Pakistan and Saudi Arabia expect to make progress on the Reko Diq deal

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Staff Reporter

2 years ago

High-level Pakistani delegation is also expected to discuss Saudi Arabia’s interest in building a refinery in the country.

ISLAMABAD: Talks with Saudi Arabia about a potential investment in the Reko Diq copper and gold project are expected to continue during a three-day mineral forum that began today in Riyadh.

A high-level Pakistani delegation, led by caretaker Energy Minister Muhammad Ali, is in Riyadh for the Future Minerals Forum (FMF), a platform for promoting mineral value chains in Africa, Western and Central Asia, which runs from January 9 to 11.

The delegation will include the secretary of the petroleum division, as well as officials from the Special Investment Facilitation Council (SIFC), Pakistan Mineral Development Corporation (PMDC), Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Geological Survey of Pakistan.

The delegation is also expected to discuss Saudi Arabia’s interest in establishing a refinery in Pakistan, according to the official.

“Pakistan authorities may also take up this issue of paramount importance with Aramco officials during the visit.” Aramco wants Sinopec, a Chinese company, to participate in the refinery project, which Pakistan has agreed to.

Saudi Arabia aims to attract SR63.7 billion ($170 billion) in mining investment by 2030 to help the country capitalise on its mineral resources, which are estimated to be worth more than SR4.88 trillion ($1.3 trillion), according to an official.

In 2022, the Geological Survey of Pakistan (GSP) and Ma’aden, a Saudi-owned mining company, agreed to conduct a survey to locate mineral treasures.

Apart from attending the Forum, the official stated that during the visit, Saudi and Pakistani authorities will discuss potential investment in the Reko Diq project, and both countries may reach an agreement.

Furthermore, the visiting authorities are expected to discuss with Saudi Arabia the possibility of establishing a cutting-edge deep conversion refinery in Pakistan. The SIFC is eager to sell government shares to Saudi investors in order to expand the scope of Saudi investment in Pakistan.

The investment by Saudi investors (KSA) will be considered strategic.

Under the revised agreement, the Canadian company Barrick Gold Corporation owns 50% of the shares, while Antofagasta of Chile has exited the project in exchange for $900 million deposited by three federal government entities — OGDCL, PPL, and Government Holdings Private Limited.

These entities own 25% of the project, while Balochistan owns the same number of shares. 15% are fully funded, while 10% are free-carried.

Energy Minister Ali and top officials from the power division have played a critical role in SIFC directives to reach an agreement with K Electric and resolve all of its issues in order to facilitate its main owner, Saudi Arabia’s Aljomaih Power Limited.

One of the Kingdom’s conditions was that Pakistan first facilitate Aljomaih Power Limited of Saudi Arabia by resolving all KE issues in order to attract more investment in Pakistan’s mining, refinery, agriculture, and other sectors.

The majority of the company’s shares (66.4%) are listed on the PSX and are owned by KES Power, a consortium of investors that includes Saudi Arabia’s Aljomaih Power Limited, Kuwait’s National Industries Group (Holding), and the Infrastructure and Growth Capital Fund.

Staff Reporter