PPL to fund Balochistan's share in lead-zinc mining project

Pakistan Petroleum Limited (PPL) has announced its decision to finance the Government of Balochistan's (GoB) capital contribution in the Lead-Zinc processing plant project (BLZ Project).

The announcement came following the approval by PPL's Board of Directors (BoD) in a meeting held on February 3, 2024, as per the notice sent to the Pakistan Stock Exchange (PSX).

Although the specific funding amount was not disclosed, PPL has committed to sourcing the capital from its cash flows, providing a financing arrangement for GoB's contribution.

The arrangement includes debt servicing from GoB's share of the project's cash flows.

A financing agreement is to be executed between PPL and GoB, pending all necessary approvals, including those from Balochistan's provincial cabinet and PPL shareholders.

This financial backing follows PPL's disclosure in December 2021 of obtaining a large-scale mining lease for lead and zinc in District Khuzdar from GoB.

The lease, covering an extensive area of 30 Sq.km (7413.16 acres), marks the initiation of the BLZ Project, with operations handed over to Bolan Mining Enterprises (BME), a joint venture between GoB and PPL.

BME, established on a 50% working interest agreement between GoB and PPL since June 1, 1974, is tasked with mining, grinding, and marketing baryte deposits in Gunga near Khuzdar and other minerals in Balochistan.

With PPL as the designated operator, the agreement, initially signed for thirty years, was renewed in June 2004 for an additional thirty years.