To meet future cargo demands, Prime Minister Shehbaz Sharif on Tuesday directed authorities to connect the Reko Diq project in Balochistan to the Pakistan Railways network by 2028.
The move is key to fast-tracking the development of one of the world’s largest underdeveloped copper-gold deposits, which are hoped to generate around $70 billion in free cash flow and $90 billion in operating cash flow.
American miner Barrick Gold owns a 50% stake in the Reko Diq mine, and the governments of Pakistan and the province of Balochistan own the other 50%.
The mining giant considers the project to have a significant impact on Pakistan’s struggling economy.
While chairing a meeting today, PM Shehbaz issued orders for the formation of an inter-ministerial committee to look after financing matters for upgrading and developing Pakistan Railways.
The committee will present recommendations regarding the financing required for Pakistan Railways’ development and its extension to Reko Diq.
During the meeting, the prime minister was briefed on the upgradation of ML-1 and ML-3 railway as well as the overall development of Pakistan Railways to meet the requirements of future transportation and cargo services.
The premier noted that Pakistan Railways served as a backbone for the country’s economy and communication. “Pakistan Railways is a cheap, fast and environment-friendly source of transportation,” the premier said.
He added that the mines and mineral sector of Balochistan would develop, and new employment opportunities would be created for the people of the area after linking railways with Reko Diq.
Saudi Arabia’s Manara Minerals announced in January that it plans to acquire a 10–20% stake in the Reko Diq copper and gold project, with the deal expected to bring in $500 million to $1 billion.
In April, shareholders of the Reko Diq Joint Venture approved a revised feasibility study and gave conditional approval for Phase-1 development, subject to securing up to $3 billion in financing.
The project, which was delayed due to a long-running dispute that ended in 2022, is expected to start production by the end of 2028. It will produce 200,000 tons of copper per year in its first phase, with an estimated cost of $5.5 billion. The first phase is expected to be completed by 2029.
The meeting was attended by Deputy Prime Minister and Foreign Minister Ishaq Dar, Defence Minister Khawaja Asif, Minister for Economic Affairs Ahad Khan Cheema, Minister for Maritime Affairs Junaid Anwar Chaudhry, Minister of State for Railways Bilal Azhar Kayani, Special Assistant to the Prime Minister Tariq Fatemi, and senior government officials.