Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) have revised their funding commitments for Phase 1 of the Reko Diq copper and gold project. Each company’s pro-rata share now stands at $715 million, subject to adjustment for actual financing costs and inflation.
After accounting for project-level financing, the expected shareholder contributions of both PPL and OGDCL amount to $391 million each, the E&Ps disclosed the development in their respective notices to the Pakistan Stock Exchange (PSX) on Tuesday.
OGDCL holds an 8.33% stake in the Reko Diq copper and gold project, when aggregated with the 8.33% stakes held by each of PPL and Government Holdings (Private) Limited, comprises a collective 25% interest in the project that is owned by the three Pakistani State-Owned Enterprises (SOEs).
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The SOEs’ interest in the project company, i.e., Reko Diq Mining Company (Private) Limited (RDMC), is held indirectly via Pakistan Minerals (Private) Limited.
25% of the shares in RDMC are held by the Government of Balochistan (15% on a fully funded basis, which is held indirectly through Balochistan Mineral Resources Limited, and 10% on a free carried basis, which is held directly by the Government of Balochistan).
The remaining 50% of the shares in RDMC are held (indirectly) by Barrick Mining Corporation (formerly Barrick Gold Corporation), which is the operator of the project.
Initially, in March 2025, the boards of both OGDCL and PPL approved a pro-rata funding commitment of $627 million each, with shareholder contributions of around $349 million apiece. However, after negotiations with lenders and input from an independent technical consultant, project estimates were revised.
“Since the aforementioned approval, the negotiations with the lenders of the project financing have considerably advanced,” the company said.
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“Furthermore, the Phase 1 development cost of the project has been revised, mainly on account of conservatism built in on the recommendation of the independent technical consultant of the lenders with respect to the delay in commencement of production by six months to 2029 compared with the earlier plan of 2028 and other cost contingencies.
“Additionally, financing costs have been increased due to a revision in pricing and the rise in the level of project financing to $3.5 billion from the previous estimate of $3 billion,” it added.
Despite these revisions, the project remains economically viable.
As part of the financing arrangements, the boards of both companies also approved execution of the SOE Completion Agreement — under which the SOEs will provide a joint and several guarantee for 27.78% of RDMC’s secured debt obligations until financial completion — as well as the Transfer Restrictions Agreement, which imposes minimum shareholding requirements for project sponsors until project debt has been fully repaid.
The commitments remain subject to shareholders’ and regulatory approvals
Reko Diq is expected to become a world-class copper-gold mine, contributing to Pakistan’s economic development.
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