OGDC raises funding for Reko Diq project
Listen to article
The board of directors of Oil and Gas Development Company (OGDC) has approved an increase in the firm's funding commitment to $627 million, including the project financing cost, which reflects its proportional share of total capital investment in the multibillion-dollar Reko Diq copper and gold mining project.
The approval came in the wake of completion of an updated feasibility study on the Reko Diq project, located in Chagai, Balochistan.
The increase in investment takes into account the estimated rise in copper and gold prices, which will help offset higher project costs. Equity contribution by company shareholders, after considering project financing, is expected to be $349 million (to be adjusted for actual project financing costs and inflation).
OGDC on Tuesday announced the completion of the updated feasibility study, marking a significant milestone in Pakistan's journey towards unlocking one of the world's largest copper and gold reserves.
OGDC holds an 8.33% shareholding in the Reko Diq project as part of a collective 25% stake held by three Pakistani state-owned enterprises, which also include Pakistan Petroleum Limited and Government Holdings (Private) Limited. The interest of state units is managed through Pakistan Minerals (Private) Limited. Out of the remaining 75% stake, 25% is held by the government of Balochistan (15% on a fully funded basis through Balochistan Mineral Resources Limited and 10% on a free carried basis) and 50% is with Barrick Gold Corporation – the operator of the project.
The updated feasibility study outlines a mine life of 37 years, divided into two phases. Phase-I entails an estimated capital outlay of $5.6 billion (excluding financing costs and inflation) and is expected to commence operations in 2028.
A limited-recourse financing facility of up to $3 billion is being pursued, with the remaining funding to be provided through shareholder contribution. Negotiations for project financing are ongoing.
The project will leverage five of the 15 currently identified porphyry surface expressions under the current mining lease, which highlights a substantial future growth potential.
Phase-II is planned to be funded through a mix of revenue generation from the project, additional financing and shareholder contribution (if required).
Under the updated feasibility study, phase-I is planned to process 45 million tonnes of mill feed annually from 2028. By 2034, phase-II is planned to double the processing capacity to 90 million tonnes per annum.
Based on the existing reserves, the Reko Diq project is expected to churn out 13.1 million tonnes of copper and 17.9 million ounces of gold over the life span of the mine (on a 100% basis).
The completion of the feasibility study represents a major achievement for the Reko Diq project, reinforcing its potential to generate long-term economic benefits, create jobs and ensure enhanced revenue streams for Pakistan.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
32 minutes ago
- Business Recorder
Pakistan likely to hike defence spending but slash overall budget in 2025-26
ISLAMABAD: Pakistan will unveil its annual federal budget for the coming fiscal year later on Tuesday, seeking to kickstart growth while finding resources for an expected hike in defence expenditure following the conflict with India last month. Islamabad will also have to contend with remaining within the discipline of its International Monetary Fund programme and the uncertainty from new trade tariffs being imposed by the United States, its biggest export market. Media reports say the government is likely to present a 17.6 trillion rupee ($62.45 billion) budget for the fiscal year beginning July 1, down 6.7% from this fiscal year. It has projected a fiscal deficit of 4.8% of GDP, against a targeted 5.9% deficit in 2024-25, the reports say. Analysts said they expect an increase of around 20% in the defence budget, likely offset by cuts in development spending. Pakistan allocated 2.1 trillion Pakistani rupees($7.45 billion) for defence in the outgoing fiscal year, including $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defence budget. India's defence spending in its 2025–26 (April-March) fiscal year was set at $78.7 billion, a 9.5% increase from the previous year, including pensions and $21 billion earmarked for equipment. It has indicated it will step up expenditure following the May conflict with Pakistan. The government of Pakistani Prime Minister Shehbaz Sharif has projected 4.2% economic growth in 2025-26, saying it has steadied the economy, which had looked at risk of defaulting on its debts as recently as 2023. Growth this fiscal year is likely to be 2.7%, against an initial target of 3.6% set in the budget last year. Economic Survey 2024-25: Pakistan misses growth target Pakistan's growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8% and 6.0% growth is expected in 2025, according to the Asian Development Bank. Rate cuts not enough Expansion of the economy should be aided by a sharp drop in the cost of borrowing, the government says, after a succession of interest rate cuts by the central bank. But economists warn that monetary policy alone may not be enough, with fiscal constraints and IMF-mandated reforms still weighing on investment. Finance Minister Muhammad Aurangzeb said on Monday that he wanted to avoid Pakistan's boom and bust cycles of the past. 'The macroeconomic stability that we have achieved, we want to absolutely stay the course,' he said. 'This time around we are very, very clear that we do not want to squander the opportunity.' The budget is expected to prioritize expanding the tax base, enforcing agriculture income tax laws, and reducing government subsidies to industry, to meet the terms of a $7 billion IMF bailout signed last summer. Just 1.3% of the population paid income tax in 2024, according to the tax authorities, with agriculture and the retail sector largely outside of the tax net. The IMF has urged Pakistan to widen the tax base through reforms which include taxing agriculture, retail, and real estate. Ahmad Mobeen, senior economist at S&P Global Market Intelligence, said that he expected the revenue target for 2025-26 will be missed. 'The shortfall will mostly be owing to lack of optimal implementation of announced measures as well as absence of meaningful structural reforms to widen the tax net in general,' said Mobeen.
