Islamabad:
The Board of Directors of the Petroleum and Gas Development Company (OGDC) approved an increase in the company’s financing commitment to $ 627 million, including the project financing cost, which reflects its proportional share of the total capital investment in the Reko DIQ project and gold extraction of several billion dollars.
The approval occurred following a feasibility study updated on the Reko Diq project, located in Chagai, Balutchistan.
The increase in investment takes into account the estimated increase in copper and gold prices, which will help compensate for higher project costs. The contribution of the actions by the shareholders of the company, after having envisaged the financing of the project, should be $ 349 million (adjusted for the financing costs of real project and inflation).
The OGDC announced on Tuesday the completion of the updated feasibility study, marking an important step in the trip from Pakistan to the unlocking of one of the largest copper and gold reserves in the world.
The OGDC holds a participation of 8.33% in the Reko DIQ project as part of a collective participation of 25% owned by three Pakistani public companies, which also include Pakistan Petroleum Limited and Government Holdings (private) Limited. The interest of state units is managed via Pakistan Minerals (private) Limited. On the remaining participation of 75%, 25% are held by the government of Balutchistan (15% on a basis entirely funded by Balouthistan Mineral Resources Limited and 10% on a free basis) and 50% are with Barrick Gold Corporation – the project operator.
The updated feasibility study describes a 37 -year mine lifespan, divided into two phases. Phase I implies an estimated capital expenditure of $ 5.6 billion (excluding funding costs and inflation) and should start its operations in 2028.
An ease of financing for limited appeal of $ 3 billion is being prosecuted, the remaining funding which will be provided by the contribution of shareholders. Negotiations for project financing are underway.
The project will take advantage of five of the 15 porphyry surface expressions currently identified within the framework of the current mining lease, which highlights a potential for substantial future growth.
Phase II should be funded by a mixture of revenue generation from the project, additional funding and shareholders’ contribution (if necessary).
As part of the updated feasibility study, phase I is planned to process 45 million tonnes of factory supply per year from 2028. By 2034, phase II should double the treatment capacity to 90 million tonnes per year.
Based on existing reserves, the Reko Diq project should produce 13.1 million tonnes of copper and 17.9 million ounces of gold over the lifespan of the mine (100%).
The completion of the feasibility study represents a major realization for the Reko Diq project, strengthening its potential to generate long -term economic advantages, create jobs and ensure improved sources of income for Pakistan.
