Bilateral sources line up to extend loans totalling USD 4.5 billion to Pakistan for the Reko Diq mining operation. Business owners surrounding the mining facility prepare to celebrate as the influx of funds will serve to promote business activity in the region.
The greatest potential lender is the EXIM (Export-Import) Bank of the United States, which is interested in lending USD 1.5 billion to the Reko Diq mining operation.
Other lenders like the World Bank, Asian Development Bank and bilateral sources like Canada, Japan, and Germany, among many others also expressed their interest in the project by offering to pitch in the combined value of three billion dollars in loans.
The inflow of foreign investments and loans is bound to improve the transportation infrastructure of the area around the extraction site – primarily roads. Saudi Arabia has already offered to invest USD 150 million in infrastructure as part of the Saudi investment package into Reko Diq, which has still not been accepted by Pakistan.
The new roads that will get paved for transporting gold and copper out of the mines will also be used by local businesses to move goods from warehouses to stores. Travel times and costs will witness a drop, helping businesses in the area improve their supply chain.
This will also make the area around Reko Diq more accessible to tourists and travellers, which will rake in more traffic. With the increase in visitors, local shops, restaurants, rest stops, and other businesses will have the chance to attract more customers.
Moreover, foreign investments will bring foreign workers to the mining zone who will need housing, food, and other services. New businesses could spring up to meet these needs, which will likely create jobs and reduce the current unemployment rate of 9.13 per cent, which is second only to Kashmir.
The Government of Balochistan owns a 25 per cent stake in the mining operation. If the loans flow in, Balochistan’s economy will likely see an improvement along with the businesses that call it home.
