The International Finance Corporation has committed an additional $400 million subordinated loan to Barrick Gold’s Reko Diq copper-gold project in Pakistan, bringing the World Bank Group’s total financing commitment to $700 million for what is expected to become one of the world’s largest copper mines. The loan, announced June 13, supports the project’s total estimated development cost of $6.6 billion, which is projected to generate over $74 billion in free cash flow during its 37-year operational life and contribute approximately 1% to Pakistan’s annual GDP once production begins in 2028.
Strategic Financing Structure Unlocks Massive Development
The $400 million subordinated loan follows the IFC’s initial $300 million commitment announced in April, demonstrating the World Bank Group’s confidence in the project despite regional geopolitical tensions. Subordinated debt, which ranks below senior obligations in repayment priority, plays a crucial role in large-scale mining projects by absorbing higher risk and enabling access to additional senior financing from commercial lenders.
The broader financing structure includes equity contributions from the project’s three shareholders—Barrick Gold (50%), the Government of Pakistan through three federal state-owned enterprises (25%), and the Government of Balochistan (25%). Additional debt financing is being arranged through a consortium of international lenders, including potential commitments from the U.S. Export-Import Bank ($500 million to $1 billion), the Asian Development Bank, Export Development Canada, and the Japan Bank for International Cooperation.
Phased Development to Maximize Resource Extraction
The project’s updated feasibility study, approved by shareholders in April, outlines a two-phase development approach designed to maximize the extraction of one of the world’s largest undeveloped copper-gold deposits. Phase 1, with an estimated capital cost of $5.5 billion, will establish processing capacity of 45 million tonnes per year, targeting annual production of 200,000 tonnes of copper starting in 2028.
Phase 2 will double production capacity. The mine is sufficient to sustain operations for at least 37 years with potential extensions through continued exploration.
Economic Impact and Strategic Importance for Pakistan
The Reko Diq project represents the largest Western investment in Pakistan’s history and is expected to transform the country’s economic landscape. Government officials project the mine will generate up to $2 billion annually in gross value added, equivalent to approximately 1% of Pakistan’s GDP. The project will provide crucial foreign exchange earnings, with 100% of revenues denominated in foreign currency—a significant benefit for a country facing persistent balance of payments challenges.
Beyond direct economic contributions, the project includes substantial commitments to local development. The mine will create 7,500 jobs during peak construction and 4,000 permanent positions, with 78% of current employees from Balochistan province. The project company has committed to investing 1% of construction costs and 0.4% of annual revenue in community development initiatives, totaling an estimated $90 million for Phase 1 and additional ongoing contributions throughout the operational period.
Copper Market Dynamics and Global Demand
Copper is experiencing unprecedented demand driven by the global energy transition, with electric vehicles requiring up to four times more copper than conventional vehicles and renewable energy infrastructure being significantly more copper-intensive than traditional power generation. The International Energy Agency projects global copper demand could double by 2040, creating substantial supply deficits that projects like Reko Diq are positioned to fill.
The mine’s strategic location in South Asia provides access to major consuming markets in China, India, and Southeast Asia, while its scale and grade make it one of the most economically attractive undeveloped copper projects globally. With copper prices trading above $9,000 per tonne in 2025 and long-term demand fundamentals remaining strong, the project’s economics continue to improve, supporting the substantial financing commitments from international lenders.
Company Background and Market Context
Barrick Gold Corporation, headquartered in Toronto, is one of the world’s largest gold mining companies with significant copper operations. The company has invested over $1 billion in the Reko Diq project since acquiring its interest and has positioned the mine as a cornerstone of its strategy to expand copper production in response to growing demand for energy transition metals.
The International Finance Corporation is the private sector investment arm of the World Bank Group, focusing on development finance in emerging markets. The Reko Diq investment represents the IFC’s first mining project in Pakistan and reflects the organization’s “doubling down” strategy on Pakistani infrastructure and natural resources under the leadership of Managing Director Makhtar Diop.
The project’s development has overcome significant historical challenges, including a decade-long legal dispute that was resolved in 2022 through a comprehensive settlement agreement that restructured ownership and established the current joint venture framework.
