Pakistani Prime Minister Shahbaz Sharif and Chief of Army Staff General Asim Munir attended the signing ceremony of the mineral agreement with Strategic Metals Inc. (Pakistani media)
Pakistani Prime Minister Shahbaz Sharif will meet with U.S. President Trump at the White House on Thursday, making a commitment that differs from any commitments made by his predecessors in such meetings.
For years, Pakistan's main strategic value to the United States has been its role as a security partner, first during the Soviet occupation of Afghanistan, and then during the so-called "war on terror."
As more figures in the U.S. strategic community - and even Trump himself - have accused Pakistan of being hypocritical and untrustworthy, especially after U.S. forces found Osama bin Laden in Abbottabad, Pakistan, the relationship between the two countries has gradually deteriorated.
But the high-profile signing ceremony held earlier this month at the Prime Minister's residence has offered a glimpse into Pakistan's new proposal to the United States. On September 8, Sharif, Pakistani Army Chief General Asim Munir, and senior officials from both countries attended the signing ceremony and signed two memorandums of understanding.
The important agreement concerns the supply of critical minerals and rare earth elements from Pakistan to the United States. Previously, Trump had promised in July to cooperate with Pakistan in developing its "vast oil reserves." A U.S. company is investing $500 million in Pakistan's minerals.
So far, Pakistan's approach seems to be working, and the bilateral relationship is improving more broadly, something few analysts anticipated when Trump returned to the White House earlier this year. Trump had previously claimed in 2018 that Islamabad had given Washington "only lies and deception."
In March, Trump thanked Pakistan for its support in fighting "terrorism" before the U.S. Congress, and military leaders also praised the partnership between Pakistan and the United States. In June, Pakistan publicly supported awarding the U.S. president the Nobel Peace Prize, following a four-day conflict between Pakistan and India, which both countries said ended due to the U.S. president's mediation.
Trump imposed a 19% tariff on Pakistani goods, the lowest among all South Asian countries, while Pakistan's long-time competitor, India, which the U.S. has favored as a partner, was subjected to a 50% tariff. The U.S. president hosted Munir at the White House, marking the first time a non-head-of-state army chief from Pakistan has visited the U.S. presidential residence. Sharif will also become the first Pakistani prime minister to visit the U.S. presidential residence since 2019 this Thursday.
This is a notable shift by Trump, and analysts say that Pakistan's mineral commitments may play a key catalytic role. The U.S. is seeking minerals and rare earth resources it considers essential for industry, defense, and the clean energy transition, and Pakistan may be an attractive supplier, although this has not yet been fully tested.
"This is a strategic handshake, containing economic opportunities, resource diplomacy, and symbolic realignment," said a former Pakistani general of the Three-Star Army who did not want to be named, speaking to Al Jazeera.
"It's not just about underground rocks; it's about who controls the cornerstone of the future. For Pakistan, it's an opportunity to showcase its mineral narrative and link it to national pride and tradition. For the U.S., it's a strategic move on the global resource political chessboard."
From Memoranda of Understanding to Mine Development: What Agreements Have Been Reached?
At a Pakistan Minerals Summit in April, Prime Minister Sharif stated that if Pakistan could extract minerals worth "tens of billions of dollars," it could change its economic situation. Currently, Pakistan is deep in a $130 billion foreign debt quagmire.
Five months later, the Frontier Works Organization (FWO), an engineering and construction organization run by the Pakistani military, signed an important agreement with Strategic Metals Inc. (USSM), a Missouri-based company established in 2018.
The company stated that it specializes in recovering critical minerals from used lithium-ion batteries and is committed to mining metals such as cobalt, nickel, and copper.
According to official statements from Sharif, the collaboration project will immediately start exporting "easily accessible minerals" from Pakistan, including antimony, copper, gold, tungsten, and rare earth elements.
Strategic Metals Inc. signed a memorandum of understanding with the Frontier Works Organization, which is run by the Pakistani military (Pakistani media)
The statement added that the memorandum of understanding aims to eventually establish a specialized refinery in Pakistan to produce "intermediate products and finished goods that meet the rapidly growing demand in the U.S. market."
The Prime Minister's Office stated, "The first phase of the agreement is expected to invest approximately $500 million in Pakistan's key mineral sector." It also added that subsequent steps will focus on exploring the country's broader resource base to identify, extract, and process critical minerals.
Analysts say that this memorandum of understanding is not a binding mining license but an early tool indicating the parties' interest.
