Pakistan Secures $700 Million Loan for Reko Diq Project from World Bank and IFC
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In a significant development, Pakistan has secured a concessional loan of $700 million (approximately Rs 6,000 crore) from the World Bank and the International Finance Corporation (IFC) for the Reko Diq project, a major mining and resource development initiative in the Balochistan region. This loan is expected to be a game-changer for Pakistan’s economy, which has been struggling in recent times.
The Reko Diq project, located in the remote Chagai mountains of Balochistan, is one of the world’s largest untapped copper and gold deposits. According to a report from India.com, the project is owned by Canadian firm Barrick Gold and other stakeholders, including the Pakistani federal government and the provincial government of Balochistan.
What is the Reko Diq Project?
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The Reko Diq project is expected to begin production in 2028, with an annual target of 240,000 tonnes of copper and 300,000 ounces of gold. In the second phase, production is expected to increase to 400,000 tonnes of copper and 500,000 ounces of gold per year. A recent study has revealed that the Reko Diq mine contains 15 million tonnes of copper and 26 million ounces of gold reserves, making it one of the world’s lowest-cost copper producing mines.
As per details, the total cost of the Reko Diq project is estimated at $6.6 billion, including $5.6 billion for the first phase and the remaining amount for subsequent phases. Negotiations are currently underway with several international lenders to fund the first phase of the project, according to reports from India.com.
How Reko Diq Project Could Boost Pakistan’s Economy
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A recent feasibility report has increased the production capacity of the project to 45 million tonnes per annum from the earlier 40 million in Phase 1, and from 80 million tonnes to 90 million tonnes in Phase 2. While the mine’s life has reduced from 42 years to 37 years due to increased production rates, stakeholders believe that undiscovered mineral reserves could extend the project’s life to up to 80 years.
According to India.com, experts believe that the $700 million loan received from the World Bank and IFC is crucial for the Reko Diq project, as it is expected to attract additional investments of $2.5 billion from the private sector. The project could prove to be a game-changer for Pakistan’s economy, as it is estimated to generate $70 billion in free cash flow and $90 billion in operational cash flow.
Impact on Pakistan’s Economy
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The Reko Diq project has the potential to significantly boost Pakistan’s economy, which has been facing challenges in recent times. The project is expected to create employment opportunities, increase foreign exchange earnings, and contribute to the country’s GDP growth.
As reported by India.com, the project’s success could also have a positive impact on Pakistan’s balance of payments position, as it is expected to generate significant foreign exchange earnings.
Conclusion
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In conclusion, the Reko Diq project is a significant development for Pakistan’s economy, and the $700 million loan from the World Bank and IFC is a crucial step towards its implementation. As reported by India.com, the project’s success could have a positive impact on Pakistan’s economy, and it is expected to generate significant foreign exchange earnings and create employment opportunities.
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