Riko Diq - Barrick wants Pak to sell its share to Saudi

[Mirzali Khan]

All thanks to Pakistan Army

 

[flameboard]

Pakistan has a literal gold mine and they’re just handing it out like it’s game money

 

[flameboard]

The project has been over a decade in the making and is said to boast world’s largest undeveloped copper-gold deposits

https://www.mining.com/barrick-reiterates-2028-for-first-production-from-reko-diq-copper-gold-project-in-pakistan/

 

[Clutch]

Barrick open to Saudi wealth fund buying stake in Pakistan's Reko Diq project

Barrick Gold Corp is open to bringing in Saudi Arabia's wealth fund as one of its partners in Pakistan's Reko Diq gold and copper mine, Barrick CEO Mark Bristow told Reuters in an interview on Tuesday.

www.reuters.com

Nice. At least the starving Saudis will benefit. We have to think as an Ummah and give Saadiqa to the Saudi Muslim Brotherly nation.

Pakistan has a literal gold mine and they’re just handing it out like it’s game money

Pakistan is a failed corrupt banana republic of Faujistan!

All thanks to Pakistan Army

Pakistan Fauj Zindabad!

 

[epebble]

Now it is being reported on local media as well. Since there is no civilian oversight or judicial oversight on ruling military junta, they are free to do whatever they want.

And no one can even hold these generals accountable, that's why they always like puppet politician in power. Brilliant, isn't it.


View attachment 957988


So that's explains how Asim Munir was hoping to get $25 billion investment form Saudi Arabia.

Step 1) Sell $76 billion worth of Pakistani share of Riko Diq to Saudi Arabia for $25 billion.

Step 2) Use mainstream media to market this $25 billion as an investment from Saudi Arabia which was made possible only due to untiring efforts of a military leader !

Again ..... simply brilliant.


@waz @LeGenD @Bilal Khan (Quwa)

That number $76 billion comes from:

This would amount to a whopping $76 billion over the next 45-50 years.

While it is always a good idea to keep eyes wide open for shenanigans, A revenue of $76 billion over 5o years is not the worth of Pakistan's share. First, the amount means nothing without major investment to extract metals from mines. Second, these numbers are wild estimates far into future. The worth of shares depends on expected profitability of the project. Till someone can show good profitability, the project will remain on paper. Next, it will depend on the willingness of an investor to sink in huge amount of capital with the hope of earning profit for a long time. There are many challenges between the cup and the lips.

 

[Indos]

The reason they want to see Pakistani sell their 50 % stake is likely because Pakistan gov doesnt have the capacity to invest.

50 % stake means Pakistan must invest half of total investment.

The stake of course will not be bought by Saudi at 25 billion USD lol

The price of Pakistan 50 % stake I believe will not exceed 1.5 billion USD, it coul be less than 1 billion USD since it is not being developed yet (no big investment yet being realized ).

When the investor buy the stake, the investor has the obligation to invest and it can be really huge.

When Pakistani sell the stake to the right and capable investor then what Pakistan will get is faster development of the mine and Pakistan can get royalty and tax income, USD, plus the operation cost like salary for workers, etc.

That Brazilian investor will not ask Pakistan gov to sell its stake if Pak gov commit on its obligation to invest 50 % of the mine development cost because it has 50 % of the mine stakes/ownership.

I will give one example, PT Pertamina bought 30 % share of Shell stake in Abadi gas field at around 400 million USD. It is not even one buying out scheme but through several payment instalment. That 400 million USD is just buying the 30 % stake of new gas field (not yet being developed). For that 30 % stake, Pertamina must be ready to invest 30 % of total development cost (19-21 Billion USD ) until 2028 where the development is completed. It includes building LNG refinery, gas pipe line, and others.

So with that 400 million USD, Pertamina has obligation to invest at around 6 billion USD until 2028 or 2030, so the company has to prepare around 1 billion USD per year once the development is started in 2024 or 2025.

The reason Shells want to sell their stake is because they think by investing 6 billion USD in other oil and gas field that they owned will be more profitable than investing in Abadi field.

So Why Pertamina buy the Shell stake ? It is because for Indonesia we need to have the gas field and LNG operated soon that can bring income, jobs, and also fulfil our domestic industry needs on gas, especially since it is difficult to build coal based power plant nowadays in term of the financing.

