In Karachi:

After two state-owned companies holding stakes in Reko Diq announced that they would hire advisers to engage with foreign investors, Pakistan has begun efforts to attract billions of dollars in foreign investment from friendly nations, including Saudi Arabia, in copper and gold mining.

On Thursday, Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) reported to the Pakistan Stock Exchange (PSX) that their boards of directors had evaluated the possibility of engaging sovereign foreign investors in the Reko Diq project and had appointed advisers through Pakistan Minerals (Private) Limited to assist.

Neither the brief notification nor any more details were provided about potential investors.

Fahad Rauf, Head of Research at Ismail Iqbal Securities, recalled Saudi Arabia’s interest in taking a stake in Reko Diq. “The government of Pakistan is expected to acquire shareholdings. “The federal government holds a 25% stake in Reko Diq through three state-owned companies, OGDC, PPL, and Government Holdings (Private) Limited (GHPL).

A record profit of Rs224.6 billion is earned by OGDC

Canada’s Barrick Gold holds a 50% stake in the Balochistan project, while the Balochistan government holds the remaining 25%.To boost the country’s foreign exchange reserves, the two companies are likely to sell their stakes to foreign investors. The copper and gold mining project is owned by each of them to the tune of 8.3%.

In March 2022, Antofagasta of Chile, which wanted to quit the project, paid the three companies each $187.5 million to settle payments.He estimated that Pakistan could instantly attract $600 million from Saudi Arabia by selling 25% of its stake.A team of advisers will assist state-owned companies with the actual valuation of their stakes. As well as inflation, the rupee-dollar exchange rate affects the valuation.”

When the three companies took stakes in the project, the rupee was worth 180-190/$. The exchange rate is currently hovering around 290/$, he said, adding that the rate would be crucial in determining the initial investment.

More than a dozen Baloch students have been selected for the Reko Diq ‘International Graduate Programme’

“The project could attract billions of dollars over the course of 40 to 50 years.”

In terms of investment and net earnings, another analyst said the Reko Diq project could easily generate $8-10 billion a year.After a World Bank tribunal waived Pakistan’s $11 billion penalty, the government awarded the development contract to the Canadian company.