The bull run in Pakistan’s capital market is encouraging, but the outlook for critical long-term investments appears less optimistic. For instance, the multi-billion-dollar copper and gold project at Reko Diq in Balochistan’s Chagi district may face delays in materialising, despite the active involvement of Canadian giant Barrick Gold, which holds commanding 50 per cent stake in the venture.

The recent changes in the ownership structure of the Reko Diq mining project, driven by the expressed interest of key bilateral partner Saudi Arabia and principal investor Barrick Gold, are reportedly contributing to the current delays.

Over the years, Saudi Arabia has consistently expressed interest in investing in Pakistan’s oil and gas sector, along with infrastructure, agriculture and industry. During a visit in October, Sheikh Khalid Bin Abdul Aziz Al Falih, Saudi Minister for investment, informed that the newly established Manara Mineral Investment Company — backed by Saudi’s trillion-dollar sovereign wealth fund, the Public Investment Fund (PIF) and the national mining company, Ma’aden — plans to invest $1 billion in the Reko Diq project. He also emphasised the strong relationship of trust and partnership between his country and Barrick Gold.

The Canadian mining giant sought Saudi Arabia’s participation in a major project in Pakistan’s restive region to mitigate the risk of policy shifts. “Barrick believes Riadh’s involvement would serve as a safeguard against abrupt policy changes in Pakistan”, remarked a legal source familiar with the earlier Reko Diq case, speaking off the record.

Finalising the ownership arrangement could be delayed by several months as the government has yet to receive the updated feasibility report to determine the share price

The government has reportedly resolved disagreements over stake allocation by agreeing to transfer 15pc of its 25pc share to Saudi Arabia, a key bilateral partner.

Sources in Islamabad, familiar with the negotiations on reallocation of the federal government’s stakes, informed this scribe that Saudi Arabia sought at least 20pc share while the federal

government was firm on not relinquishing more than 10pc of its holding in the venture. “It took time and persuasion from intermediaries on both sides to reach 15:10 ownership ratio between KSA and the GoP in the Reko Diq project,” a source revealed.

“Ideally, the government should have significant stakes in a project of this nature,” remarked a mining expert. “However, the project is too important for Pakistan to risk its progress, even if it means partially sacrificing its interests”, he added, expressing support for Saudi involvement in the key mining project if it is necessary to reassure Barrick Gold.

Saudi Arabia has announced its intent to invest $1bn in the Reko Diq project. However, the share price is yet to be finalised by a price formation committee established to formalise the deal. The committee has reportedly been tasked with determining a fair share price in collaboration with global experts.

Until then, KSA’s participation in the project will remain uncertain. According to the gathered information, finalising the ownership arrangement could be delayed by several months as the government has yet to receive the updated feasibility report required for determining the share price. If Barrick submits the said report this month, the process of inducting Saudi Arabia into the project is expected to be completed by mid-2025.

The share price will be determined based on the Canadian mining company’s current assessment of the volume and value of copper and gold in the designated mining area.

The Special Investment Facilitation Council (SIFC), a joint civil-military body overseeing the Reko Diq project and assisting potential overseas investors, was approached for input and comments on the progress. As of the report’s filing, a response from the apex body was still awaited. According to insiders, the SIFC held its 10th executive board meeting last week, during which the matter was discussed in depth.

Efforts to contact Barrick officials in Pakistan were unsuccessful, partly because many members of the initial team have reportedly moved on and are no longer with the company.

Muhammad Azfar Ahsan, former minister for investment and founder of Corporate Pakistan Group, expressed cautious optimism. While acknowledging the value of Saudi participation in the project, he urged attention to the needs of existing overseas investors and local industrialists who hold the potential to transform the resource-rich country.

“Pakistan needs to move beyond ad-hoc measures and crisis management, and instead develop a long-term economic strategy for growth, adhering to it strictly, regardless of which party is in power,” he argued.

He recognised the emergence of positive economic indicators, such as single digit inflation rate and reduced twin deficits, but expressed doubts about the sustainability of these trends unless the necessary inflows of investments begin. He also highlighted the importance of competent teams in the economic ministries.

Elated by Saudi Arabia’s interest in investing in Pakistan, several individuals contacted for comments attempted to claim credit. Multiple sources asserted their role in facilitating business-

to-business and government-to-government engagements. Responses from Finance Minister Aurangzeb Khan and Energy Minister Musadiq Malik were still awaited at the time of filing of this report.

Published in Dawn, The Business and Finance Weekly, December 16th, 2024