"From the perspective of Strategic Metals Inc., this memorandum of understanding demonstrates goodwill for potential projects that may arise at an early stage, and the broad nature of the memorandum means that any promising deposits can be quickly brought into production," said Zain Kazmi, Chief Operating Officer of Capital Strategy Group based in Islamabad and consultant for the Critical Minerals Forum in Washington, D.C., told Al Jazeera.
A senior government geologist familiar with the agreement said that the focus is on "strategic minerals and rare earth elements" and noted that the Frontier Works Organization is already studying deposits of copper and antimony.
The official said, "The Frontier Works Organization is already operating mines in the Waziristan area of Khyber Pakhtunkhwa. They also have exploration licenses in the Chagai area of Balochistan and the Gilgit-Baltistan region." Due to unauthorized access to the media, he requested anonymity.
However, he warned that mineral projects are typically long-term investments, lasting "5 to 15 years."
"Mineral development projects take a long time to yield results. However, according to this memorandum of understanding, the plan seems to first export antimony, copper, and other easily accessible products, followed by the mid-term project of installing processing plants, and finally exploration in various regions."
What Are Rare Earth Elements and Critical Minerals?
The rapid technological competition between China and the U.S. has driven strong demand for rare earth elements and other critical minerals.
Rare earths are a class of minerals composed of 17 metal elements, used widely from smartphones, electric vehicles, semiconductors, and defense systems.
Despite their name, they are not particularly rare in the Earth's crust. However, they are usually scattered or mixed with other elements, making extraction technically difficult and costly.
The U.S. Geological Survey (USGS) and the Department of the Interior have compiled a list of "critical minerals" for the U.S. - the latest list includes 54 elements, including copper and silver, many of which are crucial for the U.S. clean energy transition and high-tech manufacturing.
The USGS listed 15 countries and regions with mapped rare earth deposits in its January 2025 Mineral Commodity Summary, but Pakistan is not among them.
From Balochistan to Gilgit – Where Are Pakistan's Mineral Resources?
Moin Razzaq Khan, who was the managing director of the state-owned Pakistan Petroleum Limited (PPL), is now a consultant in Karachi. According to his estimate, about a quarter of Pakistan's territory contains rock formations that are "highly likely" to contain critical minerals.
The Reko Diq Copper Mine is considered one of the largest copper deposits in the world (AP)
Large copper deposits are found in the remote highlands of Balochistan, Khyber Pakhtunkhwa, and Gilgit-Baltistan. These areas have rugged terrain, serious security risks, or both.
As Moin Razzaq Khan said, some areas "either face geographical issues, or political issues, or both."
With a population of about 15 million, Balochistan is the poorest province in Pakistan, despite its rich natural resources.
Violence is also increasing in Khyber Pakhtunkhwa. Islamabad claims that armed groups cross the border from Afghanistan into tribal areas such as South Waziristan and North Waziristan, which are believed to contain rich mineral resources.
Economically, the most important copper deposits are located in Balochistan: the Saindak and Reko Diq copper mines.
The Saindak copper mine is located near the Iranian border, discovered in the 1970s, and began commercial mining under the leadership of China Metallurgical Construction Group in the early 21st century. Copper export data from 2024 showed exports from the Saindak copper mine amounting to $842 million, higher than the previous year's $777 million.
The Reko Diq copper mine is less than 150 kilometers from Saindak and is widely considered one of the largest undeveloped copper-gold deposits in the world.
The Reko Diq copper mine is developed by Canadian Barrick Mining Company, which holds 50% of the shares, with the remaining shares divided among the federal government, provincial government, and national entities.
Moin Razzaq Khan told Al Jazeera, "Reko Diq is one of the largest undeveloped copper-gold deposits in the world. Estimated proven and probable reserves are about 15 million tons of copper and 26 million ounces of gold."
He estimated the value of the metals contained in the host rock exceeds $19 billion, with copper accounting for about $1.38 billion and gold for about $530 million.
However, exact data is limited. Former director of the Pakistan Mineral Development Corporation, Muhammad Yaqub Shaikh, said that from a geological perspective, Pakistan may have significant mineral resource potential.
But he added that detailed exploration is needed to systematically explore and assess its potential.
Kazmi, a consultant for the Critical Minerals Forum, agreed with this.
He said, "In terms of deposit size, besides Reko Diq, Pakistan does not have absolutely measurable reserves. The mineral industry in Pakistan is still in its infancy, and all projects are in the undeveloped stage, so it takes time to verify these reserves."
Commitments and Evidence
Although the government has expressed appreciation for the signing of the memorandum of understanding, Al Jazeera's requests for comments from the country's petroleum minister and other officials remained unanswered.
