Saudi Arabia has held talks with Canada’s Barrick Gold about investing in its Reko Diq copper project in Pakistan, partly aiming to introduce a partner that has significant political influence in the cash-strapped South Asian economy, reported Bloomberg.
Saudi Arabia is looking for a stake in the global mining game with access to strategic minerals as the Kingdom looks to diversify its economy away from oil. The kingdom is ready to splash some big cash as the Canadian firm looks to ease funding constraints.
The report stated that Barrick Gold is in contact with KSA’s Public Investment Fund about a prospective interest in its Reko Diq copper mining project in Pakistan, which is a relatively unexplored area for the world mining industry. Bringing the Saudis on board would not only reduce Barrick’s funding concerns but would also add a partner with enormous political clout in Pakistan.
However, Saudi Arabia’s staggering pockets may pose some difficulties for other heavy-duty miners searching for similar deals worldwide.
For years, most international producers have been frequently outbid by Chinese corporations when it comes to purchasing mines. State-owned Chinese metal and mining behemoths offer rates that Western firms simply cannot match. Saudi Arabia now appears very likely to play the same game, outbidding and further diluting the industry’s usual players.
The recent ban on Chinese investment in precious metals corporations by the US and Canadian governments has transformed the investment environment for mining companies looking for financing. This has created an opportunity for Middle Eastern countries such as Saudi Arabia to fill the void, and Pakistan is one of several options for making an entry.