And why the stake worth of 400 million USD ? It is likely to cover the investment cost of the initial development of the gas field that have already been spent by Shell + some profit for Sheel as credit for them who has initiated the seach together with Inpex from Japan which had 60 % stake.

That is just an illustration of Abadi gas field in Indonesia that needs to build LNG refinery because the out put is large, LNG form of gas will be easier to sell to various places compared to using pipe for natural gas.

If Pakistan wants to process the Gold and Chopper, I would say for large gold and chopper mine it needs at least 3 billion USD for the processing factory. It is in the assumption that current electricity is capable to power the factory. If not, then investment cost will be greater since you need to build new power plant to operate the factory.

While the extraction cost depend on how deep the Gold and Chopper reserve from the land surface and how remote the mining areas is.

Pakistani media should show the total development cost of the mine in order to avoid misuderstanding about this matter.

 

[nahtanbob]

So that's explains how Asim Munir was hoping to get $25 billion investment form Saudi Arabia.

Step 1) Sell $76 billion worth of Pakistani share of Riko Diq to Saudi Arabia for $25 billion.

Step 2) Use mainstream media to market this $25 billion as an investment from Saudi Arabia which was made possible only due to untiring efforts of a military leader !

Again ..... simply brilliant.

Pakistan considers selling Reko Diq project shares to Saudi Arabia

Pakistan is exploring the possibility of selling some of its stakes in the Reko Diq gold and copper mines to Saudi Arabia as part of an effort to secure investments from the Gulf nation.Currently,

profit.pakistantoday.com.pk

@epebble

For starters is anyone willing to pay $76 billion or even $25 billion ?

That number $76 billion comes from:

This would amount to a whopping $76 billion over the next 45-50 years.

While it is always a good idea to keep eyes wide open for shenanigans, A revenue of $76 billion over 5o years is not the worth of Pakistan's share. First, the amount means nothing without major investment to extract metals from mines. Second, these numbers are wild estimates far into future. The worth of shares depends on expected profitability of the project. Till someone can show good profitability, the project will remain on paper. Next, it will depend on the willingness of an investor to sink in huge amount of capital with the hope of earning profit for a long time. There are many challenges between the cup and the lips.

from your description it is not even worth $10 billion

 

[epebble]

from your description it is not even worth $10 billion

It is not worth $1 till someone shows a credible path to earn $1 in profit. Digging a hole in the ground and making a few tons of copper or kilos of gold is not the challenge, making it profitably is the challenge. There are plenty of unprofitable mines around the world. If Chile can produce copper at $3 per pound and you can't, there is no project. Similarly, if South Africa can produce gold at $1,500 per ounce and you can't, the project will remain on paper.

 

[nahtanbob]

It is not worth $1 till someone shows a credible path to earn $1 in profit. Digging a hole in the ground and making a few tons of copper or kilos of gold is not the challenge, making it profitably is the challenge. There are plenty of unprofitable mines around the world. If Chile can produce copper at $3 per pound and you can't, there is no project. Similarly, if South Africa can produce gold at $1,500 per ounce and you can't, the project will remain on paper.

I assumed the whole mine has economically extractable materials. Otherwise it is just dirt in the ground

 

[AZADPAKISTAN2009]

People have been mining gold and minerals with hand since 1800 and in Pakistan we could not extract Gold and Minerals for last 20 years

Until we sold stakes to foreign nations

 

[epebble]

I assumed the whole mine has economically extractable materials. Otherwise it is just dirt in the ground

It is a low grade mine. Making a profit out of that requires sophisticated technology and large plant to reduce overhead. The project has been mired in controversy and dispute since 2010.

The deposit at Reko Diq is a large low-grade copper porphyry, with total mineral resources of 5.9 billion tons of ore with an average copper grade of 0.41% and gold grade of 0.22 g/ton. From this, the economically mineable portion of the deposit has been calculated at 2.2 billion tons, with an average copper grade of 0.53% and gold grade of 0.30 g/ton, with an annual production estimated at 200,000 tons of copper and 250,000 ounces of gold contained in 600,000 tons of concentrate. According to the extensive technical financial studies undertaken, in order to secure optimal ‘economies of scale’ efficiencies, and lower mining and processing costs, a large scale, state of the art mining and processing unit is required at Reko Diq.

