 |
| Pakistan Rare Earth |
Rare Earths Become Central in Pakistan’s U.S. Trade Strategy
Pakistan has positioned rare earths at the core of its diplomatic push to avoid U.S. tariffs and attract foreign investment. Facing economic turmoil and possible tariffs of up to 29%, Islamabad is highlighting its mineral reserves—valued at up to $50 trillion—as leverage in trade negotiations with Washington. The move reflects Pakistan’s growing urgency to reduce dependence on China, its dominant investor, while courting U.S. interest in critical raw materials, including lithium, copper, and antimony.
Balochistan’s Strategic Mineral Wealth Draws U.S. Attention
Most of Pakistan’s rare earth and lithium reserves lie in Balochistan, a mineral-rich province covering 43% of the country. The area hosts the Reko Diq copper-gold project, operated by Barrick Mining (TSX: ABX, NYSE: GOLD), and contains untapped deposits of chromite, coal, and rare earths.
Meanwhile, China has invested over $60 billion in infrastructure and mining in the region via the China-Pakistan Economic Corridor (CPEC). However, operations face growing risks due to attacks by Baloch separatist groups, who oppose foreign control of local resources. As a result, U.S. involvement could shift the strategic and investment dynamics in South Asia.
Trade Talks Signal Potential U.S. Entry into Pakistan’s Mineral Sector
Pakistani negotiators arrived in Washington this week for talks with U.S. Trade Representative Jamieson Greer. Islamabad aims to exchange rare earths access and mining partnerships for tariff exemptions and expanded trade. A tentative offer includes U.S. cotton and soybean imports alongside a strategic mining pact.
If successful, the deal could challenge China’s dominance in Pakistan’s resource extraction sector and strengthen U.S. access to non-Chinese rare earth supply chains. However, any agreement risks inflaming Beijing, which views Pakistan as a Belt and Road ally.
ScrapInsight Commentary
Pakistan’s rare earth overture to the U.S. could alter regional resource diplomacy and impact future pricing of strategic metals. For the scrap trade, a U.S.-Pakistan mineral deal may spur downstream investment in localized recycling to complement new raw material flows and secure supply chain resilience.
