Pakistan: the next critical minerals destination

ISLAMABAD, Oct 16 (APP): Pakistan is entering a new phase in the development of its mineral economy as rising global demand for copper, gold, chromite, lithium, rare earth elements and other critical minerals creates a strategic opportunity for the South Asian country to attract investment, develop new supply chains and diversify its sources of foreign exchange.

The opportunity is significant. Pakistan has extensive mineral-bearing areas and a geological position within the broader Tethyan Metallogenic Belt, one of the world’s important copper and gold regions. The country has 92 known minerals, of which 52 are commercially exploited.

According to the Institute of Cost and Management Accountants of Pakistan (ICMA), the country’s mineral reserves are estimated to be worth around $8 trillion and are spread across approximately 600,000 square kilometres. These resources highlight the considerable economic potential of Pakistan’s mining sector.

The mining sector has historically contributed less than 3 per cent to gross domestic product (GDP), ICMA said. The institute estimated that, with improved governance and security, annual mineral exports could increase from approximately $3 billion to $8 billion, while GDP growth could rise from around 3 per cent to 6 per cent.

The challenge, however, is to translate geological potential into commercially viable projects, exports, employment and industrial capacity. Achieving this requires more than extraction. It calls for exploration, reliable geological data, modern technology, infrastructure, financing, predictable regulations, environmental safeguards and partnerships with international companies. Pakistan’s policy direction is increasingly focused on developing this broader ecosystem.

Reko Diq Copper and Gold Project Located in Balochistan’s Chagai district, Reko Diq is one of the world’s largest undeveloped copper and gold deposits. The project is a joint venture in which Barrick Mining Corporation holds a 50 per cent stake, the Balochistan government holds 25 per cent, and three federal state-owned enterprises collectively own the remaining 25 per cent.

In February 2025, Barrick announced the completion of an updated feasibility study for the Reko Diq project. The project is expected to make a major contribution to Pakistan’s economy and have a transformative impact on Balochistan.

The updated feasibility study estimates a mine life of 37 years, with total capital investment of $8.83 billion. Development will take place in two phases, with Phase 1 requiring an estimated $5.6 billion to $6.0 billion. First production is expected by the end of 2028.

Under Phase 1, the project will process 45 million tonnes of ore annually, producing approximately 240,000 tonnes of copper and 297,000 ounces of gold each year. Phase 2, planned for 2034, will double processing capacity to 90 million tonnes annually, increasing average annual production to 460,000 tonnes of copper and 520,000 ounces of gold during its first 10 years.

According to the feasibility study, Reko Diq has probable mineral reserves of approximately 3 billion tonnes, containing an estimated 15 million tonnes of copper and 26 million ounces of gold. Barrick estimates that the project could generate $90 billion in operating cash flow and $70 billion in free cash flow over its mine life.

Reko Diq is one of Pakistan’s largest foreign direct investment projects and the largest of its kind in Balochistan.

International lenders have assembled a financing package exceeding $2.6 billion. The Asian Development Bank approved $410 million in August 2025, comprising $300 million in loans and a $110 million guarantee for Balochistan’s equity stake.

The International Finance Corporation (IFC) and the World Bank approved a $700 million concessional loan in June 2025. In December 2025, the US Export-Import Bank approved $1.25 billion in financing. The US Embassy said the financing could unlock up to $2 billion in American mining equipment and services exports and support approximately 13,500 jobs across both countries.

Once operational, Reko Diq’s first-year shipments are projected to generate export revenues of $2.8 billion.

Global Demand, Local Advantage

Global copper demand is forecast to increase by 24 per cent to reach 42.7 million tonnes annually by 2035, driven by electrification, according to Wood Mackenzie. The International Energy Agency has also highlighted the growing electricity requirements of artificial intelligence-driven data centres, which could further increase demand for copper and other critical minerals.

The European Union’s Critical Raw Materials Act and Washington’s efforts to diversify rare earth supply chains have further increased the strategic importance of developing new, reliable sources of critical minerals.

Pakistan’s mining history predates Reko Diq. The Saindak copper-gold project, developed with Chinese participation, traces its origins to aerial surveys of Balochistan in the 1950s and exploration work by the Geological Survey of Pakistan during the 1960s.

On September 8, 2025, Pakistan’s Frontier Works Organisation and Missouri-based US Strategic Metals (USSM) signed two memoranda of understanding (MoUs) focusing on the development and processing of critical minerals, including rare earth elements, as well as logistics services.

The agreements establish a framework for cooperation across a range of critical minerals essential to the defence, aerospace and technology industries.

According to the Prime Minister’s Office, the partnership will begin with the export of readily available Pakistani minerals, including antimony, copper, gold, tungsten and rare earth elements. The cooperation is intended to lay the groundwork for a USSM proprietary polymetallic refinery in Pakistan, designed to produce intermediate and finished products for the rapidly growing US market.

The first phase of the proposed arrangement envisages investment of approximately $500 million in Pakistan’s critical minerals sector.

The next steps include establishing dedicated teams to assess the potential of Pakistan’s mineral resources, identifying critical minerals for immediate export and laying the foundation for long-term cooperation in exploration, extraction and processing.

The partnership is also expected to prioritise sustainability, profitability and environmental responsibility to ensure benefits for the people of both countries.

PMIF26: The Investment Platform

The Pakistan Minerals Investment Forum (PMIF) is the government’s flagship platform for promoting investment in the country’s mineral sector and connecting Pakistan with international investors, mining companies, financial institutions and technology providers.

The forum brings together policymakers and industry leaders to showcase Pakistan’s mineral potential, facilitate partnerships and investment, and promote sustainable development and value addition across the sector.

The 2025 edition, PMIF25, attracted 5,000 delegates from more than 50 countries. The event saw the signing of 16 memoranda of understanding and featured 18 panel discussions.

The 2026 edition, PMIF26, was originally scheduled for April 8–9 at the Jinnah Convention Centre in Islamabad but was rescheduled for November 12–13, 2026, at the same venue.

Federal Minister for Energy (Petroleum Division) Ali Pervaiz Malik has said the forum aims to raise awareness about the mining sector and attract sustainable investment, noting that Pakistan’s mineral wealth has remained largely unexplored for decades.

The investment-focused platform connects governments, investors, mining companies, technology providers and other stakeholders across the mineral value chain.

PMIF26 is expected to place greater emphasis on project development, exploration, technology, value addition and investment.

Its technical programme includes geological exploration and resource assessment, remote sensing, geophysics and other technologies designed to improve understanding of Pakistan’s mineral geology.