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Rail link vital for Reko Diq copper-gold exports; $390m bridge financing secured under government guarantee.
BeNewz Report
The Economic Coordination Committee (ECC) of the Cabinet has directed the Ministry of Railways and the Finance Division to present a comprehensive execution and implementation plan for rail agreements related to the Reko Diq project, along with refinancing arrangements, by March 30, 2026. This directive follows the project’s designation as a ‘qualified investment’ under the Foreign Investment (Promotion and Protection) Act 2022, with railway access deemed critical for transporting copper-gold concentrate from Balochistan to international markets.
According to official sources, the Ministry of Railways briefed the ECC on the project’s significance, stating that the 1,350 km railway route is essential to ensure the commercial viability of the Reko Diq mine by enabling bulk transport of material to Port Qasim for export. Without this infrastructure, the project’s ability to deliver processed minerals to global buyers would face logistical and economic constraints.
The Reko Diq Mining Company (RDMC) had previously coordinated with the Ministry of Energy to explore potential railway connectivity. A preferred alignment was identified through Port Qasim, linking Main Line-III (ML-3) with Main Line-I (ML-I), following technical assessments by the consultancy firm Vecturis and consultations with the inter-ministerial working group.
To support this infrastructure upgrade, particularly along the Nokundi-Rohri section of ML-3, which is currently unfit for heavy freight, the ECC endorsed a bridge financing agreement of $390 million. This proposal, approved by the Prime Minister on August 8, 2025, was earlier recommended by a committee led by Economic Affairs Minister Ahad Khan Cheema. The agreement facilitates immediate construction and upgradation works, ensuring the route can handle the projected mineral load.
The funding will be provided jointly by RDMC and its parent Barrick Group, with the Government of Pakistan acting as guarantor. The financing tenure is three years at SOFR plus 250 basis points interest, with a bullet repayment of principal and accrued interest at maturity. As per protocol, the agreements were vetted by the Ministry of Law and Justice, cleared by the Office of the Attorney General, and received a no objection from the Ministry of Foreign Affairs.
However, the ECC noted a procedural lapse: the Rail Development Agreement had not yet been shared with the Finance Division. It instructed the Railways Division to provide the document for financial review and resubmit the case if any substantive changes are required. Furthermore, the ECC tasked the Finance Division with initiating early-stage planning in the last quarter of the ongoing fiscal year to streamline execution and financial oversight.
Project income is expected to be securitized to facilitate long-term refinancing through bond issuance. According to current understanding, 40% of refinancing will come from securitization of project revenues, while the remaining will be covered by direct government contributions. The entire Reko Diq railway development is expected to span a 37-year project lifecycle.
This directive marks a significant milestone in advancing the long-delayed Reko Diq project, which is among the world’s largest undeveloped copper-gold deposits. Located in Chagai district of Balochistan, Reko Diq is estimated to contain over 5.9 billion tonnes of ore with an average copper grade of 0.41% and gold grade of 0.22 g/ton. The project, jointly operated by Barrick Gold and the Government of Pakistan, is expected to produce 200,000 tonnes of copper and 250,000 ounces of gold annually at full capacity.
The renewed push for rail infrastructure follows decades of delays, legal disputes, and project suspension. The original agreement was annulled by the Supreme Court in 2013, leading to a prolonged arbitration battle which was settled in 2022, paving the way for renewed investment and development. The latest ECC decision underscores the government’s commitment to deliver on its infrastructure pledges and to facilitate one of Pakistan’s most strategically vital resource projects.
As the March 2026 deadline approaches, both the Ministry of Railways and Finance Division will be under pressure to finalize technical blueprints, legal frameworks, and financial mechanisms for ensuring uninterrupted progress on the railway component of the Reko Diq venture.
