Over the past year, Pakistan’s name has begun to surface quietly in global discussions about rare earth elements— the minerals essential for electric vehicles, wind turbines, advanced electronics, and even military technology. The renewed US focus on Pakistan coincides suspiciously with the disruption of REE supply chains from China and the potential failure of alternative deals in Africa and South America.
US President Donald Trump’s recent warmer tone toward Islamabad has raised eyebrows among political observers. Some analysts believe this is more than diplomatic theatre— it may signal a US pivot to court Pakistan as a potential REE partner. On paper, the idea sounds promising: jobs, foreign investment, and industrial growth. But history offers a stark warning. Around the world — and here at home— resource wealth has too often become a curse rather than a blessing.
THE SAHEL WARNING: In Africa’s Sahel region, countries sit atop uranium, gold, and other valuable minerals. Yet, decades of extraction by foreign companies— primarily from the West— have brought little prosperity to the local population. Instead, these nations have experienced deepening poverty, weakened governance, and even famine. The wealth flowed out of the ground, out of the country, and into offshore accounts, leaving environmental damage and economic instability behind.
This is not accidental. It is the result of contracts and systems designed to concentrate profit abroad and transfer the risks— financial, environmental, and political— onto the host nations.
THE PLAYBOOK OF KILLER CLAUSES: A key mechanism is the mining or extraction contract itself. These agreements often contain “killer clauses” that:
- Remove jurisdiction from local courts, forcing disputes into foreign arbitration.
- Require legal proceedings to be held in a foreign city, often at great cost to the host country.
- Allow the company to bypass local oversight entirely, including blocking independent inspectors from the site.
- Use a foreign language for the official contract, making public debate or parliamentary scrutiny nearly impossible.
- Remain classified or hidden from the public until it’s too late to act.
Minerals are not wealth by themselves; they are only wealth if they are extracted under terms that strengthen national sovereignty, protect the environment, and directly benefit the people. The world is knocking at Pakistan’s mineral door. The question is whether Pakistan will open it as a partner— or as a pawn.
These clauses are not just legal technicalities— they can determine whether a country benefits from its resources or ends up paying for the privilege of giving them away.
THE ENRON PRECEDENT: India’s experience with Enron’s Dabhol power project in the 1990s is a case in point. When the Maharashtra state government tried to withdraw from the deal, the contract required the *central* government— not Enron— to bear the financial penalties. To make matters worse, the arbitration venue was London, effectively removing the dispute from Indian legal and political control.
The message was clear: even when the foreign company fails to deliver on its promises, the host country still shoulders the losses.
THE SAINDAK GOLD LESSON: Pakistan has already learned this lesson the hard way. The Saindak project in Balochistan, aimed at extracting gold and copper, was once hailed as a turning point for regional development. But the contract was riddled with disadvantageous terms.
When the provincial government of Balochistan sought to terminate the deal over its unfairness, the result was shocking: instead of gaining control over its own gold, Pakistan was forced to pay out of its own pocket due to punitive clauses buried deep in the agreement. This episode demonstrated that even when resource ownership is on paper, the wrong contract can turn a national asset into a financial liability.
A PATTERN THAT REPEATS: From the uranium mines of the Sahel, to the power stations of India, to the gold of Balochistan, the pattern is consistent:
- Wealth flows out of the ground into foreign hands.
- Host nations take on environmental and economic risks.
- Disputes are decided in foreign jurisdictions.
- Citizens are left with neither profits nor accountability.
If REE exploitation in Pakistan follows this pattern, the country could lose not just its minerals but also its strategic leverage. Rare earths are far more than a commodity— they are a critical input for the global green energy transition and for advanced weapons systems. Whoever controls them controls influence in the 21st century.
WHY THE STAKES ARE HIGHER NOW: Unlike gold or copper, rare earth elements are concentrated in very few countries. China currently dominates the market, controlling not just the mining but also the processing capacity. The USA and its allies are desperate to diversify supply, and Pakistan’s geological surveys suggest significant REE deposits may be untapped.
This means foreign suitors will likely be willing to make big promises— infrastructure investment, aid packages, security cooperation— in exchange for mining rights. But as history shows, promises are often front-loaded, while the profits are back-loaded and repatriated abroad.
A SOVEREIGNTY-FIRST FRAMEWORK: To avoid becoming the next cautionary tale, Pakistan must adopt a sovereignty-first approach to REE contracts. That means:
- Full transparency: Agreements must be publicly debated in parliament before signature.
- Legal sovereignty: All disputes to be settled in Pakistani courts under Pakistani law.
- Independent oversight: Local inspectors with the authority to shut down operations for violations.
- Accessible language: Contracts written in Urdu and English, both equally authoritative.
- Domestic value-add: Processing plants built in Pakistan to create jobs and retain more value locally.
THE POLITICAL DIMENSION: REE negotiations are not just commercial deals— they are geopolitical manoeuvres. If Trump’s, or any other U.S. administration, approaches Pakistan with an REE partnership, Islamabad must understand that Washington’s priority will be securing supply for its own industries and military, not ensuring Pakistan’s long-term prosperity.
This is where the Saindak lesson becomes vital: signing the wrong deal under political pressure can lock Pakistan into decades of disadvantage.
Pakistan’s rare earths could be a ticket to economic transformation. But without airtight contracts and uncompromising safeguards, they could just as easily become a new trap— a 21st-century Saindak.
Minerals are not wealth by themselves; they are only wealth if they are extracted under terms that strengthen national sovereignty, protect the environment, and directly benefit the people.
The world is knocking at Pakistan’s mineral door. The question is whether Pakistan will open it as a partner— or as a pawn.
