Saudi Arabia to join Barrick Gold as partner in Pakistan’s Reko Diq mine

August 15, 2023 (MLN): The Special Investment Facilitation Council (SIFC) has approved to appoint consultants to reduce the shareholdings of Pakistan and Barrick Gold Corp (NYSE: GOLD), in the Reko Diq project, in favor of Saudi Arabia.

The decision was taken last week in a meeting by the Apex Committee of SIFC, chaired by Prime Minister Shehbaz Sharif.

As per the decision, the reduction of shareholdings should be done in such a way that the shares of Pakistan and Barrick Gold are reduced equally.

Earlier on August 08, 2023, Barrick CEO Mark Bristow told Reuters in an interview that it is open to bringing in Saudi Arabia's wealth fund as one of its partners in Pakistan's Reko Diq gold and copper mine.

He also dismissed a June media report that Barrick was in talks with fellow Canadian miner First Quantum Minerals on a possible acquisition as a "rumor".

Barrick Gold owns a 50% stake in Pakistan's Reko Diq mine, with the remaining 50% owned by the governments of Pakistan and the province of Balochistan. Barrick considers the mine one of the world's largest underdeveloped copper-gold areas.

Bristow said Barrick will not 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.

"There is a strong relationship between Saudi and Pakistan and since we control the project we have the first right of refusal," Bristow added.

He said that Barrick will support PIF coming into the mine through Pakistan's 25% equity stake.

Pakistan has not publicly stated that it is considering selling.

Earlier this month Pakistan hosted officials from Saudi Arabia in a mining conference in its capital Islamabad where officials of Barrick was also present. Barrick and Saudi's state-owned mining company Ma'aden jointly operate a copper project in Jeddah.

PIF has been looking to invest in copper projects across the world as part of its drive towards funding energy transition projects. Earlier this month, PIF agreed to acquire a 10% stake in the Brazilian mining company Vale base metals business.

Barrick, the world's No.2 gold producer, considers sovereign wealth funds from the Middle East as "serious", long-term investors to whom the company can sell its long-term vision of growing its copper and gold business.

Asked about the company's interest in First Quantum Minerals, Bristow said Barrick will stick to growing its production organically and that its acquisition strategy would be "measured."

"We have people suggesting us First Quantum, but our shareholders are gold bulls," Bristow said. "So I don't know where that rumor came from, it was definitely not us, but that certainly helped lift their shares up."

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