IFC to provide $400m loan for Pakistan's copper/gold Reko Diq mine
ISLAMABAD - The International Finance Corporation (IFC) will provide a $400-million subordinated loan for Pakistan’s Reko Diq copper/gold mine, according to an IFC disclosure on Friday.
The loan adds to a $300-million commitment announced in April, bringing IFC’s total financing for the project to $700-million. The estimated cost of the mine is $6.6-billion, to be funded through a mix of debt and equity from a consortium of lenders.
“The estimated total Project cost is $6.6bn, and it will be financed using a combination of debt and equity,” the disclosure said, adding that other parallel lenders will provide the remaining debt financing.
This type of loan, known as subordinated debt, is typically repaid after other senior loans and helps absorb more risk, making it easier for other lenders to invest.
Other financiers, including the US EXIM Bank, Asian Development Bank, Export Development Canada, and Japan’s JBIC, are also expected to join the financing package, project director Tim Cribb told Reuters in April. Term sheets are expected to close by early in the third quarter.
IFC chief Makhtar Diop said earlier this year that the institution was “doubling down” on Pakistan, with a focus on infrastructure, energy and natural resources.
Reko Diq, located in Balochistan, is one of the world’s largest undeveloped copper-gold deposits. It is being developed by Barrick Gold, which holds 50%, with the remainder split between Pakistan’s federal and provincial governments.
Production is expected to begin in 2028. Barrick has projected the mine will generate up to $74-billion in free cash flow over its estimated 37-year life.
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