OGDCL finishes Reko Diq project feasibility study

ISLAMABAD: In a major development, Oil and Gas Development Company Limited (OGDCL) has announced completion of updated feasibility study for Reko Diq project.

The development marks a significant milestone in Pakistan’s journey towards unlocking one of world’s largest undeveloped copper-gold resources. OGDCL holds an 8.33pc share in the project as part of a collective 25pc stake held by three Pakistani State-Owned Enterprises (SOEs), Pakistan Petroleum Limited (PPL) and Government Holdings (Private) Limited (GHPL). The SOEs’ interest is managed through Pakistan Minerals (Private) Limited.

Of the remaining share, 25pc is held by Government of Balochistan (15pc on a fully-funded basis through Balochistan Mineral Resources Limited, 10pc on a free carried basis) and 50pc is held by Barrick Gold Corporation, which is the operator of the project, says a press release.

The updated feasibility study outlines a mine life of 37 years, divided into two phases. Phase 1 of the project entails an estimated capital outlay of $5.6 billion (exclusive of financing costs and inflation), and is expected to commence operations in 2028. A limited-recourse project financing facility of up to $3 billion is being pursued, with the remainder to be funded through shareholder contributions. Negotiations for the project financing are ongoing.

The project will leverage five of currently identified 15 porphyry surface expressions within the current mining lease, highlighting substantial future growth potential. Phase 2 is planned to be funded through a mix of revenue generation from the project, additional project financing and shareholder contributions (if required).

Under the updated feasibility study, Phase 1 is planned to process 45 million tonnes of mill feed annually (Mtpa) from 2028.

By 2034, Phase 2 is planned to double processing capacity to 90Mtpa. Based on existing reserves, Reko Diq project is expected to yield production of 13.1 million tonnes of copper and 17.9 million ounces of gold over the life of the mine (100pc basis).

In the light of these developments, Board of Directors of OGDCL has approved an increase in the company’s funding commitment to $627 million, inclusive of project financing costs, reflecting its proportional share of total capital investment.

This increase accounts for estimated rise in copper and gold prices, which have helped offset higher project costs. The shareholder equity contributions by the company after taking into account project financing are expected to be $349 million (to be adjusted for actual project financing costs and inflation).

The completion of feasibility study represents a major achievement for Reko Diq project, reinforcing its potential to generate long-term economic benefits, job creation and enhanced revenue streams for Pakistan.