By After the approval of the multi-billion dollars Reko Diq project deal by the Supreme Court of Pakistan, the Economic Coordination Committee of the Cabinet on Sunday approved the opening of an escrow account for depositing $900 million for making the project operational.
Another summary of the ECC’s approval of the Government of Pakistan’s funding plan, which calls for $717 million over six years, was also approved.
Senator Ishaq Dar, the federal minister of finance and revenue, virtually presided over the ECC of the Cabinet meeting.
Following the adverse arbitral awards of the International Center for Settlement of Investment Disputes, the Government of Pakistan (GOP) and the Provincial Government of Balochistan (GoB) have, with the approval of the federal and provincial cabinets, entered into an out-of-court settlement with M/s Tethyan Copper Company Pvt. Limited, Australia (TCCA), which is jointly owned by Barrick Gold Corporation of Canada and M/s Antofagasta PLC of Chile.
According to the settlement, the joint venture was divided into three shares: 50% owned by Barrick Gold Corporation, 25% by the federal government through Pakistan Minerals (Private) Limited (a SOEs’ SPV), and 25% by Balochistan as 10pc direct free carried + 15% through Balochistan Mineral Resources Limited (a GoB SPV), to be paid by GOP along with capital and operating costs on the project.
The ECC discussed and approved two crucial agenda items connected to the Reko Diq project, according to a formal statement released by the Ministry of Finance, clearing the way for the project’s early commencement.
By the Reko Diq project dispute resolution, the Ministry of Energy’s Petroleum Division provided a summary of accumulated interest about the amounts held in an escrow account.
According to the information provided, the Reko Diq Copper-Gold Project in the Chagai area of Balochistan was the subject of an out-of-court dispute settlement with M/s Tethyan Copper Company (Pvt) Limited, a partnership between Barrick Gold Corporation of Canada and M/s Antofagasta PLC of Chile.
The GOP must refund its debts to Antofagasta PLC by the conditions of the settlement. By the terms of the settlement agreement, the ECC authorized the Finance Division to direct GHPL, OGDCL, and PPL to deposit a total of US$22,718,173 in interest payments in the escrow account between March 31, 2022, and December 15, 2022, for both their accounts and the GoB’s share.
The ECC also gave the Finance Division permission to arrange the US$ 8,519,314 in interest payments due for the GoB’s part of the Rs. 65 billion loans that the GHPL had previously secured with the GOP’s guarantee.
Additionally, the ECC allowed the concerned Divisions of the GOP and the SOEs to take the necessary actions to ensure that the deposited amount and any interest were included in the consideration for the purchase of shares of the Reko Diq Mining Company Limited.
A proposal from the Finance Division about the funding plan of the Government of Pakistan for the Government of Balochistan’s participation in the Reko Diq project was also taken into consideration and accepted by the ECC.
According to the proposal, the Government of Pakistan would contribute a total funding commitment of US$717 million over six years for the GoB SPV Project Capital Commitment.
