In an effort to attract investment, the federal government is consideringthe sale of its shares in the Reko Diq project to Saudi Arabia, as thekingdom has expressed interest in the copper-gold mining venture, accordingto officials familiar with the matter.
Under the revised agreement, the Canadian company Barrick Gold Corporationcurrently holds 50% of the project’s shares, while the Chilean companyAntofagasta withdrew from the project in exchange for $900 million,deposited by three governmental entities: the Oil and Gas DevelopmentCompany Limited (OGDCL), Pakistan Petroleum Limited (PPL), and GovernmentHoldings Private Limited (GHPL). These entities collectively possess a 25%share in the project, which is focused on extracting untapped copper-golddeposits in Reko Diq. The remaining 25% ownership belongs to Balochistan,with 15% being fully funded and 10% on a free-carried basis.
The newly formed Special Investment Facilitation Council (SIFC) hascommunicated with the federal entities, urging them to finalize thetransaction with Saudi companies in the coming months. Initially, there wasan instruction to complete this process by the end of December, but thedeadline was subsequently extended to the end of March next year. It hasbeen reported that PPL and OGDCL have shared this information with thePakistan Stock Exchange (PSX), as they are listed, while GHPL, which is notlisted with PSX, was not required to do so.
PPL’s disclosure reads, “We are pleased to disclose that the Board ofDirectors at its meeting held on September 28th, 2023, has decided toevaluate a potential engagement with sovereign foreign investors withrespect to the Reko Diq Project and has decided to appoint advisors throughits associated company M/s Pakistan Minerals (Private) Limited to assist inthis regard,” in compliance with the Securities Act, 2015, and PSXregulations.
The News contacted the Special Investment Facilitation Council (SIFC) forverification, and a well-placed official confirmed the development.Pakistan is interested in having the Saudi government invest in theexisting Reko Diq project rather than exploring a separate block, as itreduces risks associated with unexplored mining areas. The shares’ value iscurrently being assessed by a third party to facilitate negotiations.
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Barrick Gold is also interested in having Saudi partners in the project,but certain issues still need to be resolved. The negotiation involvesdetermining who will hold the majority of shares. Currently, Barrick Gold,the federal government, and provincial governments each hold 50% of theshares. If the federal government sells its shares, the balance would shiftin favor of the Canadian company. There are no plans to ask the provincialgovernment to sell its shares, as this would not be equitable forBalochistan.
Regarding the identity of the Saudi investors, the official explained thatthey have their own shareholding structure. Even if the company isprivately owned, the Saudi government will hold its shares. Although thefederal government is not eager to sell its shares, it hopes that thisdecision will attract further investment in other sectors. A third-partyassessment of the shares’ value is expected to be completed by thebeginning of December this year.
