Pakistan inks final deal for Reko Diq project

Pact with Barrick Gold comes after SC’s ‘favourable opinion’ and passage of required law

ISLAMABAD:

Pakistan on Thursday inked the final deal with representatives of Barrick Gold and Antofagasta PLC in London for the revival of the Reko Diq project and the settlement of an $11 billion dispute.

The development came after the government received a ‘favourable opinion' from the Supreme Court on the settlement agreement and the required legislation was passed into law.

The pact was signed by the federal and Balochistan governments with the two foreign mining companies.

One of the largest undeveloped copper-gold projects in the world, Reko Diq would be owned 50% by Barrick; 25% by three state-owned enterprises — the Oil and Gas Development Company Limited (OGCDL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL); 15% by Balochistan on a fully-funded basis and 10% by the province on a free-carried basis.

According to a statement, the development of Reko Diq into a world-class mine was among the largest foreign direct investments ever made in Pakistan.

“The project will bring growth and opportunity for the province of Balochistan and the nation as a whole for generations,” it read.

“In addition to the economic benefits it will deliver, the mine will also create jobs, promote the growth of a regional economy and invest in development programmes in Balochistan,” it added.

The statement further read that Balochistan’s interest in the mine would be fully funded, meaning that the province would reap the dividends, royalties and other benefits of its shareholding without having to contribute financially.

Also read: Reko Diq legislation bulldozed through parliament

“During peak construction, the project is expected to employ 7,500 people and once in production it will create around 4,000 long-term jobs. The employment of local communities has been prioritised,” it stated.

The statement maintained that Reko Diq’s ownership structure reflected a partnership between Pakistan, the province and a major international mining company benefitting all stakeholders.

“The negotiations commenced in 2015 with increasing commitment from 2019 onwards. The negotiation team was led by Additional Attorney General Ahmed Irfan Aslam and Brigadier Atif Rafique,” the statement concluded.

On Monday, the Foreign Investment (Promotion and Protection) Bill, 2022, flew through the parliament as the National Assembly and Senate gave their approval to it.

The legislation guaranteed protection for foreign investment in connection with the Reko Diq project.

As the sword of heavy financial penalties hanged on its head, the government moved with lightning speed and tried to solicit its allies’ nod but failed as the BNP-M and JUI-F opposed the bill in the lower house while PPP Senator Raza Rabbani and National Party’s Tahir Bizenjo raised their hands in objection to the law when presented in the upper house.

The ruling alliance, while apparently bulldozing the concerns raised by the allies, managed to put parliament’s rubber stamp on the bill on the grounds that the country could not afford to miss the December 15 deadline.