At the intersection of resource sovereignty and global supply chains lies a question that Pakistan can no longer defer: in a world reordering itself around access to critical minerals, will Pakistan leverage its subterranean wealth or remain tethered to extraction without transformation?
Rare earth elements (REEs), despite their unassuming name, underpin the infrastructure of the 21st century, from the magnets in electric vehicles to the guidance systems of precision missiles. Their geopolitical centrality has been thrown into sharp relief by China’s dominance of global supply chains.
As of 2025, China controls over 85% of the world’s REE refining capacity and recently imposed new export restrictions on seven categories of rare earth magnets, directly targeting U.S. and European defence industries. In response, the United States and its allies are scrambling to build alternative supply chains, investing billions in domestic mining, recycling, and diplomatic mineral alliances.
While much has been written about this Sino-American critical minerals rivalry, less attention has been paid to states like Pakistan, whose resource-rich geology positions them not as peripheral actors, but as latent arbiters of tomorrow’s mineral world order. Pakistan’s mineral sector contributes less than 3% to GDP, despite sitting atop an estimated $6 trillion in untapped resources, according to statements made during the Pakistan Minerals Summit held in Islamabad in April 2025.
Pakistan’s copper, lithium, and rare earth reserves, particularly in Balochistan and Gilgit-Baltistan, remain largely untapped, suspended in a policy vacuum that neither activates their potential nor shields them from strategic capture. At the centre of this potential is Reko Diq, a copper-gold deposit in Chagai district, recently valued at over $70 billion and projected to produce 200,000 tons of copper annually once operational by 2028.
Nearby, the Saindak mine, developed with Chinese assistance, has exported copper for decades without significant local beneficiation. Meanwhile, preliminary GSP exploration identifies lithium-bearing pegmatites in Gilgit-Baltistan and brine potential in Mashkel, suggesting nascent prospects for both lithium and rare earth trace elements, though specific REE-bearing minerals have not yet been confirmed at these locales.
For Pakistan to remain a passive supplier of raw ore while others capture the high-value stages of processing, alloying, and magnet manufacturing is to replicate a colonial model of enclave extraction. The consequence is more than economic: it risks locking Pakistan into a geopolitical posture where its resources are monetised by others, its environment degraded without redress, and its provinces further alienated from development dividends. Indeed, this tension is sharpened when placed within the context of Balochistan.
There, the history of resource extraction without local empowerment has not only entrenched poverty but also fuelled political grievances and instability. Saindak’s Chinese-run operations, though operationally efficient, have been criticised for a lack of transparency and minimal reinvestment. If lithium or rare earth exploitation follows the same template, bypassing local consultation and benefits, Pakistan risks repeating a cycle of resistance and resource insecurity.
At the same time, the global stage is opening, not closing, for countries like Pakistan to assert mineral agency. As BRICS expands to include major critical mineral producers and the Shanghai Cooperation Organisation (SCO) shifts toward economic coordination, Pakistan has multilateral options beyond bilateral dependency. It could, for instance, align with BRICS’ evolving rare earth consortium efforts, or propose a strategic mineral working group within the SCO, where geological data and supply coordination are shared among members. In doing so, Pakistan wouldn’t just be selling ore; it would be co-structuring the norms and flows of 21st-century mineral geopolitics. But this requires imagination and policy readiness, not reactive diplomacy.
What then should a recalibrated strategy entail? First, Pakistan must resist the temptation of extraction-only contracts. Future mineral deals, whether with China, Saudi Arabia, or the West, should be conditioned on local value addition: refining plants, alloy production, and eventually component manufacturing. Countries like Indonesia have successfully used export bans to force domestic processing in nickel; Pakistan can adapt such measures, gradually and with safeguards. Second, technology partnerships must replace aid dependence.
While China remains a central actor via CPEC and Saindak, Pakistan should also invite processing expertise from Australia, the EU, or Japan, creating a diversified investor pool. The 2025 Pakistan Minerals Summit signalled movement in this direction, attracting stakeholders from Barrick Gold, Saudi Manara Minerals, and U.S. delegations.
Third, a Strategic Minerals Authority should be institutionalised, a body with geological, legal, and environmental competence to oversee critical mineral development. The ongoing effort to draft a Minerals Harmonisation Framework (2025) is a welcome first step, but it must be followed by implementation that balances federal coordination with provincial autonomy.
Environmental and social governance cannot be an afterthought. Rare earth extraction, especially from brines and carbonatites, is water-intensive and often toxic. Without robust oversight, Pakistan may sacrifice long-term ecological security for short-term revenue. Equally, any strategic mineral policy must foreground equitable benefit-sharing, especially in resource-hosting provinces like Balochistan and GB. No resource is truly strategic if it tears at the fabric of the state.
Pakistan, then, stands at a crossroads. The geopolitical value of its minerals has never been higher. However, minerals do not develop themselves; they are politicised, regulated, and fought over. The real contest is not beneath the ground, but in policy chambers, contract clauses, and the imagination of the state. It is to decide what kind of economy and what kind of sovereignty Pakistan intends to build.
Disclaimer: The views expressed in the article are of the author and do not necessarily represent the institute’s policy.
Authored by: Sheikh Sibghat Ullah is a recent law graduate from LUMS.
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