ECC Approves Payment Of $900m To Chilean Company For Quitting Reko Diq Project

In a special meeting on Sunday, the Economic Coordination Committee (ECC) of the federal cabinet approved the payment of more than $900 million over a period of 6 years to a Chilean firm. The ECC meeting was chaired by Finance Minister Ishaq Dar via video link from Lahore, to approve decisions in advance of a deadline for an out-of-court settlement with Tethyan Copper Company, so that Pakistan could avoid paying $10 billion in international arbitration awards.

Three Pakistani state-owned enterprises - OGDCL, PPL and GHPL - were authorized to deposit $900 million in escrow for the payment to Antofagasta over a period of 6 years. These three firms must also arrange approximately $4.3 billion as equity investment in the restructured project, now renamed Barrick Reko Diq Holdings Limited (BRDHL) since it will be operated by Canada’s Barrick Gold Corporation mining company.

The ECC also approved shareholder financing worth $1.9 billion from state-owned enterprises (SOEs) to take the Reko Diq gold and copper mining project forward. Finance Ministry sources said that these two decisions are expected to facilitate the start of the mega project, which has already suffered inordinate delays for years now.