ISLAMABAD: The Ministry of Finance (MoF) has said that a third-party guarantee arrangement on Reko Diq is likely to be approved by the Asian Development Bank (ADB) in February 2025, well-informed sources told Business Recorder.
The sources said, the Reko-Diq Mining Company (RDMC) country director at a recent meeting made a brief presentation on the overall project and highlighted specific milestones needed to be completed by December 2024.
He also appreciated and acknowledged the support of the members of Project Support Team (PST) in resolving several pending issues.
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The meeting discussed Financial Close (FC) of the project by June 2025, saying the GoP guarantee/ additional security by the government of Balochistan (GoB)/ BMRL (Balochistan Mineral Resources Limited), equity funding obligations and acquisition of third-party guarantee for the equity share of government of Balochistan are critical for the FC of the project.
The Finance Division representative shared that the acquisition of the third-party guarantee arrangements with the ADB is being processed with anticipated approval of it in the board meeting of ADB scheduled in February 2025.
He said the secretary finance and the secretary Petroleum Division will finalise the required credit enhancement with the lending parties to ensure the SOE creditworthiness is addressed to facilitate the project financing.
The track access and operator agreement between Pakistan Railways and RDMC is required for the financial close of the project. Several meetings between Pakistan Railways and RMDC have already been held.
According to the representative of Pakistan Railways, the ministry is aiming to have the first draft of the agreement ready by October 5, 2024.
On Pakistan International Bulk Terminal Limited (Port Qasim) conversion of export licence, the RDMC said that the PIBT copper-concentrate export approval may require an amendment of PIBT concession arrangements. The process is under review with PIBT and PQA. The Maritime Division has been directed to expedite it for timely completion.
It was informed that approval of Environmental Impact Assessment and Social Assessment (ESIA) is a critical path activity for the timely financial close of the project. The project company will submit the ESIA to in current month for approval in December 2024. In this context, the company is required to submit the study as per schedule and keep PMO posted for facilitation with chief secretaries of Balochistan and Sindh for timely approvals of it.
During discussion on land lease deed (fan sediments) and construction of water pipeline corridor, it was apprised that RDMC had applied to chief secretary –Balochistan in December 2023 for the water NOC and land acquisition for the construction of pipeline. The lease was approved by the chief minister Balochistan in July 2024; however, the lease deed has to be signed within current month to ensure the scheduled completion of revised feasibility study of the project by end of December 2024. Water abstraction permit application will be approved next month.
The sources said during discussion on port handling facilitation at Port Qasim, it was stated that RDMC is needed to build loading/ unloading facilities at the PQA. This facility will be connected with Pakistan’s Railway network and is a critical element of the Track Access Agreement between Pakistan Railways and the Reko Diq Mining Company. Both Pakistan Railways and RDMC do not possess land at PQA to build/ construct such a facility. The representative of Pakistan Railways expressed the Railways Division’s intent to engage with PQA (MoMA) and other relevant stakeholders for the land acquisition/lease. With this context, Pakistan Railway to coordinate with the MoMA (PQA), MoI&P, RDMC and relevant stakeholders to kick-start the process.
On captive power plants generation and operations, the RMDC said that the project needs 180-MW in the first phase (2024-2028) and the company will establish the captive power plants to fulfil power requirements. For the second phase (2028-2038), the company may require up to 400-MW; however, exact power requirement will be available once the revised feasibility study of the project is completed by December 2024, the RMDC will then share power requirements with NTDC/ Power Division.
According to the Petroleum Division, the draft Mines and Minerals Act-2024 will be presented to the Special Apex Committee of the SIFC in the coming weeks for approval.
The Ministry of Interior and the project company (RMDC) will coordinate for the implementation of the security framework agreed upon as part of the reconstitution by resolving pending issues. The movement of project staff and contractors may be facilitated by the Ministry of Interior in coordination with relevant agencies.
The sources said that the RDMC has targeted the completion of the revised feasibility of the project by December 2024 with Board approval of the study on March 2025. All relevant stakeholders including the project company will ensure the timelines.
According to RMDC, the project surface rights lease issued as part of the reconstitution is to be amended to provide additional fan sediments lease for operations of water supply and additional aquifer leased for operations of water supply. The government of Balochistan may facilitate the project company accordingly.
The company is also of the view that the agreed regimes (export processing zone/ customs regime) of the project need to be implemented at a working level for the development of the project. The company will provide further details for facilitation by the FBR.
On the issue of project airport approvals including jet fuel storage, the RMDC said that exact approvals beyond fuel storage are to be confirmed. The project will re-fuel and store light aircraft at the site to facilitate employee movements within Pakistan. The project is considering direct flights to a site which would require approvals from relevant authorities and the establishment of requisite facilities.
The company further stated that construction explosives permit for civil/ earthwork-related work programmes and operations explosives permit for drilling, blast and mining work programmes are required.
The meeting directed that the Ministry of Industries and Production and the Ministry of Interior to facilitate, accordingly.
Copyright Business Recorder, 2024