ISLAMABAD – In a significant policy shift with global economic implications, Pakistan has announced a new, transparent, and inclusive mining policy that opens up multi-billion-dollar investment opportunities to all countries, including rival global powers like the United States, China, and Russia. The landmark move aims to attract foreign direct investment (FDI) in the country’s untapped mineral wealth, particularly in the gold, copper, and rare earth elements sector.
A New Era of Open Competition in Pakistan’s Mining Sector
In what the government describes as an “open-handed” approach, Pakistan’s Ministry of Petroleum has confirmed it will offer equal and non-discriminatory access to mining contracts, paving the way for a level playing field for global investors. This policy shift is part of a broader strategy to enhance Pakistan’s economic resilience, attract foreign capital, and utilize the country’s vast mineral resources to boost exports and industrial development.
Federal Minister for Petroleum Ali Pervaiz Malik, while speaking to media representatives, emphasized that “no country will be discriminated against,” and that the mining contracts will be awarded purely on merit through competitive bidding.
Key Highlights of the New Mining Investment Policy
- Equal Access for All Nations: The new policy ensures that no geopolitical rivalries will interfere with Pakistan’s economic cooperation. The U.S., China, Russia, and other global powers are all welcome to participate.
- Transparency in Bidding Process: Contracts will be awarded through open bidding rather than backdoor deals or politically influenced arrangements.
- Focus on High-Value Projects: Emphasis is being placed on large-scale mineral reserves such as the Reko Diq Gold and Copper project, as well as untapped resources in Balochistan, Gilgit-Baltistan, and Khyber Pakhtunkhwa.
Reko Diq: The Jewel in the Crown of Pakistan’s Mining Ambitions
The Reko Diq Gold and Copper Project, located in the Chagai district of Balochistan, is one of the largest undeveloped copper and gold reserves in the world. The project’s potential value runs into billions of dollars, and the government is positioning it as a model for future investments.
Minister Malik stated,
“Reko Diq is not just a mining project. It is a strategic economic opportunity. It will open new doors of investment and become a role model for how Pakistan deals with global investors.”
Currently, Canadian mining firm Barrick Gold is leading the development of Reko Diq under a revised deal that ended a years-long legal dispute. However, the broader mining landscape remains open to new investors, with several other sites awaiting exploration and development.
US-Pakistan Webinar Signals Warming Business Ties
In a recent initiative to attract American investment, the Ministry of Petroleum organized a high-level webinar with U.S. officials and corporate executives. The event, focused on joint exploration and mining projects, was part of a broader effort to improve Pakistan’s image as a viable destination for American capital.
The webinar is seen as a strategic step in engaging U.S. companies, many of whom have expressed interest in rare earth minerals and critical raw materials essential for green energy technologies, semiconductors, and defense manufacturing.
Equal Invitation to Russia: Diversifying Economic Ties
To underline Pakistan’s neutral stance, Minister Malik confirmed his visit to Russia, where he extended similar investment invitations to Russian mining firms. He reiterated that when the bidding process begins, any company, regardless of its country of origin, will be allowed to participate.
This approach reflects Pakistan’s desire to balance its geopolitical relationships with economic pragmatism. Amid rising U.S.-China tensions and evolving global energy dynamics, Islamabad’s inclusive strategy could help it benefit from multiple sources of investment while avoiding alignment with any one bloc.
Energy Sector Challenges: LNG Crisis and Policy Criticism
While the mining policy brings optimism, Pakistan’s energy sector remains in crisis. Minister Malik also addressed issues related to the LNG (liquefied natural gas) shortage, which has severely impacted industrial output and energy availability.
Blame on Previous Government
The minister attributed the ongoing LNG crisis to what he termed as “flawed long-term agreements” signed by the previous administration with Qatar. One such contract, set to expire in 2026, is now under review.
“We intend to reassess the Qatar LNG deal as part of our effort to balance energy imports with domestic production,” he stated.
Discontent Over Power Division’s Role
The petroleum minister criticized the Power Division for not accepting the required volume of gas, which has worsened the circular debt and led to production cuts.
- The Power Division allegedly reduced the LNG take-or-pay guarantee from 60% to 50% without consensus, disrupting supply chain commitments.
- This action is said to have forced the government to halt production of 300 mmcfd (million cubic feet per day) of local gas, increasing reliance on expensive imported LNG.
Circular Debt and the IMF’s Zero Deficit Target
Pakistan’s persistent circular debt—now estimated to exceed Rs2.7 trillion—is another challenge the minister highlighted. Malik confirmed that Pakistan is working under the IMF’s zero fiscal deficit target, which requires difficult austerity measures and revenue generation strategies.
As part of these reforms, the government is forced to rationalize subsidies, increase utility tariffs, and focus on cost recovery in both the gas and electricity sectors.
Iran-Pakistan Gas Pipeline: Awaiting US Sanctions Waiver
On the subject of Pakistan’s controversial energy cooperation with Iran, the minister revealed that a ministerial committee is currently reviewing options for seeking a U.S. sanctions waiver to proceed with the stalled Iran-Pakistan gas pipeline project.
The matter is being handled diplomatically through mediation in Paris, where discussions with international stakeholders are ongoing.
When asked why India and China are allowed to import energy from Iran while Pakistan faces hurdles, Malik explained that those countries “are not part of the IMF program,” allowing them greater policy autonomy. Pakistan, however, is bound by IMF conditions that require it to tread carefully on international sanctions.
Implications for Pakistan’s Economic Future
Pakistan’s revamped mining policy signals a strong commitment to attracting FDI and integrating the country into the global minerals market. The initiative could unlock:
- Thousands of new jobs, especially in underdeveloped provinces
- Technological transfers and joint ventures with foreign firms
- Massive foreign exchange earnings through mineral exports
- Boosts to ancillary sectors like transport, manufacturing, and services
However, the success of the policy will depend on execution, transparency in the bidding process, and political stability.
Conclusion: Balancing Global Interests with National Development
With its inclusive mining policy, Pakistan has taken a bold step toward economic diversification and international collaboration. By offering equal investment opportunities to rival powers like the United States, China, and Russia, the country is crafting a non-aligned but economically driven strategy that could redefine its global partnerships.
Yet, this progress must be balanced with resolving internal energy sector issues, reducing fiscal deficits, and navigating complex geopolitical challenges like Iran-related sanctions. Only through transparent governance, consistent policies, and institutional reforms can Pakistan realize the full potential of its mineral wealth and energy reserves.
