Pakistan is moving toward a major transformation of its mining sector by prioritising value-added processing of critical minerals as a pathway to boost exports, strengthen foreign exchange earnings, and support long-term economic growth. Rather than continuing the traditional approach of exporting raw resources, policymakers and industry experts are calling for the development of processed mineral products that meet international Environmental, Social, and Governance standards to secure stronger positions in global supply chains.
This strategic shift was outlined in a recent policy note by the Institute of Cost and Management Accountants of Pakistan following the country’s first shipment of critical minerals to the United States in October 2025. While the export marked a historic milestone for Pakistan’s mineral sector, ICMA stressed that the real economic opportunity lies in building integrated value chains that transform raw materials into high-value, ESG-compliant products.
According to the institute, achieving this transformation will require addressing long-standing structural challenges that have constrained the sector for decades. These include fragmented governance structures, unclear regulatory frameworks, weak infrastructure, limited local processing capacity, security and political risks, gaps in environmental and social oversight, and a shortage of skilled mining professionals. ICMA emphasised that overcoming these barriers is essential to attract sustained investment and unlock the country’s vast mineral potential.
The policy note highlighted that mineral exports alone cannot drive broad-based economic transformation. Instead, Pakistan must transition from simple extraction toward integrated value chains supported by harmonised national mineral policies, transparent regulation, technology-enabled monitoring systems, and strategic international partnerships. Such reforms, the institute noted, could convert mineral wealth into industrial diversification, sustainable growth, and stronger foreign exchange inflows.
Pakistan formally entered the global critical minerals market with a shipment of enriched rare earth elements and other strategic materials to Missouri-based US Strategic Metals under a $500 million agreement. The consignment, sent on October 2, 2025, included antimony, copper concentrate, and rare earth elements such as neodymium and praseodymium. These materials are essential for advanced manufacturing, clean energy technologies, and high-performance electronics.
The deal, signed in September 2025 between US Strategic Metals and Pakistan’s Frontier Works Organisation, envisions the development of a domestic value chain covering exploration, processing, and refining operations. The objective is to maximise local value addition and gradually position Pakistan as a reliable supplier within strategic global mineral supply networks.
Despite significant reserves of copper, gold, chromite, and rare earth elements, Pakistan’s mining sector has historically contributed less than three percent to gross domestic product. ICMA’s research suggests that while the policy shift toward value-added exports is promising, measurable economic impact will emerge over time. The roadmap anticipates a two to three-year demonstration phase, followed by moderate scaling over five to seven years, with full economic benefits expected beyond a decade.
Pakistan’s mineral wealth is estimated at approximately $8 trillion, spread across 600,000 square kilometres and encompassing 92 identified minerals, of which 52 are commercially extracted. Central to this resource potential is the Reko Diq copper-gold project, one of the world’s largest untapped reserves. Production is scheduled to begin in 2028, with capacity expansion planned through 2034, positioning it as a cornerstone of Pakistan’s future mining economy.
The ICMA also pointed to growing international interest in Pakistan’s mineral sector through initiatives such as the Pakistan Mineral Investment Forum and the National Mineral Harmonisation Framework. Engagement under the China-Pakistan Economic Corridor and increasing attention from Saudi Arabia have further elevated Pakistan’s profile among global investors. The institute stressed that consistent policy implementation, institutional coordination, and sustainable governance will be critical to maintaining this momentum.
The emerging partnership with the United States was described as a model for responsible mineral development, combining technical expertise with access to international markets. By embedding ESG principles across the value chain and focusing on strategically important minerals, Pakistan could strengthen bilateral cooperation, enhance investor confidence, and contribute meaningfully to global clean energy transitions.
In late October, a delegation from the US government-funded Critical Mineral Forum visited Pakistan to explore collaboration opportunities aimed at building secure and transparent supply chains for American industries. The group held discussions with Finance Minister Muhammad Aurangzeb and other stakeholders on responsible investment frameworks, supply-chain security, and long-term cooperation in the mining sector, reflecting Washington’s efforts to diversify critical mineral sources amid concerns over China’s dominance in rare earth markets.
Together, these developments signal a decisive shift in Pakistan’s mineral strategy — from resource extraction toward value creation — with the potential to reshape the country’s export landscape and industrial future over the coming decade.
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