Reko Diq project advances with $627M commitment from OGDCL

KARACHI - Oil and Gas Development Company Limited (OGDCL), a Pakistani state-owned enterprise, has announced an increased funding commitment of USD 627 million for the Reko Diq project, a large-scale copper and gold mining venture in Balochistan, Pakistan. This decision follows the completion of an updated feasibility study and subsequent board approvals.

The Reko Diq project, operated by Barrick Gold (NYSE:GOLD) Corporation, which holds a 50% interest, is a joint venture with three Pakistani State-Owned Enterprises (SOEs) collectively owning 25% through Pakistan Minerals (Private) Limited, and the Government of Balochistan owning the remaining 25%. OGDCL’s share in the project is 8.33%.

The updated feasibility study envisions a 37-year mine life, starting with a Phase 1 development that requires an estimated capital outlay of USD 5.6 billion, not including financing costs and inflation. Phase 1 is expected to be funded through a project financing facility of up to USD 3 billion and shareholder contributions. It will initially process 45 million tonnes per annum (Mtpa) of mill feed starting from 2028, with plans to double capacity to 90Mtpa in Phase 2 by 2034.

Based on current reserves, the project is anticipated to produce 13.1 million tonnes of copper and 17.9 million ounces of gold over its lifetime, on a 100% basis. The board’s approval for increased funding is aligned with the project’s potential and the recent uptick in copper and gold prices, which is expected to offset the impact of heightened project costs.

The board has also given in-principle approval to seek project financing, with OGDCL’s equity contributions post-financing projected at USD 349 million, subject to adjustments for actual costs and inflation. These approvals are contingent upon obtaining further consent from shareholders and regulators.

The announcement was made in compliance with Section 96 of the Securities Act, 2015, and Clause 5.6.1(a) of Pakistan Stock Exchange Regulations. Negotiations for the proposed project financing are still in progress, and the company’s increased commitment represents a significant step in the advancement of the Reko Diq project. The information is based on a press release statement from OGDCL.

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