ISLAMABAD: Saudi Arabia has offered to buy a 15 percent stake in Recodec mining project in Pakistan.
Saudi Arabia will also give a substantial grant for the construction of infrastructure around the mining area. This will be the first investment project under the Special Investment Facilitation Council (SIFC). The offer includes a grant to buy 15 percent stake and build infrastructure.
Government officials involved in these discussions told The Express Tribune that in response to this offer, Pakistan has decided to form a negotiation committee that will review the Saudi offer and recommend the final price to the federal cabinet after negotiations. Will send for approval.
Saudi Arabia’s Public Investment Fund (PIF) has offered to buy a 15 percent stake in Manara Minerals. At present, the federal government holds 25 percent of the shares in the Rekodec Mining Project. The government will sell 15 percent of its shares to Saudi Arabia.
SIFC Divisional Secretary Jameel Qureshi could not be reached for comment despite contacts. An official of the Petroleum Division said that if the deal is concluded, it will strengthen economic ties between Pakistan and Saudi Arabia and provide employment opportunities for people in the region.
It should be noted that Pakistan is also working to roll over the $5 billion Saudi cash deposit. Similarly, Pakistan has also requested 1.2 billion dollars from Saudi Arabia for the new oil financing facility.
Talking about infrastructure, an official of the ministry told The Express Tribune that the federal government wants to construct the Mashakhel Panjoor Road to facilitate transportation.
The Ministry of Economic Affairs has negotiated a grant from the Saudi Fund for Development (SFD) to finalize the road scheme. The parties will finalize the feasibility of this road project if there is progress in the talks.
A cabinet member said on condition of anonymity that the SIFC has approved the structure of the Saudi offer, but a final decision by the Cabinet Committee on Inter-Governmental Transactions (CCIGT) is yet to come.
The Cabinet Committee will now approve the Negotiating Committee. The committee will finalize the deal after negotiating with Manara Minerals. Barrick Gold owns 50 percent of the Rekodic project. 25 percent belongs to the federal government and the remaining 25 percent belongs to Balochistan.
Barrack Gold is currently updating the feasibility studies for the project which will be completed by December 2024. First production of the project is expected by 2028.
The Recodec project is a major investment project. Once it begins commercial operations, the government hopes to build adjacent buildings with investment from Recodec, Saudi Arabia, the Balochistan government and the federal government.
Pakistan wants $5 billion investment from Saudi Arabia in mining and agriculture sectors by June 2025. Army Chief General Asim Munir is also taking personal interest to ensure timely Saudi investment.
Pakistan has already addressed Saudi Arabia’s concerns about external sector liquidity constraints preventing repatriation of profits. Pakistan has assured Saudi Arabia that Saudi investors will be prioritized in return of profits.
Prime Minister Shehbaz Sharif has also issued instructions to the State Bank to give priority to Saudi Arabian companies in terms of return of profits.
The US Export-Import (EXIM) Bank has also expressed its interest in the Recodec project. However, EXIM Bank and the US Government’s Independent Export Credit Agency were seeking preferential creditor status. The cost of the Recodec project has been estimated at $6.5 billion. The project needs three to three and a half billion dollars in debt financing. Exim Bank is ready to give a loan of one and a half to two billion dollars.
