ISLAMABAD:

The civil-military run Special Investment Facilitation Council (SIFC) has approved hiring of consultants to reduce shareholdings of Pakistan and Canada’s Barrick Gold equally in favour of Saudi Arabia in the Reko Diq gold and copper mine project.

The formal decision to bring in another country in the Reko Diq project was taken this week by the apex committee of the SIFC, highly placed sources told The Express Tribune.

Prime Minister Shehbaz Sharif had chaired the apex committee meeting –- a forum which was also attended by Chief of the Army Staff General Asim Munir.

Last month, The Express Tribune had reported that the SIFC in principle approved 28 projects worth billions of dollars that would be offered to Gulf countries for investment, including the construction of the Diamer-Bhasha dam and mining operations at Reko Diq in Balochistan’s Chagai district.

The government officials said that in his last meeting as the SIFC chairman, the prime minister mandated the Ministry of Energy to hire financial advisers to offer shares in the Reko Diq mining project to prospective investors.
According to the decision, the reduction of shareholdings should be done in a manner that the shares of Pakistan and Barrick Gold are reduced equally.

Barrick Gold owns a 50 per cent stake in Reko Diq mine, with the remaining 50 per cent owned by the governments of Pakistan and Balochistan.

The prime minister also decided that the SIFC would work with the logo of Rising Pakistan – a title that reflects the aspirations of the civil and the military leadership to use the forum to get rid of the country’s dependence on external loans.

Pakistan has set up the SIFC to foster synergy between the federal and provincial governments in an effort to facilitate timely decision-making; avoiding duplication of efforts; enhancing investor confidence, and ensuring swift project implementation.

The apex committee of the SIFC further decided that the Ministry of Energy would also recommend a negotiation committee to initiate talks with Saudi Arabia for making it a partner in the project.

Similarly, the Ministry of Energy would also ensure that the three state-owned entities that hold shares in the project on behalf of the federal government would start divesting their shares in the Reko Diq project.

The Government Holding Private Limited, Oil and Gas Development Company and Pakistan Petroleum Limited hold shares in the mining project on behalf of the federal government.

The SIFC has given a December 25, 2023 deadline for concluding the transaction, including the signing of bidding documents, according to the Ministry of Energy officials.

However, Barrick Gold Chief Executive Officer Mark Bristow told this week that “Barrick won’t be diluting its equity in the project but will not mind if Saudi Arabia’s Public Investment Fund (PIF) wants to buy out the equity of the Pakistan government”.

It was also decided that the SIFC would give any regulatory or legal exemption that may be needed for timely completion of the transaction by December 2023.

During the third meeting, the prime minister expressed satisfaction on the progress made by the ministries under the umbrella of the SIFC.

The SIFC acknowledged the hard work of the SIFC Secretariat secretary in achieving rapid progress.

The prime minister directed the priority areas’ ministries to firm up financial models and transaction options to attract investment in priority sectors.

The SIFC also decided that the Ministry of Information and Broadcasting, the Inter-Services Public Relations –the military’s media wing – would jointly build the positive narrative of the work being done by the council.

The PM instructed that SIFC’s focus should not be limited to Gulf countries and Pakistan’s foreign missions should also advocate the need for investment.

The government has recently amended the Board of Investment Act to give legal cover to the working of the SIFC.
An amendment has also been introduced in the Army’s Act to formalise and legalise its role in the economy.

The government has already transferred the Rs2.3 trillion worth of assets of seven companies in the Pakistan Sovereign Wealth Fund. The dividends of these companies, including three that have shareholdings in Riko Diq project, would also be used for the SIFC projects.

In order to address a major concern of the foreign investors, the SIFC decided that the Ministry of Interior would issue visas within a day on the recommendation of the SIFC Secretariat.

It was also decided that the federal and the provincial Sindh governments would jointly build the Thar Coal Railway Connectivity project within one-and-a-half years.

The SIFC also decided to increase the role of the federal government in the mineral sector, which otherwise is a provincial subject.

The Ministry of Energy has been instructed to hire consultants to devise a harmonised legal and regulatory framework for the minerals sector.

It was decided that the federal government’s role will be largely limited to a supportive role and it will help prepare model legislations, rules, and regulations that will be submitted to the Council of Common Interests for adoption by the provinces.

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