ISLAMABAD: Energy Division along with Board of Investment (BoI) has been drafting terms and conditions to hire a financial advisor (FA) to carry out third-party assessment of the value of the federal government’s 25 percent shares in Reko Diq gold and copper mines for possible sale to Saudi Arabia’s Public Investment Fund (PIF), sources said.
At present, 50 percent of Reko Diq is owned by Barrick Gold Corp, 25 percent by three federal state-owned enterprises (OGDCL, PL, and GHPL), 15 percent by the Province of Balochistan on a fully funded basis and 10 percent by the Province of Balochistan on a free carried basis. Antofagasta of Chile exited the project after selling its stake in exchange for $900 million to three companies.
On August 7, 2023, Barrick CEO Mark Bristow acknowledged a strong relationship between Saudi Arabia and Pakistan but added that as Barrick has the controlling shares they have the right of first refusal. Bristow; however, stated that Barrick will support Saudi Arabia’s PIF purchase of 25 percent equity stake of the federal government.
Reko-Diq Project: PPL to evaluate potential engagement with sovereign foreign investors
In August, 2023, Special Investment Facilitation Council (SIFC) urged federal government entities, Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings (Private) Limited (GHPL), to conclude the transaction with Saudi companies by March 2024, sources said.
On September 28, 2023, PPL and OGDCL shared this information with the Pakistan Stock Exchange, while Government Holdings Private Limited (GHPL) was exempted from this requirement since it is not listed on the PSX.
PPL has publicly disclosed its intention to evaluate potential engagement with sovereign foreign investors for the Reko Diq Project through its associated company, M/s Pakistan Minerals (Private) Limited, in full compliance with regulatory requirements.
On December 21, 2022, Supreme Court (SC) declared the out-of-court settlement signed in March 2022 between the Pakistani Government and international firms - Barrick Gold and Antofagasta - to end a prolonged dispute with Pakistan and restart the Reko Diq mine development project.
The International Court of Arbitration levelled a $6.4 billion award against the government of Pakistan while the London Court of Arbitration imposed another $4 billion fine.
Barrick and the three Pakistani companies are already engaged with Saudi companies in various energy sector projects. Barrick and Saudi state-owned mining company Ma’aden jointly operate a copper project in Jeddah. In July 2023, four Pakistani state-owned petroleum companies -OGDCL, PSO, PPL, and GHPL- signed a MoU with Saudi Arabia to construct Pakistan’s largest oil refinery at Gwadar port, with an estimated investment of $10 billion.
Copyright Business Recorder, 2023