Business Recorder
an hour ago
- Business Recorder
Pakistan Economic Survey fails to calculate unemployment rate for current year
ISLAMABAD: The Economic Survey 2024-25 failed to calculate the unemployment rate for the current year and instead cited the rate prevalent four years ago in 2020-21: 6.3 percent from Labour Force Survey (LFS) 2020-21. The reason noted in the report is that the LFS for 2022-23 could not be undertaken due to the engagement of PBS with the 7th Population & Housing Census. However, work on LFS 2024-25 is under process. The LFS survey reveals that in 2020-21 youth (aged 15-24) had the highest unemployment rate of 11.1 percent, with 10.0 percent for males and 14.4 percent for females. The second highest unemployment rate was seen amongst 25-34 year olds, with a rate of 7.3 percent. PBS conducts first digital census: Around 7.8pc of total population unemployed Among this group, 5.4 percent of males and 13.3 percent of females were unemployed leading to the conclusion that unemployment is more prevalent among females, especially those between 15 and 24 years of age. The survey mentioned that during 2024, the BE&OE and the OEC registered 727,381 workers for overseas employment. According to BE&OE, more than 62 percent (452,562) of Pakistani workers moved to Saudi Arabia for employment, followed by Oman (11 percent), to earn a living. UAE employed 64,130 Pakistani workers (9 percent) while Qatar offered jobs to 40,818 individuals (6 percent). Bahrain and Malaysia hosted 25,198 workers (3 percent) and 5,790 workers (1 percent), respectively. In 2024, the highest number of workers who went abroad for employment was from Punjab (404,345), followed by Khyber Pakhtunkhwa (187,103), Sindh (60,424), and Tribal areas (29,937). The skill composition of Pakistani emigrants in 2024 continues to be dominated by unskilled and semi-skilled labour, with relatively low representation from highly qualified and highly skilled professionals. According to the data, 50 percent of emigrants fall under the unskilled category (366,092), while 35 percent (255,706) are skilled workers. Although there has been a slight decline compared to 2023, unskilled labour remains in high demand globally, particularly in construction, domestic work, and agriculture sectors. The total population of Pakistan according to Seventh Population and Housing Census (2023) has reached 241.5 million; growing at 2.55 percent annually. The population comprises 124.32 million (51.5%) males and 117.15 million (48.5) females. A significant share of Pakistan's population is young, with 26% aged 15-29 years, while 53.8% fall within the working-age group of 15-59 years. This demographic dividend presents a unique opportunity for economic expansion and development. However, to fully capitalize on this advantage, strategic investments in education, skill development, and vocational training are essential. Copyright Business Recorder, 2025
Business Recorder
6 hours ago
- Business Recorder
Survey fails to calculate unemployment rate for current year
ISLAMABAD: The Economic Survey 2024-25 failed to calculate the unemployment rate for the current year and instead cited the rate prevalent four years ago in 2020-21: 6.3 percent from Labour Force Survey (LFS) 2020-21. The reason noted in the report is that the LFS for 2022-23 could not be undertaken due to the engagement of PBS with the 7th Population & Housing Census. However, work on LFS 2024-25 is under process. The LFS survey reveals that in 2020-21 youth (aged 15-24) had the highest unemployment rate of 11.1 percent, with 10.0 percent for males and 14.4 percent for females. The second highest unemployment rate was seen amongst 25-34 year olds, with a rate of 7.3 percent. PBS conducts first digital census: Around 7.8pc of total population unemployed Among this group, 5.4 percent of males and 13.3 percent of females were unemployed leading to the conclusion that unemployment is more prevalent among females, especially those between 15 and 24 years of age. The survey mentioned that during 2024, the BE&OE and the OEC registered 727,381 workers for overseas employment. According to BE&OE, more than 62 percent (452,562) of Pakistani workers moved to Saudi Arabia for employment, followed by Oman (11 percent), to earn a living. UAE employed 64,130 Pakistani workers (9 percent) while Qatar offered jobs to 40,818 individuals (6 percent). Bahrain and Malaysia hosted 25,198 workers (3 percent) and 5,790 workers (1 percent), respectively. In 2024, the highest number of workers who went abroad for employment was from Punjab (404,345), followed by Khyber Pakhtunkhwa (187,103), Sindh (60,424), and Tribal areas (29,937). The skill composition of Pakistani emigrants in 2024 continues to be dominated by unskilled and semi-skilled labour, with relatively low representation from highly qualified and highly skilled professionals. According to the data, 50 percent of emigrants fall under the unskilled category (366,092), while 35 percent (255,706) are skilled workers. Although there has been a slight decline compared to 2023, unskilled labour remains in high demand globally, particularly in construction, domestic work, and agriculture sectors. The total population of Pakistan according to Seventh Population and Housing Census (2023) has reached 241.5 million; growing at 2.55 percent annually. The population comprises 124.32 million (51.5%) males and 117.15 million (48.5) females. A significant share of Pakistan's population is young, with 26% aged 15-29 years, while 53.8% fall within the working-age group of 15-59 years. This demographic dividend presents a unique opportunity for economic expansion and development. However, to fully capitalize on this advantage, strategic investments in education, skill development, and vocational training are essential. Copyright Business Recorder, 2025
