Barrick’s Reko Diq in line for $410M ADB backing

[Ben Graham]

The Asian Development Bank (ADB) will provide a $410 million financing package to support development of Pakistan’s Reko Diq copper-gold project, one of the world’s largest untapped deposits, operated by Barrick Gold (NYSE: B), Reuters reported on Thursday, citing two sources.

The package includes two loans totaling $300 million to Barrick and a $110 million financing guarantee for the government of Pakistan. It forms part of a broader $6.6 billion development plan for the mine in Balochistan, which is 50% owned by Barrick and 50% by Pakistan’s federal and provincial governments.

Shares of Barrick rose 0.6% Thursday morning, valuing the miner at $42.9 billion.

Reko Diq’s scale and outlook

Reko Diq is forecast to generate about $70 billion in free cash flow over its life and more than $90 billion in operating cash flow. The mine is expected to begin production in 2028, initially delivering 200,000 tonnes of copper annually in Phase 1, before expanding to 400,000 tonnes per year.

A recent feasibility update increased Phase 1 throughput from 40 to 45 million tonnes per year, with costs rising to $5.6 billion from earlier estimates of $4 billion. Phase 2 will process 90 million tonnes annually, up from 80 million. While the mine’s current operating life is pegged at 37 years, Barrick believes upgrades and exploration could extend operations for decades beyond.

Growing international interest

The ADB’s commitment adds to a previously agreed $700 million financing package from the International Finance Corporation (IFC), the World Bank’s private investment arm. The project’s developers are also in talks with the US Export-Import Bank, Export Development Canada, and Japan’s JBIC, with term sheets expected this quarter.

The financing push aligns with Islamabad’s efforts to attract foreign investment into its mining sector, including rare earths, and comes amid a thaw in relations with Washington.

US Secretary of State Marco Rubio recently highlighted critical minerals as a new area of cooperation, noting potential U.S.-Pakistan joint ventures. Pakistan’s commerce ministry has indicated that American firms will be offered lease concessions and joint venture opportunities in Balochistan.

For Pakistan, Reko Diq is not just a mining project but a potential catalyst for wider investment in the country’s resource-rich Balochistan province. For the U.S. and its allies, participation in the project supports efforts to diversify critical mineral supply chains away from China.

After years of delay due to legal disputes—finally settled in 2022—the project is moving ahead with renewed momentum.