OGDCL, PPL increase financing commitment for Reko Diq copper-gold project to $715 million

Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited have increased their financing commitments for the Reko Diq copper and gold project, collectively raising their pro-rata funding commitment to $715 million. This increase follows updates from feasibility studies and revised financing terms for the project, signaling stronger financial backing to ensure the project’s completion.

Both companies disclosed this development through separate filings at the Pakistan Stock Exchange (PSX) on Tuesday in accordance with Section 96 of the Securities Act, 2015, and Clause 5.6.1(a) of the PSX regulations. 

OGDCL holds an 8.33% stake in the project, while Pakistan Petroleum Limited also holds the same percentage, alongside Government Holdings (Private) Limited, contributing to a collective 25% interest in the project. The remaining shares are held by the Government of Balochistan (25%) and Barrick Mining Corporation (50%), which operates the project through the Reko Diq Mining Company (Private) Limited (RDMC). The SOEs’ interest in RDMC is indirectly held via Pakistan Minerals (Private) Limited.

The updated feasibility study, approved by the board of directors on March 25, 2025, initially granted approval for a $627 million financing commitment, subject to adjustments for actual financing costs and inflation. Along with this, in-principle approval was granted for obtaining project financing. The expected shareholder contributions were pegged at $349 million at that time. 

However, following the progress in negotiations with project lenders, the board revised the Phase 1 development costs. This revision came on the advice of an Independent Technical Consultant due to the delay in production, now set for 2029 instead of 2028, as well as increased financing costs.

On August 18, 2025, OGDCL increased its financing commitment to $715 million, and the combined shareholder contributions for the project are now estimated to reach $391 million. This marks a significant adjustment reflecting updated financing and cost structures. The increase was approved in the context of the need to secure further financing to cover rising costs and maintain project timelines.

The Board of Directors of OGDCL also approved the execution of key agreements related to project financing, including the SOE Completion Agreement and the Transfer Restrictions Agreement. The SOE Completion Agreement mandates a collective guarantee from the SOEs, ensuring their pro-rata share (27.7778%) of RDMC’s secured debt obligations under the project financing. This guarantee will remain effective until the project meets the necessary commercial operation milestones for financial completion.

Additionally, the Transfer Restrictions Agreement includes minimum shareholding requirements for project sponsors, including the SOEs, both before and after financial completion. This is intended to ensure project sponsors maintain their commitment until the project’s debt is fully repaid.

These approvals, which are contingent on shareholders’ and regulatory approvals, are a crucial step towards securing the financial stability needed for the project. The project remains economically viable despite the revised costs, with the updated financing structure reflecting the ongoing efforts to ensure its completion. 

OGDCL and Pakistan Petroleum Limited’s increased financial backing highlights their commitment to the long-term success of the Reko Diq project.