Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) have revised their funding commitments for Phase 1 of the Reko Diq copper and gold mining project, increasing their pro-rata shares to $715 million each. The updated contributions account for higher financing costs and inflation.
In separate notices to the Pakistan Stock Exchange (PSX) on Tuesday, the two state-owned exploration and production companies confirmed that their expected shareholder contributions now stand at $391 million apiece after considering project-level financing.
OGDCL and PPL each hold an 8.33 percent stake in the Reko Diq project, alongside Government Holdings (Private) Limited (GHPL), which also owns 8.33 percent. Together, these Pakistani state-owned enterprises (SOEs) control 25 percent of the project through Pakistan Minerals (Private) Limited.
The Government of Balochistan has a 25 percent shareholding, with 15 percent on a fully funded basis through Balochistan Mineral Resources Limited and 10 percent on a free-carried basis. The remaining 50 percent is indirectly held by Barrick Mining Corporation, which is also the project operator.
Earlier this year, both OGDCL and PPL had approved commitments of $627 million each, with estimated shareholder contributions of $349 million. However, following negotiations with lenders and input from an independent technical consultant, the development costs were revised upward.
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The revised estimates reflect a more conservative approach to costs, factoring in a six-month delay in the start of production to 2029 instead of the earlier 2028 timeline, along with additional contingencies. Financing costs also increased as total project financing rose to $3.5 billion compared to the previous estimate of $3 billion.
Despite the upward revisions, OGDCL and PPL have reiterated that the Reko Diq copper-gold project remains economically viable. Their boards have also approved execution of key agreements, including the SOE Completion Agreement, under which state-owned companies will provide joint and several guarantees for 27.78 percent of RDMC’s secured debt until financial completion, and the Transfer Restrictions Agreement, which prevents share transfers until project debt is fully repaid.
The updated funding commitments remain subject to shareholder and regulatory approvals.
Reko Diq is regarded as one of the world’s largest undeveloped copper and gold deposits. Once operational, the project is expected to play a critical role in boosting Pakistan’s mining sector and contributing to long-term economic growth.
