Saturday May 18, 2024

Govt signs deal to settle $11bn Reko Diq dispute

By News Report
December 16, 2022

ISLAMABAD: The Governments of Pakistan and Balochistan, Barrick Gold, and Antofagasta PLC signed a final deal in London on Thursday, announcing the reconstitution of Reko Diq project and settlement of $11 billion dispute after a favourable opinion from the Supreme Court and required legislation passed into law.

According to a statement issued by the Attorney-General of Pakistan’s office, one of the largest undeveloped copper-gold projects in the world, Reko Diq will be owned:

50% by Barrick Gold

25% by three state-owned enterprises — Oil and Gas Development Company, Pakistan Petroleum Limited and Government Holdings (Private) Limited

15% by the province of Balochistan on a fully funded basis

10% by the province of Balochistan on a free-carried basis

“The development of Reko Diq into a world-class mine is among the largest foreign direct investment ever into Pakistan. The project will bring growth and opportunity for the province of Balochistan and the nation as a whole for generations,” the statement read.

It further mentioned that in addition to the economic benefits it will deliver, the mine will also create jobs, promote the growth of a regional economy, and invest in development programs in Balochistan.

It should be noted that the province’s interest in the mine will be fully funded, meaning that Balochistan will reap the dividends, royalties, and other benefits of its shareholding without having to contribute financially.

Moreover, during peak construction, the project is expected to employ 7,500 people and once in production, it will create around 4,000 long-term jobs. The employment of local communities has been prioritised. Reko Diq’s ownership structure reflects a partnership between Pakistan, the province, and a major international mining company — benefitting all stakeholders.

The negotiations commenced in 2015 with increasing commitment from 2019 onwards. The negotiations team was led by Additional Attorney-General Ahmad Irfan Aslam and Brigadier Atif Rafique. Pakistan met the deadline for signing the deal after the cabinet’s approval. President Arif Alvi also signed the Foreign Investment Promotion and Protection Bill 2022 on Tuesday.

The bill, which was already passed by two houses of parliament on Monday, is aimed at giving protection to foreign investments in the country.