Reko Diq Mine Development Sparks Economic Potential For Pakistan - The Pinnacle Gazette


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Recent agreements position Pakistan as a pivotal player in the global energy supply chain.
The Reko Diq mine development project promises to fundamentally reshape Pakistan's economic outlook by tapping extensive mineral resources and attracting substantial international investments. This pivotal venture has garnered significant interest, positioning Pakistan as a key player within the green energy supply chain.

Recent agreements emerged as game-changers, with Gentry Beach, the prominent US investor, and his company White Bridge Mining sealing partnerships aimed at leveraging Pakistan's immense mineral wealth. Beach highlighted, "Pakistan is home to extraordinary mineral wealth, and our investment is committed to unlocking its full potential through responsible mining and global partnerships.”

Located in Balochistan, Reko Diq is rich with gold and copper deposits, offering staggering economic benefits. The project expects to yield 400,000 tonnes of copper and 500,000 ounces of gold annually, creating approximately $74 billion in cash flow over the next 37 years. This projection reflects opportunities for job creation and foreign direct investment, much like the beneficial mining models observed in Chile and Australia.

Chile’s Codelco, for example, contributes nearly 10 percent of its GDP from copper mining, and Australia’s historical Gold Rush catalyzed significant infrastructure growth. Pakistan aims to emulate this success by encouraging foreign investments like the recent commitment from Saudi Arabia’s Manara Minerals Investment Company, which is poised to invest between $500 million to $1 billion. Such international partnerships signify rising confidence in Pakistan’s mining capabilities.

Mark Bristow, Barrick Gold's CEO overseeing the Reko Diq project, stated, "This project has the potential to transform Pakistan’s economy by fostering foreign investment and generating numerous job opportunities for its citizens.” His outlook emphasizes the long-term economic transformation expected from this mineral extraction endeavor.

Strategically, Pakistan is urged to adopt effective management frameworks and proactive policies to optimize Reko Diq’s potential. These include drawing lessons from Chile’s mineral royalties and reinvestment strategies alongside Australia’s focus on developing mining infrastructure. Such infrastructure investments—transport networks, processing facilities, and export hubs—are necessary to maximize Reko Diq's economic impact.

Transnational partnerships are also becoming feasible for Pakistan, as countries such as China express interest, along with various global mining corporations from Canada and Australia. This diversification effort is not merely about reducing dependency on one investor; it also aims to spur innovation within the mining sector and maintain competitive practices.

Given the projected high demand for minerals necessary for renewable technologies, Reko Diq stands at the forefront of this global energy transition. A 2021 Goldman Sachs report dubbed copper "the new oil,” highlighting its future significance as the world moves toward cleaner energy solutions. Such insights compel Pakistan to advocate for Reko Diq's role as central to the international supply chain for green technologies.

Alas, for the Reko Diq project to attain its ambitious goals, transparency must be at the forefront of its execution. This involves establishing clear guidelines for revenue sharing and project management, fostering trust among stakeholders, and maintaining public confidence. The government's commitment to stringent environmental regulations is also imperative, ensuring sustainable mining practices are prioritized and ecological disturbances minimized—assuring the livelihoods of local communities and the delicate environment of Balochistan remain intact.

Can Critical Minerals Redefine Pakistan-US Relations? – The Diplomat

Pakistan’s mineral wealth is vast but underdeveloped. The Reko Diq mine in Balochistan, one of the world’s largest untapped copper-gold reserves, holds an estimated 5.9 billion tons of ore. Similarly, northern regions like Gilgit-Baltistan and Khyber Pakhtunkhwa are believed to harbor lithium reserves, critical for renewable energy technologies. The Thar coalfield in Sindh, with 175 billion tons of lignite, further underscores Pakistan’s resource potential.

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Pakistan and the United States, long bound by a security-centric relationship, may be on the cusp of a transformation as Islamabad explores proposals to attract the newly inaugurated Trump administration with stakes in its critical mineral reserves and other business ventures.

