Reko Diq project: Federal Cabinet okays payments for Chilean firm

ISLAMABAD: Following the endorsement of the multi-billion dollars Reko Diq project deal by the Supreme Court of Pakistan, the federal cabinet on Tuesday approved the clearance of liabilities of Chilean firm Antofagasta, ARY News reported, quoting sources.

According to details, the federal cabinet approved an important decision related to Reko Diq project, allowing the authorities to clear liabilities of Chilean firm Antofagasta.

Sources told ARY News that the cabinet gave emergency approval through circulation. A total of more than $22.7 million of interest will be allowed to clear the liabilities, sources added.

Sources added that the Finance Ministry has been directed to arrange the interest payable for Balochistan’s share. The finance ministry would arrange more than $8.5 dollars, sources added.

Govt Holdings Pvt Limited (GHPL) have already raised Rs65 billion with government’s guarantee, sources added.

Earlier on December 11, the Economic Coordination Committee (ECC) of the cabinet approved a payment of more than $900 million to the Chilean firm Antofagasta over six years to exit the Reko Diq project.

The committee also green-lighted about $1.91bn shareholder financing by state-owned enterprises (SOEs) to take the gold and copper mining project forward.

It was presented that Government of Pakistan and Balochistan government entered into an out-of-court dispute settlement with M/s Tethyan Copper Company Pvt Limited- a consortium of Barrick Gold Corporation of Canada and M/s Antofagasta PLC of Chile, in respect of Reko Diq Copper-Gold Project.

As per settlement terms, Government of Pakistan has to clear liabilities to Antofagasta PLC. In the light of the terms of agreed settlement, the ECC allowed Finance Division to direct GHPL (for its own as well as GoB’s share), OGDCL and PPL to deposit the aggregate amount of interest to the sum of $ 22,718,173/- in the escrow account from March 31, 2022 to December 15, 2022.

It is pertinent to mention here that the Supreme Court (SC) of Pakistan on Dec 9 ruled that new deal on the Reko Diq gold and copper mining project in Balochistan is legal.

Reko Diq is one of the world’s largest undeveloped copper-gold mines. The project is being restarted after remaining on hold since 2011.

The top court announced the ruling on a reference sent by President Arif Alvi under Article 186 of the Constitution of Pakistan in the Reko Diq Project on the advice of Prime Minister Shehbaz Sharif.

The SC in its ruling said that international experts assisted the court and added that the Reko Diq deal is not in contradiction with the SC’s order in 2013. The agreement was done by the federal and Balochistan governments in line with the opinion of experts and there is nothing illegal in it.