Ground realities

Utilizing Balochistan's mineral wealth wisely

A common and overstated belief is that foreign nations, such as the USA and China, can effortlessly take away rare earth elements and other valuable minerals from Balochistan's profuse geological reserves.

It is also widely assumed that US or Chinese corporations, among others, will quickly finalize massive agreements with Pakistan's government. These deals, it's thought, will smoothly circumvent complex legal hurdles, international political strains, bureaucratic obstacles, and dangerous security conditions. The narrative suggests these foreign entities will then ship out costly light and heavy rare earth metals, leaving local populations with an inadequate portion of the profits.

In all honesty, the circumstances within Balochistan are far more complex. The situation resembles a vast puzzle box filled with numerous contradictions.

A significant portion of the mineral and mining deposits are entangled in a web of immense difficulties and barriers, stemming from complicated strategic, political, and economic factors.

Even well-known operations like the Reko Diq project, managed by Canada's Barrick Gold, and the Saindak site, run by China's MCC, face their own extensive set of challenges. While these two ventures are operating to a certain degree, the region's remaining substantial reserves of globally sought-after rare earth and critical minerals are confronting severe political, legal, administrative, and security-related obstacles.

This entire subject was recently magnified beyond its actual proportions. To grasp this, several observations are worth considering. For instance, a few weeks prior, certain international developments created a temporary surge of enthusiasm, fostering a misleading impression that the mineral wealth was primed for immediate extraction. It was grossly overstated that the U.S. government had completed all arrangements to acquire Balochistan's rare earth and critical elements, fueled by a perceived phase of exceptionally warm Pakistan-US relations. This was followed by the US announcement of $1.25 billion in financing for mineral mining to boost Balochistan's economy.

The EXIM Bank's funding would facilitate up to $2 billion worth of high-quality US mining equipment and services, essential for constructing and running the Reko Diq mine. This venture is expected to generate roughly 6,000 jobs within the USA and 7,500 positions in Balochistan.

Simultaneously, various news reports captured global interest by suggesting Chinese firms are actively striving to acquire additional mining resources in Balochistan. The atmosphere became more charged with a quickly spreading rumour that foreign companies were secretly using advanced Chinese excavation machinery at local mining sites without authorization.

If thoughtfully revised, this Act holds the promise of unlocking Pakistan's considerable mineral wealth, drawing in ethical investment, and ensuring equitable advantages for local communities and provincial governments. Achieving this vision necessitates collaborative effort, openness, and reciprocal respect between federal and provincial participants.

Shortly thereafter, China's Assistant Minister of Foreign Affairs, Liu Bin, held a meeting with a delegation from Pakistan's Balochistan province. The discussion touched upon the persistent threat to Chinese nationals from banned separatist militant organizations such as the Balochistan Liberation Army (BLA) and Balochistan Liberation Front (BLF). These groups believe Beijing is assisting Pakistan in exploiting the resources of the underdeveloped province, which hosts China's strategically important port and mining ventures.

Unverified reports circulated that Beijing, frustrated by repeated assaults on its citizens, has been urging Pakistan to permit the use of its own security personnel for protecting the thousands of Chinese workers stationed there.

Amidst this heightened attention, the Balochistan mines and minerals sector received further recognition when the provincial Department of Industries and Commerce designated it as an official industry last December.

The sector's prominence grew even more with the Pakistan Minerals Investment Forum 2025 held in Islamabad. This two-day conference attracted over 2000 participants, including 300 international attendees from the USA, China, Saudi Arabia, the UK, and other nations. During the forum, Prime Minister Shehbaz Sharif voiced confidence, suggesting that Pakistan's extensive mineral resources could enable the nation to reduce its reliance on the International Monetary Fund (IMF).

Following this, Petroleum Minister Ali Pervaiz Malik extended a formal invitation to international investors for the next Pakistan Minerals Investment Forum, scheduled for April 2026.

Discussions in various governmental meetings highlighted the perception that due to Pakistan's enormous potential, global interest is mounting, with the world seemingly eager to partner with Pakistan to secure its minerals.

Let's examine the complete picture in a more accurate and comprehensive light. As the saying goes, there's many a slip 'twixt the cup and the lip, and the matter of Balochistan's mining sector involves numerous unpredictable developments and fluctuations.

