Prime Minister Shehbaz Sharif recently declared that Pakistan’s mineral reserves—claimed to be estimated between $6 trillion and $8 trillion—could serve as the backbone for an economic turnaround, stating that “our untapped resources will revolutionise our national economy and secure our future.” Such statements, while galvanizing in a political rally, merit a critical evaluation against the country’s economic realities and global competitive landscape. As recent visits by senior American officials and a phone call between Foreign Minister Ishaq Dar and U.S. Secretary of State Marco Rubio have underscored, the minerals sector is now a high-stakes battleground for geopolitical and commercial influence. But are these bold proclamations realistic within a 5- to 10-year timeframe?
Pakistan is fortunate to possess enormous mineral potential—from the world’s second-largest salt mines and expansive coal deposits to enormous copper-gold zones like Reko Diq in Balochistan. According to Reuters, the Reko Diq project is projected to generate around $74 billion in free cash flow over a 37-year horizon, with an annual output of roughly 200,000 tons of copper and 250,000 ounces of gold. Yet, these numbers represent a long-term vision; in the near term, mining and quarrying currently account for only about 2–3% of Pakistan’s GDP, and mineral exports comprise a mere 0.1% of global exports. Pakistan’s mineral rents stand at just 0.07% of GDP, underscoring the gap between resource potential and actual economic contribution.
From an economic standpoint, even if Pakistan managed to double the mining sector’s share of GDP within a decade, it would at best reach an increase of 2–4 percentage points. In an economy where manufacturing and services drive over 80% of GDP, such a boost, while helpful, falls far short of the transformative revolution suggested by PM Sharif’s rhetoric.
One of the primary barriers to harnessing Pakistan’s mineral potential is a fragmented regulatory framework. Post the 18th Amendment, provinces now have considerable autonomy over mineral resources. This has spurred competition but also created overlapping jurisdictions and bureaucratic red tape that complicate the rapid scale-up of mining operations. Until these governance issues are resolved, foreign direct investments may remain cautious, delaying projects such as Reko Diq, which is not expected to come on stream until at least 2028.
Additionally, the security concerns in resource-rich areas such as Balochistan cannot be understated. Despite repeated assurances from military leaders—including a recent statement by Army Chief General Asim Munir promising robust protections for investors—the decades-long insurgency and sporadic violence in Balochistan continue to deter confident investment. While such risks can sometimes be mitigated by high returns, they inevitably extend lead times and increase capital costs, effectively pushing transformative impacts well beyond the 5- to 10-year window.
Current mining activity contributes around 2–3% of GDP, even aggressive policy reforms and rapid project implementations may only nudge this figure to 5–7% in the best-case scenario over the next decade
Pakistan’s current mining practices are characterised by outdated technology and inefficient extraction processes. Studies have consistently shown that by relying heavily on raw mineral exports, Pakistan leaves immense value on the table. Advanced mineral processing and downstream industries—where raw materials are converted into value-added products—are essential for capturing a larger share of the potential revenue. However, establishing such processing capacities, whether for metals, gypsum, or other minerals, requires significant investment in technology transfer, infrastructure, and skill development. These are long-term projects that typically surpass the short-run horizon, meaning that any shift from exporting raw materials to producing finished goods will take time.
For instance, while the Reko Diq mine represents a dramatic case, its full benefits—including the multiplier effects on job creation and local industry development—are forecast over several decades. The immediate effect in the next 5–10 years would likely be confined to job creation during construction and a modest boost in local economic activity, which would not entirely offset broader economic deficits.
Recent diplomatic developments underscore how crucial minerals have become in international geopolitics. A senior delegation from the U.S. Department of State, led by Eric Meyer, visited Islamabad amid a drive to secure access to critical minerals, including copper, gold, and lithium, which are indispensable for technologies ranging from renewable energy storage to electric vehicles. In a phone call, Secretary of State Rubio and Pakistani Foreign Minister Ishaq Dar discussed not only trade and tariffs but also cooperation in the strategic minerals sector. Meyer’s remarks—that securing diversified sources of critical materials is a “strategic priority”—reflect a broader international trend of leveraging resource diplomacy to reduce dependency on traditional suppliers.
