ISLAMABAD: As a formal feasibility study confirmed more than $60 billion worth of copper and gold reserves at the Reko Diq project in Balochistan at prevailing prices, three state-owned energy sisters have more than doubled their funding commitment close to $1.9bn.

Three SOEs — Oil and Gas Development Com­pany Ltd (OGDCL), Pakistan Petroleum Ltd (PPL) and Government Holdings (Pvt) Ltd (GHPL) — had originally committed about $300 million each to the project that has now been increased to $627m each. The trio’s total funding has thus increased to about $1.88bn from about $900m initially planned, informed sources told Dawn.

“Based on existing reserves, the Reko Diq project is expected to yield production of 13.1 million tonnes of copper and 17.9 million ounces of gold over the life of the mine (100pc basis),” announced the state-run OGDCL.

The feasibility study has also confirmed a lucrative 25pc rate of return on investment on one of the biggest copper-gold project, informed sources said, adding that the project operations would be run entirely on solar energy, thus becoming the only green project of the sort so far across the globe.

Three energy giants double their funding in project to $1.9bn

At current market price of $3,016 per ounce of gold and $9,815 per tonne of copper, the total yield works out to be over $60bn, including $54bn of gold and $6bn of copper, an official said.

Under the updated feasibility study, Phase 1 is planned to process 45 million tonnes of mill feed annually (Mtpa) from 2028. Previously, it was estimated to be close to 40m tonnes. By 2034, Phase 2 is planned to double the processing capacity to 90Mtpa, the OGDCL said.

The updated feasibility study outlines a mine life of 37 years, divided into two phases. Phase 1 of the project entails an estimated capital outlay of $5.6bn (exclusive of financing costs and inflation) and is expected to commence operations in 2028.

A limited-recourse project financing facility of up to $3bn is being pursued, with the remainder to be funded through shareholder contributions, OGDCL said, adding that negotiations for the project financing were ongoing.

The project will leverage five of the currently identified 15 porphyry surface expressions within the current mining lease, highlighting substantial future growth potential. Phase 2 is planned to be funded through a mix of revenue generation from the project, additional project financing and shareholder contributions (if required).

In light of these developments, the OGDCL’s board of directors has approved an increase in the company’s funding commitment to $627m, inclusive of project financing costs, reflecting its proportional share of total capital investment, the company announced.

This increase accounts for the estimated rise in copper and gold prices, which have helped offset higher project costs. The shareholder equity contributions by the Company after taking into account project financing are expected to be $349m, to be adjusted for actual project financing costs and inflation, the OGDCL said.

In a similar announcement, PPL also reported that its board of directors had approved increase in its funding commitment to the project, reflecting its pro rata share of total capital investment to $627m. The board “has also given an in-principle approval to obtain project financing”, it said adding that the shareholder equity contributions by the company after taking into account project financing are expected to be $349m.

Informed sources said a similar decision had also been taken by the GHPL.

OGDCL announces “the completion of the updated feasibility study for the Reko Diq Project, marking a significant milestone in Pakistan’s journey toward unlocking one of the world’s largest undeveloped copper-gold resources. OGDCL holds an 8.33pc share in the project as part of a collective 25pc stake held by three Pakistani SOEs, including PPL and GHPL.

The SOEs’ interest is managed through Pakis­tan Minerals (Private) Ltd. Of the remaining share, 25pc is held by the Government of Balochistan (15pc on a fully funded basis through Balochistan Mineral Resources Ltd and 10pc on a free carried basis) and 50pc is held by Barrick Gold Corporation, which is the operator of the project.

Published in Dawn, March 26th, 2025