Pakistan and Saudi Arabia have reached an agreement in principle for Islamabad to sell its 15% stake in the Reko Diq project to Saudi investors.
Following Barrick Gold Corporation’s refusal to sell all of its interests in the multibillion-dollar project, a decision was made.
Pakistan’s total stake in the Reko-Diq project is anticipated to drop from its current 50% to 35% as a result of this move. The current 25% share of the Balochistani government would stay out of the 35% total, while the federal government’s State-Owned Enterprises (SOEs) would see a decrease in ownership from 25% to 10%.
Pakistan will now maintain a minority stake in the project, according to reports.
A top government official stated to local media that Pakistan had experience managing certain businesses in joint ventures with foreign entities. Therefore, the government made the deliberate decision that the conversion to a minority shareholder in the Reko Diq project would not present a practical issue, taking into account the experience in the banking sector and with PTCL.
According to an additional official, Barrick Gold is obligated by specific provisions of the current Reko Diq arrangement to refrain from making any significant decisions on its own, particularly those pertaining to investments.
The reports stated that Pakistan would be able to apply these clauses in the event of an emergency.
In the midst of a declining investment-to-GDP ratio that reached its lowest point in the previous 50 years during the fiscal year 2023–2024, a breakthrough in resolving the Reko Diq with Saudi Arabia’s involvement is anticipated, which would be crucial for enhancing the investment climate.
