Pakistan is exploring the possibility of selling some of its stakes in the Reko Diq gold and copper mines to Saudi Arabia as part of an effort to secure investments from the Gulf nation.
Currently, Canadian firm Barrick Gold Corporation owns 50 percent shares in the Reko Diq project while Antofagasta of Chile had exited the project after selling its stake in exchange for $900 million to three companies of the federal government naming Oil & Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited which collectively owns 25 percent stake and remaining 25 percent is held by Balochistan.
According to official sources as reported by The News, the Special Investment Facilitation Council (SIFC) has urged federal companies to conclude transaction with Saudi companies in the coming months. Originally targeted for completion by December 2023, the timeline has now been extended to the end of March 2024.
Last week, PPL and OGDCL have shared this information with the Pakistan Stock Exchange (PSX), while Government Holdings Private Limited (GHPL) was exempted from this requirement since it is not listed on the PSX.
PPL has publicly disclosed its intention to evaluate potential engagement with sovereign foreign investors for the Reko Diq Project through its associated company, M/s Pakistan Minerals (Private) Limited, in full compliance with regulatory requirements.
SIFC has confirmed the development, with an official stating that Pakistan seeks Saudi involvement in the existing Reko Diq Project, as the Gulf state prefers established mining areas over unexplored ones. To determine the shares’ value, a third-party assessment is underway to facilitate negotiations.
Barrick Gold has also expressed interest in bringing Saudi partners into the project, but several issues remain unresolved. Pakistan is advocating for Barrick Gold to sell some shares to the Saudi government, although the feasibility of this remains uncertain.
The central question in ongoing negotiations revolves around major shareholding rights. Currently, Barrick Gold and the federal and provincial governments each hold 50 percent shares. If the federal government sells its shares, this balance will shift in favor of the Canadian company.
There are no plans to ask the provincial government to sell its shares, as it would not be fair to Balochistan. The Saudi investors’ structure remains unclear, as the Saudi government may hold shares even if the company is privately owned.
While the federal government is not particularly enthusiastic about divesting its shares, it hopes that this decision will attract more investments in other sectors. A third-party assessment of the shares’ value is expected to conclude by early December 2023.
