Islamabad December 11 2022: ECC allowed Finance Division to direct GHPL (for its own as well as GoB’s share), OGDCL and PPL to deposit the aggregate amount of interest in escrow account and investment of USD 717 million by Government of Pakistan in respect of Balochistan government capital commitment.
On Friday, the Supreme Court (SC) of Pakistan declared an agreement signed between the federal and Balochistan governments and two international firms — Antofagasta PLC and Barrick Gold Corporation — in March for the revival of the long-stalled Reko Diq mining project as legal.
Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar presided over the meeting of the Economic Coordination Committee (ECC) of the Cabinet, virtually through Zoom, today.
The ECC considered and approved two important agenda items related to Reko Diq project, thus paving the way for early start of the Reko Diq Project. Ministry of Energy (Petroleum Division) submitted a summary on accrued interest with respect to the amount held in an escrow account in connection with the Reko Diq Project dispute settlement.
It was presented that government of Pakistan (GoP) and Provincial Government of Baluchistan (GoB) entered into an out-of-court dispute settlement with M/s Tethyan Copper Company Pvt Limited- a consortium of Barrick Gold Corporation of Canada and M/s Antofagasta PLC of Chile, in respect of Reko Diq Copper-Gold Project in Chaghai district of Baluchistan. As per settlement terms, Government of Pakistan has to clear liabilities to Antofagasta PLC.
In the light of the terms of agreed settlement, the ECC allowed Finance Division to direct GHPL (for its own as well as GoB’s share), OGDCL and PPL to deposit the aggregate amount of interest to the sum of US$ 22,718,173/- in the escrow account from March 31, 2022 to December 15, 2022.
The ECC further allowed Finance Division to arrange the interest payable for GoB’s share amounting to US$ 8,519,314 /- from the loan of Rs. 65 billion already raised by the GHPL with the GoP guarantee. Further, the ECC allowed the concerned Divisions of GoP and the SOEs to act in such a manner to ensure that the deposited amount alongwith interest deposited by the SOEs in the escrow account to form part of the consideration for share purchase of Reko Diq Mining Company Limited. The ECC also considered and approved a proposal of Finance Division through a summary on funding plan of Government of Pakistan for share of Government of Baluchistan in Reko Diq Project. As per proposal, overall funding commitment of US$ 717 million over the period of 6 years by GoP in respect of GoB SPV Project Capital Commitment to be provided by the Government of Pakistan.
Federal Minister for Power Mr. Khurram Dastgir Khan, Federal Minister for Commerce Syed Naveed Qamar, Minister of State for Petroleum Mr. Musadik Masood Malik, Minister of State for Finance and Revenue Dr. Ayesha Ghous Pasha, SAPM on Finance Mr. Tariq Bajwa, SAPM on Revenue Mr. Tariq Mehmood Pasha, Federal Secretaries, Chairman FBR and other senior officers attended the meeting.
Earlier in March, an agreement in principle reached between the government of Pakistan, the provincial government of Balochistan and Barrick in 2022 provides for the reconstitution and restart of the project, which has been on hold since 2011. It will be operated by Barrick and owned 50% by Barrick, 25% by the Balochistan Provincial Government and 25% by Pakistani state-owned enterprises.
The definitive agreements underlying the framework agreement are currently being finalized by teams from Barrick and Pakistan. Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process expected to take two years. Construction of the first phase will follow that with first production of copper and gold expected in 2027/2028.