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EDITORIAL: Following a sharp upturn in Pakistan-US relations last year, one of the positive fallouts was the renewed attention on Pakistan’s grossly underexploited minerals sector. That momentum took concrete shape when an agreement was signed between US Strategic Metals and the Frontier Works Organisation, under which the former committed USD 500 million to establish mineral processing and development facilities in Pakistan, and October saw the first consignment of mineral samples being dispatched to the US to advance the deal. That was considered a key initial step towards integrating the country into global supply chains for critical minerals that underpin a range of industries, from renewable energy and electric vehicles to computing and defence.Yet, as a policy note issued last week by the Institute of Cost and Management Accountants of Pakistan (ICMAP) correctly cautions, these nascent initiatives will yield limited returns if the country remains merely a supplier of raw ores. In sophisticated global value chains, wealth is generated not at the point of extraction, but through processing, refinement and downstream manufacturing. Exporting unprocessed minerals locks countries into the lowest rung of the ladder, with thin margins, limited technological spillover and employment gains that plateau after the initial extraction phase. So, as the ICMAP rightly argues, if the objective is to strengthen foreign exchange inflows, expand exports, diversify the industrial base and place the economy on a sustainable growth path, Pakistan must invest in converting raw minerals into processed, value-added products that comply with global Environmental, Social and Governance (ESG) standards.Pakistan’s mineral endowment is staggering by any measure. Official estimates place its value at around USD 8 trillion across nearly 600,000 square kilometres and encompassing 92 identified minerals, 52 of which are commercially mined. Yet the sector generates barely USD 2 billion annually. The scale of this underperformance becomes clear when one considers the sheer range of the country’s mineral holdings, which include the world’s fifth-largest copper reserves, along with gold deposits valued in the billions and substantial reserves of coal, gypsum, chromite, lithium and rare earth elements. Unlocking the full potential of this wealth requires first and foremost a clear, coherent governance framework that ensures policy consistency and effective institutional coordination. The 18th Amendment granted provinces greater control over mineral resources, but inadequate efforts to clarify roles and harmonise regulations have created overlapping authorities, fragmented administrative processes and complex regulatory hurdles that impede strategic decision-making. Addressing these governance gaps while respecting provincial concerns has become increasingly urgent. Furthermore, alongside the emerging US partnership, a parallel engagement with China and Middle Eastern partners, combined with ESG-aligned value chains as the ICMAP advocates can position Pakistan as a credible contributor to global mineral supply.Crucially, authorities must recognise that ESG principles extend beyond environmental compliance or corporate governance. They also require ensuring that communities living atop these mineral riches – particularly the historically marginalised and militancy-ravaged populations of Balochistan and Khyber Pakhtunkhwa – have a share in the economic benefits. Without their active participation across the mining value chain the sector’s potential to deliver broad-based prosperity will remain largely unrealised. Achieving this demands significant investments in human capital and cutting-edge technologies, alongside the capacity to address deep-rooted challenges, including security risks, climate vulnerabilities, ineffective contract management and prolonged legal disputes, all of which have repeatedly hindered progress in the sector.Pakistan cannot afford to repeat the mistakes seen in other sectors, where drives to boost exports have often amounted to little more than shipping domestic surpluses abroad, with limited attention to value addition or integration into global supply chains. In the minerals sector, the objective must be fundamentally different: production should be strategically oriented and tailored to the specific demands of international markets, ensuring that every stage of extraction, processing and refinement maximises economic returns and long-term competitiveness.Copyright Business Recorder, 2026