The Special Investment Facilitation Council (SIFC) has granted approval to enlist consultants for the purpose of reducing the shareholdings held by Pakistan and Barrick Gold Corp (NYSE: GOLD) in the Reko Diq project, favoring Saudi Arabia’s involvement.
The decision was reached during a meeting of the Apex Committee of SIFC, which was chaired by Prime Minister Shehbaz Sharif and convened last week.
According to the resolution, the reduction in shareholdings must be executed in a manner that ensures equal reduction of shares for both Pakistan and Barrick Gold.
In earlier developments on August 8, 2023, Barrick’s CEO Mark Bristow conveyed in an interview with Reuters that the company was open to the idea of Saudi Arabia’s sovereign wealth fund becoming a partner in Pakistan’s Reko Diq gold and copper mine.
Bristow categorically dismissed a June media report indicating potential talks between Barrick and fellow Canadian miner First Quantum Minerals for an acquisition, terming it a mere “rumor.”
Barrick Gold currently holds a 50% stake in Pakistan’s Reko Diq mine, with the remaining 50% ownership being divided between the Pakistani government and the Balochistan province. The mine is considered by Barrick as one of the world’s largest untapped copper-gold regions.
Bristow emphasized that Barrick does not plan to dilute its equity in the project. However, he expressed willingness if Saudi Arabia’s Public Investment Fund (PIF) expresses interest in purchasing the equity held by the Pakistan government.
Pointing out the strong bilateral relationship between Saudi Arabia and Pakistan, Bristow added that Barrick, as the controlling entity of the project, holds the primary right of refusal.
He further stated that Barrick would support the PIF’s entry into the mine through Pakistan’s 25% equity share.
While Pakistan has not publicly announced any intention to sell its stake, the country recently hosted officials from Saudi Arabia in a mining conference held in Islamabad, where representatives from Barrick were also present. It is worth noting that Barrick and Saudi’s state-owned mining company Ma’aden jointly operate a copper project in Jeddah.
Saudi’s Public Investment Fund has been actively seeking investments in copper projects globally as part of its commitment to fund energy transition initiatives. The fund recently finalized an agreement to acquire a 10% stake in the Brazilian mining firm Vale’s base metals business.
Barrick, recognized as the world’s second-largest gold producer, views Middle Eastern sovereign wealth funds as substantial, long-term investors who align with the company’s strategy of expanding its copper and gold business over the long haul.
Commenting on the speculation surrounding First Quantum Minerals, Bristow asserted that Barrick’s growth strategy would center on organic production and prudent acquisitions. He clarified that the company’s shareholders are primarily focused on gold, hence dispelling rumors suggesting interest in First Quantum.
“We have people suggesting us First Quantum, but our shareholders are gold bulls,” Bristow remarked. “So I don’t know where that rumor came from, it was definitely not us, but that certainly helped lift their shares up.”