By Staff Reporter
ISLAMABAD: Pakistan’s caretaker prime minister said his government hopes to conclude a deal by December for Saudi Arabia to buy stakes in one of the world’s biggest gold and copper mining projects, as the kingdom seeks to diversify its economy and secure supplies of key metals.
Anwaar-ul-Haq Kakar, who took office in August as a stop-gap arrangement before the polls due in early February, said in an interview with Arab News that negotiations were underway with Saudi Arabia to sell its shares in the Reko Diq mine, located in the restive Balochistan province.
“We are quite excited at the Saudi offer, and we would be very much encouraging their participation, not just in this project but otherwise also,” Kakar said. “It is the negotiation part, which is happening between the three parties, and let’s see what sort of outcome comes of that.”
The Reko Diq mine is owned by a joint venture of Canada’s Barrick Gold Corp. and Pakistan’s federal and provincial governments, each holding a 50 percent, 25 percent and 25 percent stake respectively.
Barrick considers the mine one of the world’s largest underdeveloped copper-gold areas, with the over $7 billion project capable of producing 200,000 tons of copper and 250,000 ounces of gold a year for more than half a century.
Barrick’s chief executive officer Mark Bristow has repeatedly said the company’s stake wasn’t up for sale but it had no objection if Saudi Arabia wanted to buy out the equity of the Pakistan government, which would mean the South Asian country would no longer be able to maintain equal shares as the Canadian mining company.
Kakar said he was “hopeful” of a deal by December, adding that his government had granted exemptions to the Petroleum Division from public procurement rules to propose a negotiating committee and hire an additional adviser to finalize binding agreements with Saudi Arabia by December 25.
Saudi Arabia’s Public Investment Fund, the kingdom’s sovereign wealth fund, has been looking to invest in copper projects across the world as part of its drive toward funding energy transition projects. Earlier this year, PIF agreed to acquire a 10 percent stake in Brazilian mining company Vale base metals business.
The fund has not yet commented on its interest in the Reko Diq project, but Saudi officials attended a mining conference in Islamabad in August where Barrick representatives were also present. Barrick and Saudi’s state-owned mining company Ma’aden jointly operate a copper project in Jeddah.
The Reko Diq project has been mired in legal disputes for over a decade, after Pakistan’s Supreme Court in 2011 ruled illegal the award granted to Barrick and its former partner Antofagasta Plc. The companies filed a case in an international arbitration court, which imposed a penalty of $11 billion on Pakistan for suspending the contracts.
Last year, Barrick reached an out-of-court settlement with Pakistan and agreed to restart development. Antofagasta, however, left the project, saying its growth strategy was focused on the production of copper and by-products in the Americas.
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