US can tap into Pakistan’s critical mineral riches

Pakistan bristles with mountains of minerals containing lithium, copper, and rare earth elements (REEs) and others that are critical for electric vehicles, semiconductors, aerospace, and defense industries, but for want of proper financing and infrastructure, these resources remain underexploited.

A rising focus of Pakistan's government on developing infrastructure and the mining sector makes the country open for Foreign Direct Investment (FDI). This is where the US has a chance to act before other countries make better use of these resources first.

When it comes to the country's underdeveloped mining industry, the country’s mining bristles with an array of the most essential minerals, but it has limited development, which puts it as one of the last few markets for extensive investment.

Treasures of these resources entail lithium --- critical for the electric vehicle batteries and renewable energy sources like solar panels and wind turbines; rare earth elements (REEs) --- critical for advanced electronics, defense, and telecommunications; copper ---- used in the electric grid, wiring, and infrastructure and gold --- a key asset for trade and economic development.

On top of that, the government reforms and investment incentives are attractive. With a view to facilitating foreign investment, the Pakistan government as a step to harness its mining potential has implemented tax deductions for companies engaged in mining and for other investors; lenient laws meant to promote searching for minerals and mining and bilateral treaties to promote international investments.

What’s more, there are potential US market benefits as the port of Gwadar creates unfettered export opportunities because it is a deep sea port. The China-Pakistan Economic Corridor (CPEC) can be expanded to accommodate the logistical border needs of mining. Pakistan as a mineral supplier is also conveniently positioned because of proximity to the markets of China, India, and the Middle East.

Making investments in Pakistan, the US can have access to critical minerals required for its (American) products, while scaling down dependency on China as a supplier and above all Pakistan being a strategic location, the US may make full use of control of the mineral trade routes in the world.

The skyrocketing demand of the world for minerals will need new and modern technologies and Pakistan which can be dubbed as an emerging mineral powerhouse because of its rich mineral deposits and may be a useful strategic partner for the US, while strengthening alternative supply chains in the world.

In the past, resource planning carried out by the US has overlooked Pakistan. But now, there is urgency with ongoing talks with Ukraine and high expenses in Australia and Canada.

Given Pakistan’s considerable untouched reserves, inexpensive extraction, and supportive investment conditions, the country is well positioned as a partner for long term resource security.

As far as a strategic and economic imperative is concerned, the world is seeing an increase in demand for rare earth minerals due to shifts towards clean energy, new technological innovations, and military modernization. The US needs to move quickly to make Pakistan a major mineral partner before China, Russia, or other global competitors solidify their presence within the area. Meeting business demands in Pakistan augurs well in terms of investment, cost effective and stable supply chain of minerals.

The Economist has reported that US President Donald Trump’s quest for critical minerals has taken him from Greenland to Ukraine. He is not alone in wanting more metals, which will be needed for everything from increased electrification to more and bigger artificial intelligence (AI) data centres and sturdier power grids.

According to BCG, a consultancy, about a fifth of the minerals thought to be required by 2035 have yet to be found. Billions of dollars are being invested in trying to find new deposits, but few people know where all the required minerals will come from.

Dr Sultan Ahmed Khoso, PhD and expertise in Minerals Processing Engineering and assistant professor at the Department of Mining Engineering, Mehran University of Engineering and Technology (MUET) Jamshoro, said Pakistan is blessed with most of the mineral resources.

He said large-scale mining of coal, gold and copper is taking place in various parts of Sindh and Balochistan, many other minerals such as chromite, iron, zirconium, lead, zinc, cobalt, titanium, manganese, lithium and other rare earth elements (REEs) remain untapped.

He said Pakistan is a hub for mineral investments but developing untapped minerals requires expertise, advanced technology and infrastructure.