The prospect gained traction when U.S. businessman Gentry Beach, believed to be close to U.S. President Donald Trump, visited Pakistan earlier this month, promising billions in investments for mining and mineral projects.

“America cares about Pakistan. And I believe that together we can be very strong,” Beach said. “And we need Pakistan. You are our front face in this entire region, very important,” he continued, expressing optimism for bright future bilateral ties and economic cooperation between the two countries.

“Pakistan has something that America needs, and America has something that Pakistan needs,” Beach said, referencing the country’s mineral reserves. “That’s a wonderful situation for both of us to be in.”

It is too early to determine if Beach’s view aligns with a policy change in the Trump-led White House. His visit comes amid widespread concern in Pakistan about Washington’s disinterest in the country, following its withdrawal from Afghanistan and the geopolitical complexities surrounding the region.

The Pakistan-U.S. relationship has historically been dominated by security cooperation, with limited economic engagement. Bilateral trade between the two nations stands at a modest $6 billion annually, heavily tilted in favor of Pakistan exports.

For Pakistan, increased U.S. investment in its mineral sector could provide a much-needed economic boost, create jobs, and enhance infrastructure development. However, the success of this implausible pivot hinges on Pakistan overcoming significant geopolitical and domestic challenges to inflame Washington’s interest in a convincing manner.

Expanding US-Pakistan Relations Through Mining Projects
by Daniel Runde, the author of the book “The American Imperative: Reclaiming Global Leadership Through Soft Power”

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Thus sourcing critical minerals must be treated as a US national security priority. China currently dominates critical mineral supply chains, refining 68 percent of nickel, 40 percent of copper, 59 percent of lithium, and 73 percent of cobalt globally. China also commands global battery cell production. Chinese supplies are vertically integrated, with battery manufacturers and smelters like CATL and Huyaou gobbling up mines across Asia, Latin America, and Africa at an unprecedented rate. This national security could be endangered.

The answer could partly lie in Pakistan. It has increasingly gone to China for loans, falling deeper into Chinese pockets, while the Biden administration chose to downgrade the US – Pakistanrelationship. Now, the incoming Trump administration can work to counter China’s control of the global critical mineral supply, by encouraging investments in Pakistani critical minerals while also reviving traditional security interests in the area.

Pakistan has vast critical mineral reserves. With the fifth largestreserves of copper in the world, it could become the “Saudi Arabia of copper” within the next 20 years. In the Balochistan region, the embattled Reko Dik mine, which underwent a long international arbitration process and only recently went under new contract, is home to one of the largest untapped copper and gold resources in the world, with an estimated 400 million tons of gold valued at over $1 trillion. There are also copper-gold deposits in less agitated regions like Gilgit-Baltistan, an isolated mountainous region at the intersection of the Himalayas, Karakorum, and Hindukush ranges

The Trump administration is arriving at an opportune time. On November 18, speaking at a USAID event, Pakistan’s Minister for Planning and Development, Ahsan Iqbal, expressed optimism about rekindling US-Pakistan relations based on “mutual respect and constructive engagement” under the incoming presidential administration.

Much of the U.S.-Pakistan relationship in recent decades has been mired in security and counterterrorism concerns. Baluchistan straddles Pakistan, Afghanistan, and Iran, and so a mineral-based US investment in Baluchistan could quickly develop into deepened US engagement with the Pakistani army, a group that has increasingly viewed normalized relations with the US as a way to distance itself from China. Through investments to develop regions like the one surrounding the Reko Dik mine, the US may simultaneously advance its interests in counterinsurgency and critical minerals.

Another obstacle in the supply chain of critical minerals is processing. There is little benefit to mining critical minerals domestically or from friendly countries if we then have to ship them off to be processed by countries like China, which dominates the processing stage. Today, China accounts for 44 percent of global copper smelting. Providing an American alternative is important. Baluchistan is home to the world’s largest deep seaport, Gwadar, which is operated by a state-run Chinese firm. If there was more investment to support increasing processing capacity in Pakistan itself, one could feasibly guarantee supply from mine to processor and then to market.