Pakistan Petroleum Limited (PPL), one of the country’s largest E&P companies, and the Government of Balochistan (GoB) have expanded their existing mining partnership by signing an amendment to their 2004 operating agreement for the Barytes Project.
The listed company shared the development in its notice to the Pakistan Stock Exchange (PSX) on Thursday.
“We are pleased to announce that Pakistan Petroleum Limited (PPL) has executed Amendment No. 1 to the operating agreement dated 15 November 2004 for Barytes Project with the Government of Balochistan (GoB), under a joint venture arrangement for the Baryte, Lead, and Zinc Project (BLZ Project) between the parties.
“As a result of this amendment, the area under Mining Lease No. 16 executed on 6th December 2021 in Khuzdar district for lead and zinc, stands incorporated into the existing operating agreement, in addition to the existing area for Barytes in Gunga, Khuzdar district,” read the notice.
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PPL informed that through its mining arm viz., BME, it will be the operator of the BLZ Project, and in line with the terms of the operating agreement, preference will be given to local residents for employment opportunities.
BME is a joint venture between GoB and PPL with each sharing a 50% working interest agreement signed on June 1, 1974, between the two for 30 years to mine, grind and market baryte deposit in Gunga near Khuzdar and other minerals in Balochistan.
“Both PPL and GoB will contribute funds in proportion to their respective equity shares in the BLZ Project,” it said, adding that the company shall arrange funding, from its cashflows, for GoB’s capital contribution through a financing arrangement.
Previously, a bankable international standard feasibility study was completed in 2019 by M/s DMT, Germany, and the BLZ Project is currently in the development phase.
According to PPL, the project is expected to generate an average annual revenue of $144 million with an NPV of $356 million over an expected mine life of 32 years for the joint venture.
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