Saudi Arabia has shown interest in acquiring government stakes in Pakistan’s Reko Diq gold and copper mine, a Pakistani official said on Tuesday, in what would be a major deal for the crisis-ridden $350 billion South Asian economy.
Barrick Gold Corp (ABX.TO), which owns a 50% stake in the mine, considers the mine one of the world’s largest underdeveloped copper-gold areas.
Pakistan narrowly averted sovereign default earlier this year after a last-gasp $3 billion bailout from the International Monetary Fund, but the deal rests on bringing in foreign direct investment to shore up critically low foreign exchange reserves.
Islamabad has appointed an international adviser to do an valuation of its stake in the mine and expects this to be completed before Dec. 25, after which talks will begin with Riyadh, Jahanzeb Khan, the prime minister’s adviser special investments, told journalists.
Alongside Barrick Gold the remaining 50% of the mine is held by the governments of Pakistan and the province of Balochistan.
Khan did not identify the adviser but media outlet Arab News reported that United Arab Emirates-based consulting firm RB&A Partners has been hired. The firm declined comment in an emailed response to a Reuters query.
Khan said that Pakistan was keen on having Saudi Arabia on board, but stressed that Islamabad was “not in a rush” and did not want to have “distress sales” for any of its assets and would protect its national interests.
He said Pakistan set up its Special Investment Facilitation Council (SIFC) in June to help make investing faster and easier and with a focus on sectors including agriculture, mining and information technology.
Khan said even the IMF had inquired about the SIFC’s powers but that the body would ensure transparency in all transactions.
Regarding the inclusion of Pakistan’s army chief in the SIFC Khan said the military was key to ensure physical security for investors Reko Diq is located in the restive southwestern province of Balochistan which is in the grip of multiple insurgencies.
Pakistan has previously said Barrick would invest $10 billion in the project. Barrick in August said it was open to bringing in Saudi Arabia as one of its partners in the mine.
The Saudi Arabian government did not immediately respond to a request for comment.
Khan said Saudi Arabia and other traditional Middle Eastern allies could potentially line up around $70 billion in investments in various sectors.