Reko Diq Mine - Wikipedia

en.wikipedia.org

 

[Crimson Blue]

That number $76 billion comes from:

This would amount to a whopping $76 billion over the next 45-50 years.

While it is always a good idea to keep eyes wide open for shenanigans, A revenue of $76 billion over 5o years is not the worth of Pakistan's share. First, the amount means nothing without major investment to extract metals from mines. Second, these numbers are wild estimates far into future.

That estimated $76 billion is not the total gross revenue over 35 years of operation. This figure is actually based on the contract between Government of Pakistan and Barrick Gold Corporation.

According to this contract, net profit share of the Pakistan would be $76 billion over 35 years. All capital expenditure (estimated $7-$9 billion) would be borne by Barrick Gold Corporation who would be solely responsible for developing & operating the mine. Link is at the end of this post.

Now this can be argued that Saudis would pay less than $25 billion based on their own assessments.

The Reko Diq deal finally closed. Is it a “Home Run” for Pakistan?

Barrick Gold Corporation, having won a favourable ruling from Pakistan's Supreme Court and the necessary laws having been enacted, has declared that it has finished reconstituting the Reko Diq project

profit.pakistantoday.com.pk

@Indos @nahtanbob

 

[epebble]

That estimated $76 billion is not the total gross revenue over 35 years of operation. This figure is actually based on the contract between Government of Pakistan and Barrick Gold Corporation.

According to this contract, net profit share of the Pakistan would be $76 billion over 35 years. All capital expenditure (estimated $7-$9 billion) would be borne by Barrick Gold Corporation who would be solely responsible for developing & operating the mine. Link is at the end of this post.

Now this can be argued that Saudis would pay less than $25 billion based on their own assessments.

The Reko Diq deal finally closed. Is it a “Home Run” for Pakistan?

Barrick Gold Corporation, having won a favourable ruling from Pakistan's Supreme Court and the necessary laws having been enacted, has declared that it has finished reconstituting the Reko Diq project

profit.pakistantoday.com.pk

@Indos @nahtanbob

Thank you. I read the report. That figure $76 billion seems to be the total value of copper and gold that may be extracted in the mine's lifetime. It crucially has no information at all on what would it take to produce the metals from the minerals in earth. The only information I see is:

Concerns A key concern that still requires attention is the logistical aspect of this mega project, considering the remoteness of the project site, and consequently the logistics required to make this a feasible project have to be further developed. Taking the example of the Saindak silver mine located in Chaghai, the silver ore extracted from the mine has to be transported 1,127 km from the site to the port in Karachi by trucks. That is absolutely ridiculous, as the costs associated with using trucks would have an adverse effect on the bottom line and overall feasibility of the project. If a similar plan is on the table for Reko Diq, the margins of Barrick and the Government would significantly diminish. Water was highlighted as the project’s “most critical” issue in the Risk Assessment Report pertaining to Reko Diq published by Behre Dolbear in October 2007, and Pakistan underlined it during the ICSID hearings whilst examining the feasibility of ensuring water supply. Water is most commonly used in mining to process ore and to water mine roads to reduce dust. Aquifers, surface water, collected precipitation, and even water from the mine itself, provided the mine is actively dewatered, are all possible sources of water for mining. Naturally due to the remoteness of the site location, developing infrastructure and building a sustainable water source for the next 45 years for the mining operations is a monumental challenge. Historically as Pakistanis all of us have been witness to unsuppressed corruption, inefficiencies as well as plain and simple stupidity on part of the decision makers and various government entities. The country has a chequered past of poorly executed projects and pitiful government oversight next to little or no support to investors. To compound all this, bureaucrats and politicians in positions of power never fail to get their kickbacks from projects like these.

Bottom line seems to be don't hold your breath awaiting profits from the project.

 

[Crimson Blue]

Bottom line seems to be don't hold your breath awaiting profits from the project.

Aww ...... you just demolished the sand castle of our beloved military rulers

 

[flameboard]

not the heroes Pakistan wants but the heroes Pakistan needs