Riko Diq is a planned mining operation that has the capacity to save Pakistan Economy. The Balochistan province will profit economically from US$32.7 billion. This will happen over a 47-year mine’s life from the Reko Diq reconstruction project. Cailleteau Pierre is a financial advisor for Lazard Freres SAS and White & Case Law firm. He recently presented his analysis to the Pakistan judges. In his presentation to a five-judge bench, he said that the province of Balochistan would benefit from direct taxes and spending, dividends, and other financial gains. The province will receive $14.1 billion in net equity flows from participation through GoB SPV. Moreover, the province will also gain an additional $7.6 billion in free carried interest. Apart from that at least $14 billion in royalties, taxes, and other spendings could be gained.
The bench included some of the top-ranking judges in the country. These judges such as C.J Umar Ata Bandial, J. Ijazul Ahsan, J. Muneeb Akhtar, J. Yahya Afridi, and J. Jamal Khan Mandokhel. All of them heard the president’s reference to the Reko Diq project. The president claimed that the project would benefit Pakistan under the current conditions. In terms of royalties, taxes, and dividends, the public sector of Pakistan will receive the vast majority (roughly 65%). The government would give this percentage to the public regardless of the copper and gold price assumptions.
In particular, The Government of Balochistan will pay dividends to the province of Balochistan. The Government will use SPV besides royalties and taxes to pay the dividends directly.
To persuade international lenders to fund the project, the shareholders’ capacity to fulfill their financial commitment will be crucial. These stakeholders also include the state-owned businesses taking part in the joint venture with Barrick. The gold and copper ore will be refined in the region. The chief justice noted that the supreme court rarely examines such a transaction. but Lazard has advised the government of Pakistan to approach the Supreme Court to consider the judgment. The judgment was issued previously in 2013. The Court questioned the level of assurance that it should provide for the government. The supreme court disallowed the project in 2013 based on some relaxations.
The representative from the government claimed that although the Hisba Bill also raised potential complications. However, it was purely legal. The court’s primary focus, in this case, would be the legal matter related to Riko Diq.