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Saudi Arabia's Manara Minerals is reportedly in advanced talks to acquire a minority stake in Pakistan’s Reko Diq gold and copper mine project. The project, located in the commodity-rich province of Balochistan, is on track to start production by 2028.
According to Bloomberg and the state-run Radio Pakistan, the official announcement could come within a few weeks. Pakistan's Special Investment Facilitation Council, which was set up last year to revive the economy, is reportedly working on the deal.
The current ownership structure of Reko Diq sees Barrick Gold Corp (NYSE:GOLD) holding a 50% stake, with the remaining 50% divided between the federal government of Pakistan (25%) and the Balochistan provincial government (25%). Although Manara’s entry would dilute ownership somewhat, Barrick's CEO Mark Bristow expressed openness to Saudi Arabia acquiring Pakistan’s stake.
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Manara Minerals is a joint effort between the Saudi Public Investment Fund (PIF) and the state-owned mining company Ma'aden. Formed in 2023, the company takes minority equity positions as a non-operating partner in projects connected to commodities such as iron ore, copper, nickel and lithium.
Its notable investment is a 13% stake in Vale's (NYSE:VALE) base metals business, estimated at $3.4 billion. Currently, the company is exploring an investment in First Quantum Mineral’s (OTCPK: FQVLF) Zambian copper mines.
The project’s location in Pakistan’s largest and resource-rich province introduces complexity. Balochistan has a long history of separatist movements fueled by a perception of central government resource exploitation. Poverty rates significantly exceed the national average, and the province has witnessed several armed uprisings since Pakistan’s independence in 1947.
Baloch nationalists and local communities fear that the Reko Diq project could repeat past patterns, where resource wealth enriches external stakeholders while leaving them with minimal economic benefits and negative externalities like environmental degradation.
While the financial benefits are undeniable, neglecting to address the underlying grievances in the province could exacerbate existing tensions. A resource project perceived as enriching outsiders without delivering tangible improvements for Baloch communities could reignite separatist movements.
Still, Saudi's involvement could be a winner, as it would unlock significant capital for project development, expediting the process at favorable times in the new commodity cycle. Furthermore, the cooperation would further strengthen Pakistani relations with Saudi Arabia — its important economic and military ally.
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Photo: Valley of Copper in Chagai district, Balochistan, Pakistan, Salik Javed via Shutterstock
