Saudi Arabia is likely to invest up to $1 billion in the Reko Diq Copper-Gold Project located in the Chaghi district of Pakistan’s Balochistan province.
According to finance ministry sources, the shares of Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) will be sold to the Kingdom.
Saudi Arabia is expected to invest in the project next month.
The sources said Prime Minister Shehbaz Sharif would form a finance ministry committee for the Kingdom’s investment in the project.
The committee will include OGDCL, PPL and energy ministry officials.
The sources continued that the finance and energy ministries would send a summary to the premier for the formation of the committee.
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After the formation of the committee, its members will leave for Saudi Arabia for the final discussion on its investment.
Later, Pakistan and Saudi Arabia will sign an agreement for the latter’s investment in the Reko Diq Project.
Previous governments have also been claiming that this mining project is a game-changer and that Balochistan can receive 33% financial benefits from it.
In August last year, Barrick Gold, which owns a 50% stake in the project with the remaining 50% owned by the governments of Pakistan and the province of Balochistan, said it was open to bringing in Saudi Arabia’s Public Investment Fund (PIF) as one of its partners in the mine.
Earlier in the month, the military-dominated Special Investment Facilitation Council (SIFC) had approved the hiring of consultants to reduce the shareholdings of Pakistan and Barrick Gold equally in favour of Saudi Arabia in the Reko Diq Project.
However, its CEO Mark Bristow made it clear that Barrick would not dilute its equity in the project.
He added that Barrick would support PIF coming into the mine through the Pakistani federal government’s 25% equity stake.
In the year 2022, Barrick Gold ended a long-running dispute with Pakistan in an out-of-court agreement and agreed to restart development
Under the deal, the company withdrew its case in an international arbitration court, which had slapped a penalty of $11 billion on Pakistan for suspending the contracts of the firm and its partners in 2011.
The company’s licence to mine the untapped deposits was cancelled after the Supreme Court ruled illegal the award granted to it and its partner, Chile’s Antofagasta.
Antofagasta had agreed to exit the project, saying its growth strategy was focused on production of copper and by-products in the Americas.
“The new project company shall be owned 50% by Barrick Gold. The remaining 50% shareholding shall be owned by Pakistan, divided equally between the federal government and the provincial government of Balochistan,” a statement from the office of Prime Minister’s Office read after the signing ceremony in Islamabad.
(With input from agencies)
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