OGDC, PPL to fork out over $187.5m each for Reko Diq project.

KARACHI -- Two state-owned energy companies announced separately on Tuesday they'll seek approval from their respective shareholders to subscribe to 33.3 per cent shares of Pakistan Minerals Ltd for taking part in the reconstituted Reko Diq project.

The reconstituted project, which will excavate gold and copper reserves in Balochistan, has saved the country from an $11 billion penalty in the Reko Diq case.

Pakistan Minerals Ltd will then buy a 25pc shareholding in Tethyan Copper Company Pakistan Ltd - to be re-named as Reko Diq Mining Company Ltd - from its present holding company Tethyan Copper Company Ltd.

Under the new agreement, Barrick Gold Corporation will get a share of 50pc and the Balochistan government will hold a 25pc stake in the project. The rest of the 25pc shareholding will be controlled equally (8.33pc each) by the three state-owned enterprises - namely Oil and Gas Development Company Ltd (OGDC), Pakistan Petroleum Ltd (PPL) and non-listed Government Holdings Ltd - through the special-purpose vehicle (SPV) of Pakistan Minerals Ltd.

The newly created SPV will pay $562.5 million plus accrued interest for a stake in the project. It means each of the three companies will have to fork over $187.5m for a chunk of Reko Diq Mining Company.

Speaking to Dawn, Topline Securities Associate Director for Research Umair Naseer said the two energy exploration and production companies have joined the...