- Manara is preparing to buy a stake for around $500 million to $1 billion: FT.
- A Saudi investment would be good for the project: the head of Barrick.
- The Saudi Minister of Mines confirms that Manara is considering acquiring a stake.
Manara Minerals, the Saudi mining investment fund, is set to acquire a stake in the Reko Diq copper and gold project in Pakistan for around $500 million to $1 billion, according to the Financial Times reported Tuesday.
The mining investment fund plans to acquire between 10 and 20% of the shares of the Pakistani government, which owns 25% of the mine, in the Reko Diq project, developed by Barrick Gold, the publication said, citing sources close to them. discussions.
Manara, a joint venture between state-owned Ma’aden and the $925 billion Public Investment Fund (PIF), was established as part of the kingdom’s efforts to diversify its economy away from oil, including by purchasing minority stakes in assets abroad.
Executives from Manara visited Pakistan in May last year to discuss purchasing a stake in the Reko Diq mine, believed to be one of the largest underground copper and gold areas. developed in the world by the global mining company Barrick Gold, which owns the project jointly with Pakistan.
Last week, Saudi Mines Minister Bandar Alkhorayef also confirmed the development, saying the fund was considering investing in the project while the Saudi Development Fund could contribute over $100 million to Pakistan’s mining infrastructure .
“Part of what we are looking at is how we can help Pakistan also in some infrastructure,” Alkhorayef said in an interview on the sidelines of the Future Minerals Forum in Riyadh.
“Without this infrastructure, the economic aspects of the deal are not attractive, which is why, through the Saudi Development Fund, we are considering how we can finance it.”
According to the FT According to a report released today, Manara Minerals plans to purchase between “10 and 20 percent of the $9 billion complex and enter into an offtake agreement for future production.”
Barrick Gold holds a 50% stake in the mine, while the federal and Balochistan governments collectively hold the remaining 50%, ensuring substantial profits for the region.
“It’s a colossal project, it’s going to change Pakistan’s economy. It’s very big,” Barrick Chief Executive Mark Bristow said in an interview in Riyadh on the sidelines of a mining summit last week. .
An investment from Saudi Arabia would be “good for the whole project because it would bring a strong regional partner into the mix”, he added.
The finish line is nearing after a high-level Pakistani delegation visited last week in Riyadh, where Oil Minister Musadik Malik told reporters he expected a deal within the next six months , according to the report.
In addition, the report said, Saudi Arabia is one of Pakistan’s largest external creditors, lavishing it with loan refinancing, central bank deposits and oil facilities to help it secure servicing its debt of $9.2 billion.
Reko Diq, located in western Balochistan near the Afghan and Iranian borders, will produce up to 400,000 tonnes of copper and 500,000 ounces of gold once both phases of the project are completed, according to Barrick.
The initial phase of the mine would cost $4.5 billion and would be financed by $1.5 billion from Barrick, a similar but slightly smaller amount from Pakistan, and the remainder of a debt consortium that would include the World Bank, the Asian Development Bank and other Western countries. lenders, according to Bristow.
A second phase of the mine, estimated at an additional $4.5 billion, would be funded by revenues generated during the first phase, Bristow said.
Some infrastructure is already being developed at the site, including an airstrip and housing for 1,000 workers, in preparation for the start of mine construction soon.