For U.S. policymakers, Pakistan’s vast reserves are a potential counterbalance to the concentrated global supply chains dominated by China, Australia, and Chile. Yet, this vision hinges on Pakistan making rapid strides to reduce its internal bottlenecks. Gulf states, notably Saudi Arabia—with its planned $75 billion mining expansion under Vision 2030—are also eyeing investments in Pakistani mining projects. The recent agreement for Saudi company Manara Minerals to potentially buy a stake in the Reko Diq mine is illustrative of this trend. However, such high-profile partnerships are typically structured for long-term returns and are contingent on resolving domestic issues first.
A careful, data-driven evaluation reveals that the short-term impact of Pakistan’s mining sector on the overall economy is likely to be modest.
Given that current mining activity contributes around 2–3% of GDP, even aggressive policy reforms and rapid project implementations may only nudge this figure to 5–7% in the best-case scenario over the next decade.
With mineral exports currently making up an almost negligible part of global trade, lifting this share would require not only ramping up production but also developing processing industries and modern supply chains. This is a tall order, especially since Pakistan’s current mineral rents are less than 0.1% of global exports.
Pakistan’s mineral resources undoubtedly represent an enormous opportunity, but a clear-eyed assessment reveals that the next five to ten years will likely see only incremental improvements
Projects like the Reko Diq mine, the crown jewel of Pakistan’s mining ambitions, are only set to begin production by 2028. Even if the project achieves all its stated targets, its contribution within the next 5–10 years would be limited to the initial phases of construction and early production, rather than providing an immediate macroeconomic boost.
For Pakistan to close its trade gap in minerals and add significant value, it must invest in downstream processing. Current policies indicate a long transition period, which suggests that a full value chain transformation may well be beyond the next decade.
In light of these challenges, PM Sharif’s optimistic pronouncements, while inspiring, appear overly ambitious when measured against the ground realities. The transformative economic impact promised by unlocking trillions in potential value is likely to be a gradual process, significantly influenced by improvements in governance, security, technology adoption, and international collaboration.
For Pakistan to approach the lofty goals articulated by its leadership, a multi-pronged strategy is essential:
Establishing a mineral policy framework that streamlines federal and provincial regulations is critical. Such a reform would not only attract foreign investment but also reduce project lead times.
Enhanced security in Balochistan and other volatile regions remains a prerequisite for reliable investment. Concurrently, strengthening institutions responsible for oversight and environmental management is vital.
Investment in modern extraction and processing technologies is a must. Encouraging joint ventures with experienced international partners could accelerate this process, moving Pakistan up the value chain from raw exports to finished, high-value products.
Investing in transportation, energy supply, and industrial parks connected to mining zones would facilitate smoother operations and wider economic benefits. Initiatives like integrating the China–Pakistan Economic Corridor (CPEC) infrastructure with mining projects are promising, but must be executed efficiently.
The recent engagements with U.S. officials and the phone conversation between Dar and Rubio highlight a willingness on both sides to forge strategic alliances in the minerals space. However, these external partnerships will only be fruitful if domestic reforms take center stage.
Pakistan’s mineral resources undoubtedly represent an enormous opportunity, but a clear-eyed assessment reveals that the next five to ten years will likely see only incremental improvements. The ambitious goals asserted by PM Sharif are tempered by structural challenges: tensions between the federal government and the federating units, a fragmented regulatory environment, entrenched security issues in key regions, obsolete mining technology, and the daunting task of developing downstream processing capabilities. Meanwhile, international interest—evidenced by high-level U.S. engagements and potential Saudi investment—underscores the strategic importance of Pakistan’s resources in the global landscape.
For Pakistan to shift from grand statements to tangible economic transformation, it must urgently execute a comprehensive reform agenda. Only then can its vast mineral wealth begin to significantly alter the nation’s economic trajectory.