OGDC, PPL to have 8.3pc stake each in Reko Diq project
Business
OGDC and PPL will pay fee amounting to $187.5 million each in Reko Diq Project.
ISLAMABAD (Web Desk) - Oil and Gas Development Company and Pakistan Petroleum Limited will have 8.3 percent each stake in Reko Diq project following a resolution reached where Canadian company Barrick Gold will buy 50 percent shares in the company.
OGDC and PPL both in filing to Pakistan Stock Exchange (PSX) informed the shareholders that the Board of Directors have decided to invest in the Reko Diq along with Government Holdings.
According to details, 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 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.
Remaining 25% of the equity will be held by the Government of Balochistan directly and/or through any of its owned entity, out of which 10% shall be free carry of the Government of Balochistan.
OGDC and PPL will pay fee 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 creation of technical training institute 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 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.
