ECC approves $7.7bn financing, $390m rail deal for Reko Diq project

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved definitive agreements and financial arrangements for the $7.723 billion first phase of the Reko Diq copper-gold project, along with a $390 million bridge financing agreement to support construction of a 1,350-kilometre railway link from Balochistan to Port Qasim.

Chaired by Finance Minister Senator Muhammad Aurangzeb, the ECC approved agreements between state-owned enterprises, the Balochistan government, and lenders to operationalise the project. The financing plan includes a revised debt structure of $3.5 billion, up from $3 billion, and adjusted equity contributions based on final project costs.

Also read: ADB to back Reko Diq mine with $410 million financing package

Of the total cost, 35 per cent will be incurred in rupee terms, with Pakistan Minerals Pvt Ltd (PMPL) and Balochistan Mineral Resources Ltd (BMRL) required to contribute $2.145 billion and $1.287 billion respectively. These amounts drop to $1.173 billion and $704 million after project debt financing. The ECC permitted state-owned enterprises to repatriate funds through PMPL over seven years to meet equity or loan commitments.

The committee authorised the petroleum and finance secretaries to finalise and sign agreements on behalf of the government. Any material changes during execution must be resubmitted to the ECC for approval.

Phase-I is scheduled to begin production by the end of 2028. The mine is expected to operate for 37 years, generating an estimated $90 billion in operating cash flows, with $53 billion projected to remain in Pakistan through fiscal revenues, equity inflows, and other returns to federal and provincial stakeholders.

The ECC also approved a rail development and bridge financing arrangement with the Reko Diq Mining Company (RDMC), under which the government will provide a $390 million loan. The funding supports construction of a 1,350km rail line connecting the mine to Port Qasim, classified as a qualified investment under the Foreign Investment (Promotion and Protection) Act 2022.

The Ministry of Railways has been directed to share final agreements with the Finance Division for appraisal and to report on progress by March 2026. The chosen route connects ML-I and ML-III via Port Qasim, with urgent upgrades required on the Nokundi–Rohri section.

Also read: PM reviews Railways upgrade, Reko Diq link plan

The approvals were supported by the ministries of finance, petroleum, railways, law, and foreign affairs, and were preceded by a green light from the Prime Minister following Economic Affairs Division (EAD) recommendations.

The meeting was also attended by the federal ministers and secretaries from relevant ministries and regulatory bodies.