The Strategic Handshake
A mineral deal made between Pakistan and U.S. Strategic Metals (USSM) is reported to bring $500 million in investment into the critical minerals sector in Pakistan with the Frontier Works Organization (FWO). The MoU relates to copper, gold, antimony, tungsten and rare earths and has discussed the creation of refineries in Pakistan.
The Central Problem: Raw Exports
The agreement does not have clear prioritization of refining these materials in Pakistan and providing added value. So, the first step taken in the agreement will be to export raw production, earning Pakistan much less than profits made by refining these minerals and creating high-value products abroad.
Poor Oversight, Military Approach
This memorandum of understanding (MoU) is associated with the FWO, not with civilian state institutions, and this creates skepticism about any meaningful accountability process and duplication of oversight. The absence of exclusive, binding legal clauses on royalties, revenue sharing allocation and procedures for sustainability, should raise concerns to all parties involved but mainly to the rights of Pakistan’s local people and communities, which may undermine the national interest.
Geopolitical and Local Risks
Establishing strategic minerals for U.S. interests increases Pakistan’s foreign reliance and reduces leverage. Also, the only reasonable mineral, gold, is located in an area of Pakistan characterized by weak governance and if we have the same constitution that is not well thought out protect cannot be assumed to prevent local displacement, environmental degradation and the alleged economic benefit cannot be assumed to accrue to local people from their own resources.
Protecting Resource Sovereignty
For this deal to be beneficial for Pakistan: the government must be sensitive to the trade to create value in Pakistan, have transparency in contracts, protect local people, protect local communities, thus avoiding the raping of local wealth creation with little recourse left for local people.