Critics warn against "overestimating" and urge caution, pointing out a series of previous unfulfilled statements.
This skeptical attitude stems from previous events. On July 31, Trump posted on his "Truth Social" platform that the U.S. would cooperate with Pakistan to develop its oil reserves. Given Pakistan's known crude oil reserves are limited, this statement confused many observers.
About 31% of Pakistan's import costs go toward fuel, and nearly 80% of its oil demand is dependent on imports.
In May 2019, then-Pakistani Prime Minister Imran Khan announced that a consortium drilling near the Arabian Sea had discovered an "oil and gas jackpot," which would eliminate Pakistan's fuel needs for decades. However, these wells were soon abandoned due to the inability to produce commercially viable reserves.
Similarly unsubstantiated claims resurfaced again in September 2024, when a senior military official spoke about potential discoveries that could "change the country's fate."
Earlier this month, a retired naval officer said that Pakistan and China had jointly discovered potential large gas reserves during a survey - but these claims remain unverified to date.
Meanwhile, analyst Moin Razzaq Khan, based in Karachi, questioned whether Strategic Metals Inc. has the expertise to carry out the exploration and mining operations required for Pakistan to realize its mineral ambitions.
Strategic Metals Inc.'s own business focuses on recovering metals from used lithium-ion batteries and reprocessing cobalt tailings at its headquarters in Missouri. Tailings are the residual material after ore processing, which may contain trace amounts of other metals, including rare earth elements.
Moin Razzaq Khan pointed out, "At least for now, they only want to export concentrates and appear to act like a trading company rather than a mining company."
However, Kazmi said that the memorandum of understanding signed with Strategic Metals Inc. can serve as a useful early signal to attract larger and higher-quality investors. He said it marks "the growing interest of high-quality investors in Pakistan's mining industry and opens the door for other top mineral processors and mining investors to enter the Pakistani market."
Minerals and Geopolitical Balance
However, the key mineral agreements signed with the U.S. may test Pakistan's geopolitical balance in unprecedented ways.
Over the past decade, Pakistan has deepened its economic ties with China through the China-Pakistan Economic Corridor (CPEC), a network of infrastructure projects worth $62 billion.
Chinese investments - especially in Balochistan - have sparked controversies, with local nationalist insurgent groups repeatedly attacking Chinese personnel and facilities.
Official data show that there are nearly 20,000 Chinese citizens in Pakistan. Since 2021, at least 20 people have died in attacks related to these projects.
For China, security is a primary concern, and American investment entering these areas could further complicate the already tense situation in these provinces.
Uzair Younus, head of the Asia Group consulting firm, said that the mineral memorandum of understanding indicates that Pakistan is open to Western strategic investors, and Balochistan will not be solely under Chinese influence.
Nevertheless, "for the Chinese, this is also a positive development, as the U.S. interests in these areas can help alleviate the insurgency fueled by regional proxies in Balochistan," Younus told Al Jazeera. In short, any attackers would not only risk angering Pakistan and China but also risking angering the U.S.
Experts say that if the local economy benefits from American investment, China will also benefit.
Younus pointed out, "This will release business opportunities, which is crucial for continuously paying off loans provided by Chinese investors and creditors providing infrastructure projects to Pakistan."
Amir Rana, a security analyst based in Islamabad, said, "Although China may wish to monopolize Pakistan's mineral resources," he does not believe that the relationship between the two countries "will suffer any major damage because of this."
Kazmi believes that from a commercial perspective, it is more advantageous to work with multiple partners.
He said, "No country has been granted full authority over Pakistan's resources, and Pakistan has an irrevocable right to these deposits."
Communities, Security, and Revenue Sharing
However, according to Younus, based in Washington, D.C., Pakistan still has a long way to go to demonstrate tangible progress and results to bring commercial returns to investors.
He pointed out, "If Pakistan cannot do this, the perception that Pakistan's instability makes it a bad place to do business will be further reinforced."
The retired army general, who did not want to be named, added that truly changing the troubled areas affected by violence and unrest requires "more than foreign capital."
The general said, "To succeed in this field, it is necessary to shift from military control to inclusive development, grant local communities land management rights, share mineral royalties transparently, and ensure infrastructure that safeguards extraction while maintaining dignity."
"Only by redefining mineral wealth as a national heritage, rather than a contested commodity, can Pakistan transform its latent potential into a foundation for unity, sovereignty, and regional influence."
Sources: Al Jazeera
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