The new Reko Diq deal came into effect Friday with 50 percent shares for Barrick Gold– a Canadian firm which will start working on the project with an immediate effect.
However, the remaining shares are divided among three federal state-owned enterprises 25 percent and Balochistan 15 percent and 10 percent on a fully funded basis and free carried basis
Meanwhile, Barrick Gold promised that the move would benefit the stakeholders in Pakistan for generations to come, after inking the agreement concerning one of the largest undeveloped copper-gold projects in the world.
In this connection, an agreement was signed Thursday, involving the Pakistan and Balochistan government as well as Barrick Gold – a move that came after the Supreme Court endorsed a settlement to resume mining at the site.
In a statement issued late on Thursday night, the Balochistan government termed the agreement historic and the country’s biggest investment accord. “After signing the Reko Diq agreement, the $6.5 billion fine imposed by an international court has become ineffective,” it added.
The news about the agreement was also confirmed by Barrick Gold, saying they had completed the reconstitution of the Reko Diq project after “having received a favourable opinion from the Supreme Court of Pakistan and the required legislation having been passed into law”.
Barrick president and chief executive Mark Bristow said the completion of the legal processes was a key step in progressing the development of Reko Diq into a “world-class, long-life mine which would substantially expand the company’s strategically significant copper portfolio and benefit its Pakistani stakeholders for generations to come”, the company said in a statement.
“We are currently updating the project’s 2010 feasibility and 2011 feasibility expansion studies. This should be completed by 2024, with 2028 targeted for the first production,” Mr Bristow said.
Exit of Antofagasta
Meanwhile, Antofagasta Plc, a London-based mining company, said on Thursday it had exited the Reko Diq project, according to Alliance News equities news service.
Antofagasta said the project had been reconstituted under Tethyan Copper Co Pty Ltd, a joint venture registered in Australia held equally by Antofagasta and Barrick Gold.
It said a consortium of “various Pakistan state-owned enterprises” had acquired shares in the Tethyan Copper Co subsidiary, which holds the project.
The proceeds of the sale, which together equals $945 million, will be held by Tethyan Copper. Antofagasta expects to receive the proceeds by the end of 2023.
While Antofagasta retains its shareholding in Tethyan Copper until the proceeds are distributed, it “will cease to have any appointees on the board and will no longer be involved in the business of TCC”.