Pakistan’s moment in an expanding US critical minerals agenda | OPINION

Pakistan’s long‑discussed mineral wealth, once confined to geological surveys and speculative reports, has begun to take on a more tangible shape. A convergence of global supply chain anxieties, tightening Chinese export controls on rare earth refining technologies, and renewed Western interest in diversifying critical mineral sources has unexpectedly placed Pakistan in a strategic spotlight.

The country’s first commercial shipments of enriched minerals to a US firm, coupled with a $700 million concessional loan from the International Finance Corporation and the World Bank last year, signalled that Pakistan’s minerals story may finally be shifting from potential to practice.

At the centre of this transformation lies Reko Diq, a vast copper‑gold deposit in Balochistan’s Chagai district. Long plagued by litigation, stalled contracts, and billions in lost opportunity, the project is now being revived as one of the world’s most significant future suppliers of transition metals. Pakistan is believed to hold the world’s fifth‑largest copper reserves, gold deposits worth billions, and substantial quantities of lithium, chromite, gypsum, coal, and rare earth elements (REEs). The Saindak and Reko Diq belts are among the most mineral‑endowed copper‑gold zones globally, and for the first time in decades, international capital is flowing in with renewed confidence.

Speaking at Riyadh’s Momentum 2025 Finance Conference, Pakistan’s Finance Minister Muhammad Aurangzeb had described Reko Diq as a “transformative development” for the country’s economic and energy transition future.

That momentum accelerated further on February 7, when the United States approved $1.3 billion in financing for Reko Diq during the 2026 Critical Minerals Ministerial in Washington. The funding forms part of Project Vault, a $10 billion US initiative aimed at reengineering entire global critical mineral supply chains and building strategic reserves.

Forging a new mineral frontier

Rolling out ‘Project Vault,’ to spur production and insulate producers from future supply shocks, President Donald Trump said, “We don’t want to ever go through what we went through a year ago” in reference to China’s demonstrated ability to both achieve dominance in critical minerals and control its supply. This sixty-day reserve will be backed by a $10 billion loan from EXIM Bank, along with $2 billion in private funding.

The US simultaneously announced eleven new bilateral critical mineral frameworks and concluded negotiations with seventeen more. Secretary of State Marco Rubio also unveiled the Forum on Resource Geostrategic Engagement (FORGE), which will succeed the Minerals Security Partnership. Close on the heels of Pax Silica, an initiative for secure artificial intelligence (AI) supply chains, FORGE is a “preferential trade zone for critical minerals protected from external disruptions through enforceable price floors”, as described by Vice President JD Vance. According to the State Department, the US government has mobilised more than $30 billion in investments, loans, and letters of interest over the past six months to support critical mineral projects worldwide.

Precariousness of Pakistan’s REE Ambitions

The Reko Diq project, developed in partnership with Canadian mining giant Barrick Gold, requires roughly $3.2 billion in total investment, with commercial production expected by 2028.

If executed effectively, it could generate an estimated $4–5 billion in annual revenue. The realities of mineral extraction from exploration to full production, even under optimistic assumptions, would require Pakistan to undertake five to ten years of sustained investment, policy consistency, governance reforms, political stability, and robust security to realise meaningful returns.

For investors, the challenge is not technological capability but Pakistan’s inconsistent governance, opaque regulatory frameworks, and history of unstable contracts. These institutional problems have previously derailed major projects, be it stalled oil exploration in Lakki Marwat and North Waziristan or the slow progress in Sindh, and could again undermine the country’s mineral ambitions. Reko Diq itself emerged from a six-billion-dollar penalty following contractual disputes, in a 2022 settlement which restored Barrick Gold’s role.

Security and governance challenges loom large. Many of Pakistan’s mineral deposits lie in sensitive and restive regions, Balochistan, Khyber Pakhtunkhwa, and parts of Sindh, where local resistance, political grievances, and militant activity can disrupt operations. Recent escalations in Balochistan underscore the fragility of the environment in which Reko Diq must operate.

The Balochistan Mines and Minerals Act, passed on March 14, 2025, after a similar move in Khyber Pakhtunkhwa, was designed to centralise control over provincial mineral deposits. The Act approved the creation of the Mineral Investment Facilitation Authority (MIFA), empowered to override provincial departments, under the federal Special Investment Facilitation Council (SIFC), effectively sidelining Balochistan’s authority over its own resources.

Given that the military-dominated SIFC itself lacks transparency, this is bound to rise as a governance crisis that threatens project stability. In addition to federalism issues of natural resource management, local environmental concerns that arise from REE mining are likely to be treated as secondary considerations in Pakistan’s development calculus.

Finally, can Pakistan navigate the competing pulls of the China–Pakistan Economic Corridor (CPEC) and US‑backed critical mineral frameworks? China already dominates global REE processing and has deep infrastructural and political ties to Pakistan. The US, meanwhile, is accelerating efforts to diversify away from Chinese supply chains.

For Pakistan, true economic transformation will require domestic technology transfer, joint ventures for refining and magnet production, and the training of local metallurgists and engineers. Without these, Pakistan risks remaining a mere exporter of raw ore without climbing up the value chain.

Mineral wealth alone does not guarantee prosperity. It demands vision, institutional discipline, transparent governance, and the foresight to avoid exploitative arrangements that leave the country dependent on external actors. Whether Pakistan’s establishment possesses that foresight remains an open question.

The author is a security and economic affairs analyst.

The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK.