OGDCL and PPL will have 8.3% state in Reko Diq after agreement with Barrick Gold
Both Companies filing to PSX informed the shareholders that the BoD have decided to invest in the Rekio Diq along with Government Holdings
OGDCL and PPL both in a filing to Pakistan Stock Exchange informed the shareholders that the Board of Directors has decided to invest in the Reko Diq along with Government Holdings.
Through the Framework Agreement, PPL has, in principle, agreed to participate in 8.33% equity (which may be held through onshore or offshore holding companies) along with OGDCL and GHPL, in aggregate amounting to 25% of the equity in the Project divided equally amongst the Company, OGDCL, and GHPL (the “State-Owned Entities”). 50% of the equity will be held by Barrick who shall also have management and operator rights.
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The remaining 25% of the equity will be held by the Government of Balochistan directly and/or through any of its owned entities, out of which 10% shall be free carry of the Government of Balochistan.
OGDCL and PPL to pay fees amounting to $187.5 million each in Reko Diq Project.
In a significant development, the Government of Pakistan on Sunday awarded the development contract of the Reko Diq project to a Canadian company while its penalty of $11 billion, imposed on Pakistan by the World Bank tribunal, has been waived. The company is expected to invest multi-billion dollars in one of the world’s largest gold and copper deposits holder mines in Balochistan province.
In developing the project, nearly USD 10 billion shall be invested in Balochistan, including USD 1 billion that shall be invested in social uplift projects such as roads, schools, hospitals, and the creation of technical training institutes for mining.
The investment shall create over 8,000 new jobs. This project shall make Balochistan the largest recipient of foreign direct investment in Pakistan and the Reko Diq project shall be one of the largest copper and gold mining projects in the world. To ensure optimal utilization of the nation’s mineral wealth, the government is also considering setting up a smelter.
Reko Diq is one of the largest undeveloped copper and gold deposits globally, capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century.
