Can Saudi and UAE investments transform Pakistan’s mining sector?

Prime Minister Shehbaz Sharif recently highlighted the importance of developing Pakistan’s mining sector during his visit to Dubai, emphasizing partnerships with Gulf Cooperation Council (GCC) countries. Scientific studies inform about Pakistan’s vast mineral resources waiting to be tapped. From gold and copper to rare earth metals essential for modern technologies, the country holds immense potential to transform its mining sector into a linchpin of economic growth. Due to interest from key regional players like Saudi Arabia and the United Arab Emirates (UAE), longstanding barriers faced by this sector in Pakistan are being addressed.

As interest grows, so do the questions: Is Pakistan ready to meet investor expectations? And can it balance the development of mining sector with environmental sustainability and community welfare?

Saudi interest in acquiring a stake in the Reko Diq project signals an opportunity for Pakistan to draw on GCC investment and expertise. 

Dr. Vaqar Ahmed

The stakes are high. Pakistan’s mineral wealth is among some of the most extensive in the world. The Reko Diq project, for instance, is one of the world’s largest untapped reserves. The country also holds vast reserves of coal, gemstones and critical minerals like lithium, essential for renewable energy technologies. Properly harnessed, these resources could inject billions of dollars into Pakistan’s economy, create jobs, and position the country as a key player in global supply chains.

Saudi Arabia, as part of Vision 2030, is actively diversifying its economy, with mining as a focal point. Saudi interest in acquiring a stake in the Reko Diq project signals an opportunity for Pakistan to draw on GCC investment and expertise. 

However, Pakistan needs to expedite its progress on four main fronts: put in place conducing mining sector policies and regulation; plug infrastructure deficits, address security concerns, ensure that there is no threat to environment and local communities. 

While the National Minerals Harmonization Framework 2025 is nearing finalization, delays have hindered progress. This framework, set to be unveiled, aims to streamline mining laws across provinces and promote investor confidence. But this framework alone is not enough. Bureaucratic inefficiencies, corruption and unclear land ownership could delay foreign and even local investment in this sector. Without a transparent, investor-friendly environment, even the most robust frameworks risk falling short.

Mineral-rich regions like Balochistan need to address insurgency and tribal conflicts. For investors, security risks extend beyond operational disruptions to the safety of personnel and infrastructure. A comprehensive security plan is critical to mitigate these concerns.

Mining requires robust infrastructure— roads, railways, energy supply and ports. Yet, Pakistan’s transportation and energy systems remain underdeveloped, particularly in remote mining areas. Without targeted investment in infrastructure, the logistical challenges of mining operations will remain insurmountable. This is an area which need not wait for foreign investment and the local private sector can be lured through appropriate incentives. 

Mining projects have often faced criticism for population displacement, hazardous labor practices and inadequate environmental oversight. Primitive mining practices pose significant risks to ecosystems and water resources. Public backlash against such projects has underscored the need for sustainable practices that prioritize environmental protection and community rights.

Moving forward, Pakistan should actively engage GCC nations — joint ventures, modelled on successful international partnerships, can share risks and benefits while promoting trust. Swift adoption of the National Minerals Harmonization Framework 2025 should result in one-window operations for approvals and permits. 

Public-private partnerships can mobilize funding while reducing the fiscal burden on the government. This is important as basic infrastructure in transport and energy may be required through domestic resource mobilization. 

Environmental, labor, and social considerations must be central to mining policies. This includes improving the way federal and provincial labor departments and Environmental Protection Agencies are operating, enforcing approved environmental regulations, obtaining thorough approvals, and engaging local communities in decision-making. Transparent benefit-sharing mechanisms can help win public trust.

To attract investors, federal government must prioritize comprehensive geological surveys to map its mineral wealth. Detailed data reduces investment risks and accelerates project implementation.

A critical question persists: who within the Pakistani government is ensuring sustained follow-up on these priorities? Effective execution requires seamless coordination among federal and provincial governments, private investors, and international stakeholders.

Entities such as the Ministry of Energy or provincial mines and mineral departments have made contributions but face challenges in fully realizing their potential. They have yet to fully capitalize on the country’s diverse mineral wealth or expand into untapped areas. Their encouragement for emerging technologies, including artificial intelligence, remains limited, which could impact this sector’s competitiveness and operational efficiency. To address financial and technical constraints, these entities must actively pursue public-private partnerships and attract foreign investment to undertake large-scale projects successfully.

The Special Investment Facilitation Council (SIFC) has been instrumental in advancing mining initiatives, but sustained and inclusive engagement with provincial governments and local communities, including local chambers of commerce is equally vital. Building trust, ensuring equitable benefits, and maintaining transparency will be key to unlocking Pakistan’s vast mineral potential and promoting long-term growth in the sector.

- Dr. Vaqar Ahmed is an award-winning economist and former civil servant. He supported the formulation of various tax and trade policies during his tenure at Pakistan’s Planning Commission, Federal Board of Revenue, and the Ministries of Finance and Commerce. X: @vaqarahmed​