Saqib Tariq
The developments regarding the potential of critical minerals are reshaping the world’s economic, political, and technological landscape. In early Feb 2026, Washington convened a meeting attended by representatives from more than 50 countries to discuss concerns about securing reliable supply chains for mineral goods for clean energy, semiconductors, artificial intelligence, and defence technologies.
Currently, China dominates the rare-earth element market. It is among the top in mining, processing and manufacturing. Washington’s dependence on China poses a strategic vulnerability, as any disruption to supply could adversely affect defence systems, the automotive electronics industry, and the aerospace sector. To mitigate this risk, Washington seeks to counter China’s hegemony.
Pakistan’s participation in the meeting is a gesture of interest. Islamabad’s presence reflected not just diplomatic courtesy. But the important signals are that critical minerals are now strategic assets.
According to the geological survey, Pakistan has sufficient reserves of copper, gold, lithium, rare-earth elements, antimony, chromite, and coal. The country holds an estimated 185 billion tons of coal in Thar, while Reko Diq has major gold-copper reserves. Overall, more than 90 minerals have been identified across the country.
Despite this potential, the country’s contribution from this sector is less than 3 per cent to GDP, and mineral exports amount to roughly $1.6 billion annually, only a small share of the approximately $400 billion global minerals trade. Therefore, the gap between resource capacity and performance defines Pakistan’s dilemma.
Pakistan signed a $500 million framework agreement with US firms in September 2025 for the development and processing of critical minerals. Shortly afterwards, Pakistan dispatched its first shipment to the United States. Even though the initiative is still on a small scale but showing that the country is ready to take part in international supply chains.
Pakistan offers three advantages to Washington. First is access to the underdeveloped mineral reserves, a good strategic location that connects South Asia, Central Asia, and the Middle East and an opportunity to reduce supply chain concentration. Pakistan also has the opportunity to gain desired benefits, such as economic transformation.
If the sector is properly managed, it could generate billions in export revenue, create skilled jobs and enhance capacity building in the minerals processing and refining areas where global value addition is highest. However, the mineral revenue does not automatically decide the destiny of Pakistan’s prosperity; governance determines real outcomes.
If we evaluate mineral governance in Pakistan comprehensively, it reveals structural challenges. such as institutional fragmentation, which leads to ambiguity. after the 18th constitutional amendment. The province has the right to its mineral resources, while the federal government maintain the policy oversight. This type of unclear and overlapping jurisdiction often causes bureaucratic delays and inconsistent licensing procedures, this condition create investor uncertainty.
Even though a legal framework existsnayatft@gmail.com, the implementation is still weak. The national mineral policy has big goals in practice, but the rules are not applied consistently. The complaints of the investors are usually about too much paperwork, slow approvals, and unclear procedures, which makes them uncertain and hesitant to invest.
Similarly, problems with transparency, illegal mining, weak accountability, and declining state revenue have led to the public losing trust.
Pakistan has not yet fully met its extractive governance framework with international transparency initiatives such as the Extractive Industries Transparency Initiative (EITI). These governance and accountability gaps reflect the need for reform.
Financial uncertainty is another major issue which complicates investment. This situation emerges due to the complex royalty systems, taxes operate at multiple levels and inconsistent application of rules, which makes it unclear about the cost of investing.
In addition, A fully digitised and transparent mineral cadaster system is essential; without it, accurate geological data remains limited, and non-transparent licensing processes often make investors hesitant to invest.
However, there are also opportunities. The demand for critical minerals is expected to grow rapidly over the next twenty years as countries shift to clean and green energy sources. For example, the production of electric vehicles requires copper, lithium, and other critical minerals.
The International Energy Agency has predicted that demand for minerals required for clean energy technologies could quadruple by 2040. For Pakistan’s mineral potential to be converted into real power, structural reforms are required:
The coordination between the federal and provincial governments is needed to ensure an effective mechanism which avoid duplication.
The financial system should be simple, clear, and easy to understand. Fair royalty rates and stable long-term rules are important to attract real investors.
The fiscal procedure should be simple, transparent, and predictable. Fair royalty rates and long-term stability agreements are important for attracting genuine investors.
Moreover, Pakistan needs to develop a modern, digital cadaster system for fair licensing and access to geological data.
Environmental impact assessment and local communities’ inclusiveness mechanism, such as providing job opportunities, revenue sharing, and Free, Prior, and Informed Consent (FPIC), must be ensured.
Finally, Pakistan must fulfil the requirements of its involvement in international transparency initiatives, such as the Extractive Industries Transparency Initiative (EITI).
Pakistan has these minerals, but the main challenge is building a strong system to manage them well. If handled properly, the mineral sector can bring in billions of dollars from exports, create skilled jobs, and make Pakistan stronger in the world as energy and technology continue to change
If it is not managed properly, this mineral wealth will stay unused because of poor administration and weak governance. Pakistan’s minerals are a source of strength, and with good management, they can become a major strategic advantage.
The author is affiliated with the Institute of Regional Studies (IRS), Islamabad, Centre for Counter-Terrorism, Violence and Extremism Studies.
