Saudi Arabia’s Strategy Towards Pakistan’s Reko Diq Mine – OpEd
By Dr. Sahibzada Muhammad Usman
The recent Saudi decision to invest in Pakistan’s Reko Diq copper and gold mining project marks a landmark moment in relations between Pakistan and Saudi Arabia. This reaffirms Kingdom’s pledge to Pakistan’s economic development by helping to catalyse one of the highest Gross Foreign Investments of $540 million into Pakistan and strengthens the historical bond between both Kingdom of Saudi Arabia and Pakistan.
This two-phase investment illustrates that Saudi Arabia’s strategic vision includes diversifying its economic portfolio and securing key resources such as water for its growing industrial sector. The Reko Diq project, located in Balochistan province, which is famously rich in minerals, will cast a huge role in leading the mining industry of Pakistan, which will significantly contribute to the development of the region, employment and the economic status of the country.
Reko Diq is one of world’s largest untapped copper and gold deposits and offers significant prospects for economic transformation of Pakistan. The mine is estimated to contain 5.9 billion tonnes of ore grading at 2.2 grams per tonne with 41.5 million ounces of gold, which provides a great opportunity for the resource exploitation and revenue generation. Barrick Gold (50%) owns the shares with the other 50% divided among the Pakistani federal government (25%) and the Balochistan provincial government (25%). Through such a collaborative setup, economic benefits are shared proportionally with a decent amount of the revenue going towards improving the underprivileged but resource abundant zone of Balochistan.
This involvement in the Reko Diq project is in line with Saudi Arabia’s strategic move towards a vibrant global mining sector. The Kingdom has moved to secure important raw materials necessary for its industrial diversification efforts by establishing Manara Minerals, a mining investment entity. The move fits within Saudi Arabia’s overall Vision 2030 initiative to cut dependence on oil revenue and unleash related economic growth by spreading the economic base. For Saudi Arabia, investing in Reko Diq will see the country become a front running global mining player, also consolidating economic and political presence in Pakistan.
In addition to generating immediate financial returns, the Reko Diq project is expected to create thousands of jobs, therefore much needed employment to the local communities. Moreover, the project will also help skill development, technology transfer and improve regional infrastructure (roads, utilities) and that will encourage greater economic activity in Balochistan. This infrastructural development will aid connectivity to not only boost but also a conducive environment for more foreign investments.
To begin with, the revenue generated from the Reko Diq project is one of the most critical aspects of the project that can be placed towards the welfare and development projects of Balochistan. The project offers the province an opportunity to gain tremendously from the economic success of the project as the province has faced economic marginalization for a long time. The increased revenue will help the provincial government to invest in education, healthcare and public infrastructure, and as a result, the quality of the residents’ lives significantly improves. Furthermore, the project will emphasize environmental sustainability and CSR initiatives that will sustainably enhance the growth in an inclusive way that benefits both the generations currently living and yet to come.
Successful development of Reko Diq could make Balochistan a leading player in the international mining industry. With its abundant natural resources, the province can continue to draw on more inflows of foreign investments that can sustain the region’s economic stability and well-being. It would serve as an example for other resource rich regions in Pakistan that strategic investments and international hand holding can change the face of the region permanently.
The investment by Saudi Arabia in Reko Diq is a sign of the depth and evolution of Saudi Arabia’s partnership with Pakistan. Although there have been historically strong ties between the two countries economically, culturally and strategically, this investment cements that bond. This also symbolizes Saudi Arabia’s wider commitment to support the stable future of South Asia and the economic growth which is indispensable for the region’s long-term peace and security.
It is safe to say that Saudi Arabia’s investment in Reko Diq is a landmark move for Pakistan’s economy and a tremendous step in strengthening the relations between the two nations. This project will be able to generate enormous amount of revenue, create employment and transforming Balochistan’s economic landscape at large. In its progress, all stakeholders of the initiative would have to work closely together so that the work is transparent, sustainable and inclusive. The Reko Diq project is of much more than a mining origin, truly a symbol of economic opportunity to Pakistan and the people.
