The Institute of Cost and Management Accountants has said in a policy note that while the country’s mining sector has vast potential, it must get into manufacturing if it is to enjoy the true benefits of production. It made this observation in the light of the first shipment of Pakistani rare-earth elements to US Strategic Metals on October 2. The shipment included antimony, copper concentrate and such rare earth elements as neodymium and praseodymium. The ICMA meant that some of the processing of the raw ore should be done in Pakistan, but while it was right to recommend that the processed and value-added products needed to meet ESG (Environmental, Social and Governance) standards, it did not mention the next step, which is to manufacture the products for which these rare earths are needed.
To take the example of just praseodymium, it is used in making magnets used in strong permanent magnets (for electric vehicles and wind turbines), high-strength alloys for aircraft, pigment for yellow glass and optical instruments. At present, the ores are being sent to the USA in the hope of avoiding tariffs. But where is the sense in importing the manufactured goods like the wind turbines or the aircraft from the USA after having sold it the raw materials in the first place? Now is the time to start developing the industries to use these materials. Otherwise the country will see a return to the colonialism it shook off in 1947. The mining sector should be dev eloped, but not primarily as part of a global supply chain, but to feed national manufacturing industry.
Pakistan is facing the dilemma of what could become an extractive economy, such as Zambia (copper) or the Gulf (petroleum). It is tempting to sell what is under the ground, but it means being at the mercy of the extracting companies. The shenanigans of US President Donald Trump show that the neo-colonialist project is making a grand comeback. The danger is that the local elite may be enriched, but the people do not get any of the benefits. Manufacturing would avoid that, not to mention that it would get the country into the knowledge economy that is slated to be the secret of the future. Just having resources will count for little if others take them away and use them.
