Pakistan’s Mineral Diplomacy and Importance in the Context of Pakistan-US Ties

The Pakistan Minerals Forum was held in Islamabad on April 8–9, 2025. Representatives from several countries, including the US and China, attended this forum

Eric Meyer, senior official at the State Department Bureau of South and Central Asian Affairs, at a meeting with Pakistan Prime Minister Shehbaz Sharif and other senior officials, is supposed to have expressed interest in potential investment in Pakistan’s mineral sector. According to a statement, Meyer acknowledged “the potential of Pakistan’s mineral sector.” Sharif, on his part, highlighted the fact that if Pakistan ably harnessed its mineral reserves, it could reduce its dependence on international institutions and get rid of its external debts, which have piled up.

It would also be pertinent to point out that during a phone call between US Secretary of State Marco Rubio and Pakistan’s Foreign Minister Ishaq Dar, both discussed the potential for greater cooperation in the mineral sector.

Reko Diq, a $9 billion mine in Balochistan, which has just begun construction, could play an important role in talks between Pakistan and the US over Trump tariffs. It would be pertinent to point out that $1 billion in funding for the first half of the project is being sought from the US Export-Import Bank. The International Finance Corporation, the private-sector lending arm of the World Bank Group, has committed a loan of $300 million for the project. Significantly, 50 percent ownership of this mine is with Barrick—a New York and Canada–listed company.

Key obstacles

While the Pakistan government may try to attract US interest, it is important to point out that Balochistan and the Federal Government have been at loggerheads, with the former complaining of economic neglect and exploitation of the province’s natural resources. There has also been anger with Islamabad due to human rights violations by the Pakistan army.

The Gwadar Port, one of the key components of the China-Pakistan Economic Corridor  (CPEC) Project, is also in Balochistan and has faced opposition from the Balochistan Liberation Army (BLA).

The last few years have witnessed several terror attacks by the BLA – in some instances in Gwadar itself. The BLA attacks have been targeted at Chinese nationals working in Pakistan, and their attacks are not restricted to Balochistan. In October 2024, for instance, two Chinese nationals were killed in a bomb attack by BLA on Karachi airport. In April 2022, the BLA carried out an attack on the van of the Confucius Institute in Karachi University. There were four casualties in the attack—three Chinese instructors and the driver of the vehicle. Several other attacks have been carried out by BLA, and after an attack in August 2024, Shehbaz Sharif stated that the main attacks by the BLA were to destabilize the CPEC project and to create a division between Pakistan and China.

The progress of the CPEC project has slowed down in recent years, and China has sought greater security for its citizens working in Pakistan. This issue has been raised repeatedly during meetings at the highest levels.

The recent focus of Pakistan on trying to attract US investment in its mineral sector needs to be viewed from several dimensions. First, it needs to ensure its geopolitical relevance for the US, which has significantly reduced after US troops pulled out from Afghanistan. While a US Congressional delegation did visit Pakistan recently, in the current situation, Islamabad does not figure high on the priority list of the Trump administration. The statements made during the visit referred to strengthening economic and security cooperation, but there was nothing substantial.

Pakistan, as mentioned earlier, could also use “mineral diplomacy” as a bargaining chip for discussions on tariffs. Second, while Islamabad has moved far closer to Beijing, the attacks on Chinese nationals and the slow progress of the CPEC project have cast a shadow on ties, even though both sides would deny the same. Islamabad has thus been trying to diversify its relations, and the US remains an important one. Strained ties between Islamabad and Balochistan and recent attacks clearly indicate that while Pakistan may be making an ambitious pitch for drawing foreign investments, the security situation in the country is grim, and the risk factors for foreign investors are too high to overlook. While Pakistan has tried to point a finger for several attacks in Balochistan on external forces, it cannot overlook the disillusionment in the province. It also remains to be seen how China would view Pakistan’s recent push towards seeking US investment in its mineral sector, given the increasing tensions between both countries.

Mineral diplomacy by Pakistan is an attempt to reach out to foreign investors, but given the problems plaguing the country, any tangible success will be tough. The global geopolitical and economic flux makes this even more improbable.

[Image credit: Prime Minister’s Office, Islamabad, Pakistan.]

The views and opinions expressed in this article are those of the author.