Hong Kong May 6 2022: If the conditions of the Reko Diq Project dispute settlement are not satisfied latest by the December 15, 2022, the terms of settlement/resolution will be cancelled and terminated and the entry fee along with Interest Amount will be refunded to the respective Government of Pakistan.
On March 17 2022, the Government of Pakistan (GoP) through the Federal Cabinet, ratified the decision of the Economic Coordination Committee (ECC) which approved inter alia issuance of directions to the Oil and Gas Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings (Private) Limited (GHPL), collectively the SOEs, to participate in reconstitution of a joint mining project at Reko Diq.
As part of the settlement arrangement, Barrick Gold Corporation (Barrick) will be retaining 50% shareholding in Tefthyan Copper Company Pakistan (Pvt) Limited (TCCP) along with the operatorship, whereas the other shareholder, Antofagasta PLC will exit TCCP upon receipt of USD 900 million and subject to other conditions precedent. Pursuant to the Decision and subsequent correspondence with the Finance Division, each SOE was also directed to pay into an escrow account an amount of USD 187.5 million (collectively USD 562.5 million) as entry fee would be utilized towards acquisition of 8.33% interest of each SOE in TCCP. The entry fee attributable to the Government of Balochistan (GoB) would be funded by the GoP amounting to USD 337.5 million.
If the conditions are not satisfied by June 30, 2022, interest rate at the rate of US Prime plus 2% would be payable to Antofagasta. If the conditions are not satisfied latest by the December 15, 2022, the terms of settlement/resolution will be cancelled and terminated and the entry fee along with Interest Amount will be refunded to the respective SOE/GoP. Only upon satisfaction of the stated conditions in the Framework Agreement, the entry fee along with the interest Amount. If any, will be released to Antofagasta against acquisition of corresponding equity interest by the SOEs and GoB, thereby setting the historical dispute relating to Reko Diq Project.
Subsequent to the decision and directives of the finance Division dated March 29, 2022, SOEs have deposited their respective share in an escrow account maintained by the Hong Kong Shanghai Banking Corporation, and jointly operated by the GoP and Antofagasta.