International Finance Corporation to Provide $400 Million Loan for Pakistan’s Reko Diq Copper-Gold Mine
In a significant development, the International Finance Corporation (IFC) has announced that it will provide a $400 million subordinated loan for Pakistan’s Reko Diq copper-gold mine, according to a disclosure by the IFC. This loan adds to a $300 million commitment announced in April, bringing the IFC’s total financing for the project to $700 million.
The estimated cost of the mine is $6.6 billion, which will be funded through a mix of debt and equity from a consortium of lenders. As stated in the IFC disclosure, "The estimated total Project cost is $6.6bn, and it will be financed using a combination of debt and equity." Other parallel lenders are expected to provide the remaining debt financing.
This type of loan, known as subordinated debt, is typically repaid after other senior loans and helps absorb more risk, making it easier for other lenders to invest. The IFC’s involvement in the project is seen as a significant boost, with the institution’s chief, Makhtar Diop, stating earlier this year that the IFC was "doubling down" on Pakistan, with a focus on infrastructure, energy, and natural resources.
The Reko Diq mine, located in Balochistan, is one of the world’s largest undeveloped copper-gold deposits. The project is being developed by Barrick Gold, which holds 50% of the stake, with the remainder split between Pakistan’s federal and provincial governments. According to Barrick Gold’s projections, production is expected to begin in 2028, and the mine will generate up to $74 billion in free cash flow over its estimated 37-year life.
As reported by Yahoo Finance, other financiers, including the U.S. EXIM Bank, Asian Development Bank, Export Development Canada, and Japan’s JBIC, are also expected to join the financing package. Project director Tim Cribb told Yahoo Finance in April that term sheets are expected to close by early in the third quarter.
The IFC’s investment in the Reko Diq mine is seen as a significant step towards boosting Pakistan’s economy, which has been facing challenges in recent years. The project’s development is expected to create jobs, stimulate economic growth, and increase Pakistan’s exports. According to Yahoo Finance, the IFC’s Makhtar Diop stated that the institution is committed to supporting Pakistan’s economic development, and the Reko Diq project is a key part of this strategy.
The loan is also seen as a vote of confidence in Pakistan’s mining sector, which has faced challenges in the past. The country’s mining industry has significant potential, with the Reko Diq mine being one of the largest undeveloped copper-gold deposits in the world. As stated in the Yahoo Finance report, "The IFC’s investment in the Reko Diq mine is a significant step towards unlocking the potential of Pakistan’s mining sector."
In conclusion, the IFC’s $400 million loan for the Reko Diq copper-gold mine is a significant development for Pakistan’s economy and mining sector. The project’s development is expected to create jobs, stimulate economic growth, and increase Pakistan’s exports. As reported by Yahoo Finance, the IFC’s investment in the project is a key part of its strategy to support Pakistan’s economic development.
The IFC’s involvement in the project is also seen as a significant boost to the country’s mining sector, which has faced challenges in the past. The Reko Diq mine is one of the world’s largest undeveloped copper-gold deposits, and its development is expected to have a significant impact on Pakistan’s economy.
Source: Yahoo Finance
