US shutdown ends, clears path for Reko Diq project’s financial closure

ISLAMABAD: The end of 43-day US government shutdown has unlocked a critical milestone for Pakistan’s landmark Reko Diq copper-gold project.

The $7.765 billion initiative in Balochistan’s Chagai district, long delayed, is now poised to achieve financial closure, with Reko Diq Mining Company (RDMC) officials targeting December 2025 for finalisation, a senior official told The News.

“The Reko Diq project, expected to generate $74 billion in free cash flows over its 37-year lifespan, is widely regarded as a cornerstone of Pakistan’s economic strategy. Construction is slated to begin in December 2025, with commercial operations planned for 2028. Its strategic significance spans economic, financial and regional development dimensions.”

“The U.S. EXIM Bank, which had committed between $900 million and over $1 billion, can now release funds following the resolution of the shutdown. Additional international support includes the International Finance Corporation (IFC) with $700 million in financing, including a $400 million subordinated loan secured on the SOEs’ balance sheets, and the Asian Development Bank (ADB) providing a $300 million loan along with a $110 million credit guarantee to the Government of Balochistan. Negotiations with other international financiers, including Export Development Canada and Japan Bank for International Cooperation (JBIC), are at advanced stages.”

The project’s financing structure is based on a 50:50 equity-to-debt ratio, balancing risk between local and international stakeholders while avoiding over-leveraging. RDMC, the special-purpose vehicle overseeing the project, is owned by Barrick Gold Corporation (50%, lead operator), the Government of Pakistan (25%, via OGDCL, PPL and GHPL), and the Government of Balochistan (25%, including a 10% free-carried stake and 15% fully funded share). This ensures Balochistan benefits from revenue sharing without assuming financial liability.

In parallel, RDMC has committed $390 million in bridge financing for the upgrade of Pakistan Railways’ Main Line-2 and Main Line-3, connecting the mine to Port Qasim. The rail infrastructure is expected to be ready before the mine becomes operational in 2028, enabling seamless export of copper and gold.

The Reko Diq project is expected to create thousands of jobs across technical, skilled and unskilled sectors, boost foreign exchange reserves and stimulate regional development in Balochistan. Officials describe it as a “transformational economic engine” that could redefine Pakistan’s approach to large-scale resource development, both financially and socially.