Among the most critical challenges, the security environment is particularly hazardous and unpredictable. Networks of separatist insurgents have a strong foothold in areas abundant with mineral deposits. Despite a military presence, multiple terrorist attacks have resulted in tragic loss of life. Furthermore, local miners are often compelled to pay protection money to these separatist groups to ensure the safe passage of their transported materials.

Another significant issue is the enactment of disputed legal frameworks. The process of creating new legislation sparked conflict between the government, opposition factions, and other interested parties within Balochistan. This political struggle has severely hampered advancement in the province's mining industry.

Last year, the Balochistan government enacted the Mines and Mineral Act 2025. While all parliamentary groups initially supported the Act, opposition parties— including the BNP, JI, JUI(F), and Pashtunkhawa Milli Awami Party— later retracted their support, arguing it infringed upon provincial autonomy and the fundamental entitlements of the Baloch people.

Specifically, the Pakhtunkhawa Awami Milli Party declared its firm opposition to any federal involvement outlined in the new Act. "The rightful portion of mineral owners must be safeguarded and enhanced at all costs," the party insisted.

The Pakhtunkhawa Awami Milli Party leader revealed his belief that Balochistan's resources have historically been extracted against the wishes of its inhabitants. He described this new law as a continuation of past federal policies. He called for an entirely new legislative framework, explicitly rejecting the current Mines and Mineral Act 2025, even with proposed amendments from CM Balochistan Sarfraz Bugti and the All Pakistan Mine Owner Association (APMOA).

The discord extends beyond the political arena and has moved into the legal domain. Apart from the BNP (Mengal), seven legal petitions have been submitted to the court contesting the Balochistan Mines and Mineral Act 2025.

Meanwhile BNP(M) leaders alleged that provincial legislators who supported the Act were misinformed about its technical details. They claimed the bill presented to them differed from the version ultimately passed by the Balochistan Assembly. They further criticized the new Act for sidelining smaller, local miners, pointing to the drastic increase in mining lease fees from Rs 500,000 to Rs 10 million. They argued that other provisions within the Act are structured to benefit only wealthy corporations or international firms. They stated that the opposition parties are unanimously against the current Act and are urging the government to develop fresh legislation through inclusive consultation with all affected parties.

Certain political figures have voiced concerns, emphasizing that the rights of indigenous miners must be the foremost priority, ensuring the matter isn't mishandled. This, they suggest, requires sensible action from both the federal and provincial administrations. "We worry that the mining sector could become a battleground for commercial rivalry between the USA and China. Following China's restrictions on critical mineral exports to the U.S. last year, the USA is actively seeking partnerships with mineral-rich regions," they commented.

Observing the situation closely, All Pakistan Mine Owners Association (APMOA) Secretary General Fateh Shah Arif shared his considered perspective. He stated that Balochistan urgently requires modern regulations to replace outdated, colonial-era laws, specifically mentioning the 1923 Act and the Mineral Rules of 2002.

When the provincial government introduced the new Mines and Minerals Act 2025, Arif noted that it faced sharp criticism for failing to incorporate essential input from stakeholders and for bypassing proper legislative procedures.

Additional deficiencies identified in the Act include the ambiguous role assigned to the Federal Mineral Wing, which is perceived by some as a violation of the 18th Amendment.

Stakeholders also objected to the establishment of the Mineral Investment Facilitation Authority, citing the unclear representation of their interests. This sparked anxieties about potential federal encroachment on provincial matters such as royalty collection, licensing authority, and the distribution of local profits. They voiced dissatisfaction over being excluded from the licensing process, which they felt should involve local mine owners and provincial legal representatives.

Recommendations from stakeholders include securing a minimum 25 percent share for the province and allocating 10 percent of proceeds to local tribal communities to prevent unrest and build confidence in mining areas. They also advocate for a 30-year lease term, in contrast to the 10-year period suggested in the new legislation.

APMOA Secretary General Fateh Shah Arif described the Mines and Minerals Harmonization Act 2025 as a detailed 139-page document, the result of over a year of consultations. "While it possesses considerable strengths, it also incorporates vital flaws needing correction to properly serve both national objectives and provincial entitlements," he remarked.

Rather than dismissing the entire legislative effort, he suggested that provincial assemblies should undertake thorough reviews, integrating recommendations from stakeholders and adhering to constitutional principles.

If thoughtfully revised, this Act holds the promise of unlocking Pakistan's considerable mineral wealth, drawing in ethical investment, and ensuring equitable advantages for local communities and provincial governments. Achieving this vision necessitates collaborative effort, openness, and reciprocal respect between federal and provincial participants.