Key points
- Pakistan’s OGDCL approves $627m funding for Reko Diq project
- Reko Diq is one of the world’s largest underdeveloped copper-gold mine
- ECC of the cabinet also approved changes to the Reko-Diq Project’s development plan
ISLAMABAD: Pakistan’s Oil and Gas Development Company Ltd (OGDCL) and Pakistan Petroleum Ltd (PPL) have approved to increase their investments in the Reko Diq gold and copper mining project to $1.25 billion, local media reported.
According to Startup Pakistan, the project, jointly owned by Barrick Gold and Pakistan, has a mining life of 37 years and is expected to produce 13.1 million tons of copper and 17.9 million ounces of gold.
OGDCL, one of Pakistan’s largest exploration and production firms, has approved a significant increase in its funding commitment for the Reko Diq project, raising it to $627 million, local media reported.
According to The Express Tribune, the announcement was made in a notice to the Pakistan Stock Exchange (PSX).
“The Board of Directors of the company has approved an increase in the company’s funding commitment with respect to the project, reflecting its pro rata share of total capital investment, inclusive of project financing costs, to $627 million (to be adjusted for actual project financing costs and inflation),” The Express Tribune cited the notice as saying.
Firm’s funding commitment to $627m
Dawn news also reported that the OGDCL’s board of directors has approved an increase in the firm’s funding commitment to $627m, inclusive of project financing costs, reflecting its proportional share of total capital investment.
Local media reported that the decision follows an updated feasibility study, which outlines a 37-year mine life split into two phases. Phase 1 is estimated to require a total capital investment of $5.6 billion, excluding financing costs and inflation. The capital for this phase is planned to be secured through a limited-recourse project financing facility of up to $3 billion, with the remaining amount covered by shareholder contributions, The Express Tribune reported.
17.9 million ounces of gold
“Based on existing reserves, the Reko Diq project is expected to yield production of 13.1 million tonnes of copper and 17.9 million ounces of gold over the life of the mine (100 per cent basis),” local media cited the OGDCL as saying.
Earlier, Pakistan’s state-run news agency, the APP reported that the Economic Coordination Committee (ECC) of the cabinet on Tuesday approved changes to the Reko-Diq Project’s development plan and related financial commitments and project finance considerations.
According to press release issued by finance division, the ECC meeting was virtually chaired from China by Finance Minister Muhammad Aurangzeb.
According Petroleum Division had submitted a summary regarding the Reko-Diq Project and changes in its overall development plan and related financial commitments and project finance considerations due to inflation and enhanced scope of the project concerning capacity, energy mix, alternative water supply options and updated processing plants and machinery.
The ECC noted the factors leading to the project escalations, and approved the proposals contained in the summary with the directions to the Ministries of Petroleum & Finance to continue close coordination with a view to ensuring timely implementation of all agreed actions.
The ECC assured full support for the Reko-Diq Project, calling it a project of immense national importance, the press release said.
Reko Diq, one of the world’s largest underdeveloped copper-gold mine and is located in Pakistan’s province of Balochistan.
