Islamabad: Pakistan must shift its focus from exporting raw critical minerals to developing processed, value-added and ESG-compliant mineral products in order to boost foreign exchange earnings and achieve sustainable economic growth, according to a policy note issued by the Institute of Cost and Management Accountants of Pakistan (ICMA).
The policy note, released following Pakistan’s first-ever shipment of critical minerals to the United States in October 2025, acknowledges the export as a historic milestone but stresses that the real economic opportunity lies beyond raw extraction. ICMA emphasized that without domestic processing, refining, and compliance with global Environmental, Social and Governance (ESG) standards, Pakistan will be unable to fully benefit from its vast mineral wealth.
ICMA identified key challenges that must be addressed to unlock the sector’s true potential, including fragmented governance, unclear regulations, inadequate infrastructure, limited local processing capacity, security and political risks, weak environmental and social oversight, and a shortage of skilled mining professionals. Addressing these gaps, it noted, is critical for building investor confidence and attracting long-term capital.
“Mineral exports alone cannot drive economic transformation,” the policy note stated, calling for a decisive transition toward integrated, ESG-compliant mineral value chains. ICMA stressed the need for a harmonised national mineral policy, transparent regulation, technology-enabled oversight, and strong international partnerships to convert mineral wealth into sustainable growth, industrial diversification, and stronger foreign exchange inflows.
Pakistan formally entered the global critical minerals market on October 2, 2025, when it dispatched its first shipment of enriched rare earth elements and critical minerals to Missouri-based US Strategic Metals (USSM) under a $500 million agreement. The consignment included antimony, copper concentrate, and rare earth elements such as neodymium and praseodymium, marking the beginning of a long-term collaboration between USSM and Pakistan’s Frontier Works Organisation (FWO). Signed in September 2025, the agreement envisages an integrated domestic value chain covering exploration, processing, and refining to maximise local value addition.
Despite possessing substantial deposits of copper, gold, chromite, and rare earth elements, Pakistan’s mining sector has historically contributed less than 3 percent to GDP. ICMA noted that the shift toward value-added mineral exports represents a strategic reorientation, though meaningful economic impact is expected to materialise gradually — over a 2–3 year demonstration phase, followed by 5–7 years of moderate scaling, with full impact anticipated beyond a decade. Full value addition, it said, could significantly enhance industrial output and foreign exchange earnings over the next ten years.
Pakistan’s total mineral wealth is estimated at $8 trillion, spread across 600,000 square kilometres, encompassing 92 identified minerals, of which 52 are commercially extracted. A cornerstone of this potential is the Reko Diq copper-gold project, one of the world’s largest untapped reserves, with production expected to begin in 2028 and capacity expansion planned through 2034.
ICMA further highlighted that initiatives such as the Pakistan Mineral Investment Forum and the National Mineral Harmonisation Framework, along with growing international engagement under CPEC and interest from Saudi Arabia, are drawing global attention to Pakistan’s mineral sector. However, it stressed that sustained progress will depend on policy consistency, institutional coordination, and strong mineral governance.
The policy note also underlined the strategic importance of Pakistan’s emerging partnership with the United States, which offers a framework for responsible exploration, processing, and refining while leveraging technical expertise and market access. By prioritising strategically critical minerals and embedding ESG principles throughout the value chain, Pakistan can strengthen bilateral cooperation, enhance investor confidence, and position itself as a responsible contributor to global critical mineral supply chains and the clean energy transition.
In this context, a delegation of the US government-funded Critical Mineral Forum (CMF) visited Pakistan in late October, engaging with Finance Minister Muhammad Aurangzeb and other stakeholders to explore cooperation in mineral development, supply-chain security, and responsible investment, amid Washington’s growing concerns over China’s dominance in rare earth materials.
Story by Khaleeq Kiani
