Bye oil, hello rare earths!

Unrivalled advancements in technology have transformed rare earth elements (REEs) into a strategic tool not only to produce high-tech defence equipment but also aggrandise innovation-led economic growth in the countries of endowment. These developments have drastically altered the world energy landscape, didactically shifting focus from crude oil to rare earths.

China's comparative advantage in the REEs endowment has created restlessness in Global North not only to maintain its political control over Global South but also to address bottleneck engineering problems using green energy and advanced technology. The situation is further exacerbated by China's policy restrictions on the REEs export. A rudimentary problem with most of the countries from Global South, holding REEs endowment, is poor governance in terms of weak institutions, dictatorship, political instability and corruption.

Consequently, Global North finds it convenient to justify their invasions of the Global South countries rich in rare earths and hydrocarbons. The recent Venezuelan crisis, for instance, can be linked not only with the country's huge oil reserves but also South America's lithium triangle containing the world largest lithium reserves in Argentina, Chile and Bolivia. The use of lithium batteries as a main source of portable energy storage, particularly in consumer electronics, aerospace and defence equipment, has strategically changed the world power dynamics on the political and economic fronts.

On the political front, Global South countries with prodigious REEs endowments, and not strategically aligned with Global North, face violent conflicts, political instability and denigrating wars as part of Global North's economic strategy.

The REEs rich Global South usually exhibit quotidian conflicts making it easier for Global North to directly control the REE resources either through military power or easy and convenient terms and conditions. Furthermore, Global North has historically been reluctant in sharing their mineral extraction technologies with Global South. It is because the REE endowments and the processing technology to refine them are two mutually conjoined regimes requiring highly specialised focus individually and collectively.

Geologically, the REEs are not found as native elemental metals as they are part of the host mineral's chemistry. Therefore, their extraction must be carried out through technologically advanced labyrinthine processing methods capable of chemically disassembling the minerals holding the REEs. Most of the Global South countries with REE endowments, therefore, rely on the advanced technologies developed by Global North. Similarly, Global North's dependence on REEs is increasing day by day as it aspires to maintain its technological superiority over Global South.

On the economic side, therefore, the business relationship between the natural resource rich Global South and technologically advanced Global North is determined either by cooperation or conflict. The cacophony of conflicts and political tensions in the Middle East, Africa, Greenland and South America exhibit a strategic rationality-power interplay aimed at maintaining the Global North's politico-economic hegemony by controlling Global South's REEs.

Prof Mansoob Murshed reviews a rational choice between greed and grievance as a cause of conflict. In a book, Conflicts over Natural Resources in the Global South: Conceptual Approaches, he argues that economic dependence on certain types of resources and its associated weak institutions is more likely to produce conflict. Against this backdrop, it is critical to evaluate how Pakistan can optimally exploit REEs, avoid conflict and aggrandise economic growth.

Geologically, Pakistan has been the central point in the world's ancient history. The formation of the Himalayas when the Indian plate collided with the Eurasian plate some fifty million years ago was a major factor towards the formation of REEs. Extensive continental magmatism resulted in the formation of alkaline igneous rocks and carbonatites in the Peshawar Plain Alkaline and Igneous Province where the occurrences of REEs is already known.

In addition, there are certain other areas that have the potential for future REEs prospecting and their optimal exploitation. The extraction of REEs from placer deposits along the coastal lines of Sindh and Balochistan, for example, remains a major resource for any high-tech prospecting survey in future. Similarly, the extraction of bauxite in the Salt Range, Upper Indus Basin and Ziarat also requires sophisticated geophysical data collection and analysis. Mansehra granite also has the potential to hold extensive reserves of ion absorption clay deposits for extracting REEs. Rare earths, as the nomenclature infers, are actually not rare. They are likely to be pervasive in Pakistan because of the country's highly dynamic geological activism during late Cretaceous or early Tertiary times.

Avoiding REEs-led conflict, furthermore, requires a deeper understanding of how power and strategic interests frame international relations. For this purpose, Pakistan must focus on balancing institutional power and ensuring political stability in the country. The literature shows that dictatorial policies would ultimately result in domestic or international conflicts in the countries with REEs endowment. It is because dictation discourages rationality which in turn challenges power causing conflicts.

Furthermore, any strategic alignment of a weak economy from Global South with a strong economy of Global North would not be sustainable in the long run – further deteriorating inter-institutional power relations in the weak economy, besides promoting rent-seeking behaviour and corruption. However, weak and strong economies both from Global South may successfully collaborate for the innovative use and export of REEs. Against this backdrop, a strategic cooperation between China and Pakistan on the REEs-led joint ventures and management may minimise future conflicts in Pakistan.

Contrary to Marion Hubbert's archaic Peak Oil hypothesis, the optimum point of oil production never reached because of new oil discoveries in the world. However, rapid technological advancements are fast reshaping the future economic growth requirements which means lesser dependence on crude oil and a greater focus on REEs. Rapid advancement in high-tech industries on the fronts of AI, advanced telecommunications and quantum computing is increasingly rendering physical distances meaningless. These developments are fast-changing energy demand and supply dynamics for physical mobility. That means the demand for portable energy will exponentially increase in future both for economic growth and military modernisation.

Pakistan has a comparative advantage of holding large REEs endowment, but it requires a sharp-witted policy approach capable of transforming this natural treasure into innovation-led economic growth through the collective wisdom of federal and provincial stakeholders.