Recently, the Economic Coordination Committee (ECC) of the Pakistani government, chaired by Finance Minister Mohammad Aurangzeb, approved a transitional loan of $390 million for the construction of a 1350 kilometer long freight line. The route aims to transport concentrate from mines in the Balochistan region of western Pakistan to Port Qasim in the southern Arabian Sea for export.

According to the local news agency Dawn Daily, this agreement was classified as a "qualified investment" under the 2022 Foreign Investment (Promotion and Protection) Act and signed with RDMC Mining Company. On the same day, RDMC also obtained a financing agreement for the first phase of the Reko Diq copper gold project worth $7.72 billion. The project is expected to be put into operation in 2028 and will become the largest mining project in Pakistan at that time. The new freight route is considered crucial to the commercial feasibility of the project, and the government has therefore agreed to provide a transitional loan for a period of three years, with a guaranteed overnight financing rate plus 250 basis points and a one-time repayment upon maturity.

This freight route to Port Qasim will utilize the existing ML-1 and ML-3 mainlines. However, the Nogunda Rory section of ML-3 needs to be urgently upgraded due to an expected increase in freight volume. The Ministry of Railways has received instructions to evaluate potential financing agreements for this project and report to ECC before March 2026.

It is worth mentioning that the agreement on the new ore line loan was reached just a few days after Pakistan and China finalized the funding for the $7 billion ML-1 major upgrade project on September 14th. The ML-1 upgrade covers track widening and structural updates for 1726 kilometers of railway. Originally, China was expected to provide full funding for the project, but later refused to bear the full amount, so a new financing consortium emerged. The consortium is provided with a loan of 2 billion euros by the Asian Development Bank (ADB), with joint participation from the Asian Infrastructure Investment Bank (AIIB) and Chinese financial institutions. Keywords: International News and Information, International News Network

The promotion of a series of railway projects in Pakistan not only helps to improve the transportation efficiency of domestic mineral products and promote mining exports, but also promotes the upgrading and transformation of domestic railway infrastructure, strengthens regional connectivity, and injects new vitality into Pakistan's economic development.Editor/Cheng Liting