ISLAMABAD: After the Supreme Court of Pakistan approved the deal for the multi-billion dollar Reko Diq project, the Economic Coordination Committee (ECC) of the Cabinet on Sunday opened an escrow account to deposit $900 million to operationalize the project. Approved to open. .
The committee also approved another summary of the approval of the Government of Pakistan’s funding plan of $717 million over a six-year period.
Federal Finance Minister and Revenue Senator Ishaq Dar presided over the cabinet meeting in practice.
With the approval of the Federal and Provincial Cabinets, the Government of Pakistan and the Government of Balochistan have reached an out-of-court settlement with M/s Tethyan Copper Company Private Limited, Australia (TCCA). Following adverse arbitration awards by the International Center for Settlement of Investment Disputes (ICSID) in respect of Reko Diq Copper-Gold Project – Chagai District (Baluchistan) Canada and M/s Antofagasta PLC of Chile and pending similar award from the International Chamber of Commerce (ICC) against the Federation and the Province of Balochistan respectively.
Under the settlement arrangement, the joint venture was divided into 50% shares by Barrack Gold Corporation, 25% by the Federal Government through a special purpose vehicle, namely Pakistan Minerals (Private) Limited (SOEs’ SPV) and 25% by Balochistan. As 10% direct free carry plus 15% through Balochistan Mineral Resources Limited (GoB SPV), will be paid by the Government of Pakistan along with capital and operating expenses on the project.
According to an official statement issued by the Ministry of Finance, the ECC considered and approved two important agenda items related to the Reko Diq project, thus paving the way for the early launch of the project.
The Ministry of Energy (Petroleum Division) has submitted a summary of interest accrued in respect of the amount held in the escrow account in connection with the Reko Diq Project dispute settlement.
As per the terms of the settlement, the Government of Pakistan is to clear the dues to Antofagasta PLC.
In light of the terms of the agreed settlement, the Committee authorized the Finance Division to escrow an aggregate interest amount of $22,718,173 to GHPL (for its own and GOB’s share), OGDCL and PPL. Deposit into the account. From 31 March 2022 to 15 December 2022.
The ECC further authorized the Finance Division to arrange interest payable to GoB’s share of $8,519,314 from the Rs 65 billion loan already raised by GHPL with GoB guarantee.
Furthermore, the ECC allowed the relevant divisions of the Government of Pakistan and SOEs to act in such a way as to ensure that the amount deposited by the SOEs in the escrow account along with the interest deposited by Ricoh. Form part of consideration for purchase of shares. DAKE MINING COMPANY LIMITED.
The ECC also considered and approved the Finance Division’s proposal through a summary of the Government of Pakistan’s funding plan for the Government of Balochistan’s share in the Reko Diq project.
As per the proposal, an aggregate funding commitment of $717 million over a period of six years is to be provided by the GOP towards the GoB SPV project capital commitment by the Government of Pakistan.
