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Pakistan expecting to reach ‘Reko Diq deal’ with Saudi Arabia by December: PM Kakar

Caretaker Prime Minister Anwaar-ul-Haq Kakar speaks during an interview with Arab News Pakistan in Islamabad on November 6, 2023. — Arab News
  • Negotiations underway to sell shares in Reko Diq: PM Kakar.
  • “We are quite excited at the Saudi offer,” says caretaker PM.
  • Premier also says SIFC to serve as a “one-window operation”.

Caretaker Prime Minister Anwaar-ul-Haq Kakar has said that the government is expecting to reach a deal with Saudi Arabia by December this year to sell shares in the Reko Diq project — one of the world’s biggest gold and copper mines in Balochistan.

In an interview with Arab News on Monday, the premier confirmed that negotiations with Riyadh are underway to sell shares in the Reko Diq project, saying he is “hopeful” of a deal by December.

“We are quite excited at the Saudi offer, and we would be very much encouraging their participation, not just in this project but otherwise also,” PM Kakar said when asked if it was acceptable to the Pakistan government to sell its equity to Saudi Arabia.

“It is the negotiation part, which is happening between the three parties, and let’s see what sort of outcome comes of that … We are just a government that would encourage the Saudis to be part of this deal and the rest of the nitty-gritty details, when they reach a certain decision, we’ll share the news.”

Canadian company Barrick Gold Corporation owns 50% of the project’s shares under the revised agreement, while the Chilean company, Antofagasta, pulled out in return for $900m deposited by three governmental entities including the Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL).

The aforementioned entities possess a 25% share in the project — aimed at mining the undeveloped copper-gold deposits in Reko Diq, while the remaining 25% belongs to Balochistan including 15% on a fully funded basis and 10% on a free-carried basis.

Barrick considers the mine one of the world’s largest underdeveloped copper-gold areas, with the over $7 billion project capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century.

Barrick CEO Mark Bristow has repeatedly said the company’s stake wasn’t up for sale but it had no objection if Saudi Arabia wanted to buy out the equity of the Pakistan government, which would mean the South Asian country would no longer be able to maintain equal shares as the Canadian mining company.

“We are still approaching that day,” Premier Kakar said when asked if his government would succeed in meeting the December 25 deadline. “Hopefully [we can expect a deal by December].”

In August, Pakistan hosted officials from Saudi Arabia in its inaugural mining conference in Islamabad where Barrick officials were also present. Barrick and Saudi’s state-owned mining company Ma’aden jointly operate a copper project in Jeddah.

Saudi Arabia’s Public Investment Fund (PIF) has been looking to invest in copper projects across the world as part of its drive toward funding energy transition projects. Earlier this year, PIF agreed to acquire a 10% stake in Brazilian mining company Vale base metals business.

SIFC to bring $60bn investment

PM Kakar said in the future, a new Special Investment Facilitation Council (SIFC) set up in July would serve as a “one window operation” to address any concerns of foreign investors.

“Two or three areas have already been addressed, like repatriation of dollars, which is the demand of any FDI [foreign direct investment] entity, [that] it’s insured, it’s legally protected,” the PM said.

“Secondly, the bureaucratic red tapism has been also addressed, the one-window opportunity on the platform of SIFC is primarily being designed for this purpose, that we need to cut off all these bureaucratic hurdles and rationalise the entire process of allowing and giving permission to any investment from outside within 15 days.”

He said a dispute resolution mechanism had been agreed under the SIFC platform.

“It’s quite encouraging and favourable, which is acceptable to all the outside parties … The dispute resolution mechanism has been addressed.”

Responding to a question whether reports that SIFC would bring in up to $60 billion in investments in Pakistan in the next five years were realistic, the PM said: “It is indeed. It could be probably more than that.”

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