Egyptian billionaire seeks stake in Pakistan mine

Egyptian telecoms billionaire Naguib Sawiris is eyeing an investment in the Reko Diq copper-gold mining project in Pakistan, according to Bloomberg. Located in the Balochistan province, bordering Iran and Afghanistan, the mine is one of the world's largest undeveloped copper-gold assets. Production is slated to begin in 2028.

Barrick Gold of Canada, owns a 50% stake in the Reko Diq project. An additional 25% is held by three Pakistani state-owned enterprises, while the Province of Balochistan retains the remaining 25%.

During a recent interview in Islamabad, Sawiris expressed interest in investing in the project and noted that his familiarity with the country gives him an edge over other investors. Under his helm Orascom telecom acquired Pakistani mobile operator Mobilink, which later merged with Warid Pakistan to become a new entity called Jazz. His property arm Ora Developers has also invested in the Eighteen luxury residential estate located southwest of Islamabad.

Through their investment company, La Mancha, the Sawiris family holds significant stakes in the extractive industry. This includes an 18% stake in West African gold miner Endeavour, a 25% share in the Brazil-focused gold development company G-Mining Ventures, and a 24% interest in SRG Mining, which is dedicated to developing the Lola graphite project in Guinea.

Barrick CEO Mark Bristow, who was born in South Africa, previously stated that the company would not dilute its equity in the project. However, he hinted at being receptive to the idea of the Pakistani government selling its stake to an outside investor. Last month, Pakistan's state-owned entities with interests in the project mentioned exploring "potential engagement" with overseas investors, though specifics weren't provided.

Naguib Sawiris, one of three sons of the renowned Egyptian businessman Onsi Sawiris, was instrumental in the growth of the Orascom group, which started as a construction company founded by his father. He joined the family business in 1979. The company has since grown into one of Egypt's major conglomerates and has become the country's largest private sector employer. Sawiris had a hand in the development of Orascom's railway, information technology, and telecommunications divisions. The 2010s saw Naguib Sawiris amass billions from divesting a significant portion of his telecom assets. In 2018, Sawiris disclosed that he had allocated half of his then US$5.7bn net worth to gold, in anticipation of a stock market crash. 

It is rare for African firms to invest in Pakistan. If Sawiris eventually does make the investment then it would be something of a milestone for the beleaguered South Asian republic, whose economy has been badly hit by political instability, inflation and debt. According to official data, Pakistan attracted only US$2.6bn in foreign direct investments in 2022. This was a drop of 29% compared to the previous year, largely attributed to a slowdown in projects related to the China-Pakistan Economic Corridor. China, which invested US$532.6m in Pakistan remains the top investor followed by US with US$249.6m. The primary sectors benefiting from these investments were energy (US$737m), financial services (US$405m), and oil and gas (US$195m).

 

References

‘Egypt's OT buys remaining stake in Pakistan operator’, Reuters, 13 July 2007

‘This billionaire has put half his net worth into gold’, The Economic Times, 01 May 2018

‘Barrick targets 2028 for first production from Reko Diq’, Barrick Gold Corporation, 16 January 2023

‘Barrick open to Saudi wealth fund buying stake in Pakistan's Reko Diq project’, Reuters, 08 August 2023

‘Gold billionaire Sawiris eyes stake in $7 billion Reko Diq mine’, Bloomberg, 16 October 2023

‘Naguib Sawiris’, Wikipedia, Accessed 25 October 2023

‘Eighteen’, Ora Developers, Accessed 25 October 2023

‘Foreign direct investment (FDI) in Pakistan’, Lloyds Bank, Accessed 25 October 2023

‘Mobilink’, Wikipedia, Accessed 25 October 2023

‘Portfolio’, La Macha Resource Capital, Accessed 25 October 2023