The United States wants to provide debt financing for the Reko Diq mining project in Pakistan. The Export-Import (Exim) Bank of the United States wants to give a loan for the development of Reko Diq.
The project’s estimated cost is around $6.5 billion, with roughly $3.5 billion needed in debt financing. The exact contribution from the US Exim Bank isn’t confirmed, reported Express Tribune.
The financing proposal includes a condition that the Exim Bank be granted preferred creditor status. The loan would likely be used for procuring earth-moving machinery from the US. Discussions are ongoing, with Finance Minister Muhammad Aurangzeb and US Ambassador to Islamabad Donald Blome reportedly involved.
If the deal proceeds, it will be the first major US investment in Pakistan after a long time.
US involvement in the project could also facilitate additional loans from other creditors, contingent upon Pakistan granting preferred creditor status to the Exim Bank.
Pakistan is also considering leasing adjacent Tethyan Metallogenic Belt blocks to further expand the project.
The Reko Diq project is owned 50 percent by Barrick Gold, 25 percent by three federal government entities, and 25 percent by Balochistan. Pakistan has also offered Saudi Arabia the opportunity to acquire stakes in the precious mine.
The Reko Diq project is estimated to have a lifespan of at least 40 years, with construction planned in two phases and a combined processing capacity of 80 million tons per year.
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