of construction, the project is expected to create up to 10,000 jobs, prioritising local Baloch workers across skill levels. During its operational phase, the mine will support around 3,000 direct jobs and thousands more through indirect and supply chain employment. Importantly, RDMC is committed to inclusive hiring, with targeted programmes to enhance female participation in the workforce. Already, RDMC has invested US$2.5 million into local infrastructure, education, health services, clean water initiatives, and food security.

The company has pledged to contribute 1 percent of construction costs and 0.4 percent of annual revenue to community-led development throughout the mine’s lifespan.

Meanwhile, official sources said that with supporting infrastructure in power, water, and transport under development, Reko Diq could pave the way for further mineral exploration and broader regional investment.

As one of the most ambitious mining projects ever undertaken in Pakistan, Reko Diq is poised to reshape Balochistan’s economic future. With international backing, adherence to environmental and social safeguards, and deep community engagement, the project could serve as a blueprint for responsible resource development across the country, explained the sources.

There is a challenge for Pakistan Railways to upgrade railroads from Reko Diq to Karachi and build a new railway route from Reko Diq to Gwadar port. Meanwhile a senior official source lamented, “Considering that this huge reservoir of global proportions was always there - and almost on the surface - it is a sad commentary on governance and decision making of successive governments who failed to use this natural resource for welfare of people and the country.” He added, “This is an epic story, of whimsical decision making, incompetence and misplaced judicial activism, which wasted nation’s three to four decades.”