ISLAMABAD: After prolonged delays in securing financing from Beijing threatened to put a strain on a strategic mining project, the Asian Development Bank (ADB) has stepped in to fund upgrades to part of Pakistan’s railway system.
The ADB is in advanced talks to lead the financing of a $2 billion upgrade of a 500-km stretch of the railway line, which had previously been part of the Chinese project, two sources with direct knowledge of the discussions told Reuters.
The proposed rail upgrade would modernise the track and bridges from the commercial capital Karachi to Rohri, near Sukkur, so that trains can run faster.
In Rohri, the line will meet a branch coming from the area of the Reko Diq mine and will carry the copper concentrate to port.
The upgrade has become urgent, sources said, as it is needed to transport copper ore from the Reko Diq mine currently being developed by Canada’s Barrick Mining Corp.
Earlier this week, ADB announced $410 million in financing for the Reko Diq mine itself, and its president is due to visit Islamabad next week, they said.
Tim Cribb, Reko Diq’s project director, told Reuters that the government and Barrick would work together on securing financing for the upgrading of the branch coming from the west to Rohri.
The Reko Diq copper and gold mine is due to enter production in 2028 with anticipated annual output of some 200,000 metric tons of copper concentrate.
One of the world’s largest untapped copper deposits, it is Pakistan’s largest foreign investment in recent years.
“We will have a crisis. How will you evacuate output from Reko Diq? The exhausted line will come under even more pressure,” a senior government official said.
There was no immediate comment from Pakistan’s railways ministry or China’s foreign ministry.
The ADB would not confirm the finance package, which is being reported for the first time by Reuters. But it said Pakistan’s government and the regional lender “have regular discussions on railway sector development”.
“Any potential ADB assistance would be subject to comprehensive due diligence and consideration under ADB’s policies and procedures before any commitment is made,” it said.
