Islamabad – A U.S. firm has signed a Memorandum of Understanding (MOU) with the Frontier Works Organization (FWO) in Pakistan to explore and develop the untapped yet huge reserves of critical minerals in the country.
The signing was held at the Prime Minister’s House on Monday, September 8, between a high-level US delegation of the United States Strategic Metals (USSM) and Mota-Engil companies, and Prime Minister Muhammad Shehbaz Sharif.
In the meeting, the Deputy Prime Minister Ishaq Dar, Chief of the Army Staff Field Marshal Syed Asim Munir, and Federal Ministers were also present.
The delegation is visiting Pakistan to seek expansion opportunities for mining activities in Pakistan and evaluate possibilities of value additions in mineral resources and development of supportive infrastructure.
Delegation held top-level meetings with the Prime Minister of Pakistan, Chief of Army Staff, Minister of Petroleum, and Minister of Commerce, and had been told about the rich mineral reserves of Pakistan, particularly the copper, gold, and rare earth elements.
A U.S. Strategic Metals (USSM) delegation signed the accord; it is a Missouri-based company dedicated to the production and recycling of critical minerals. The delegation was accompanied by U.S. Embassy Acting Deputy Chief of Mission Zach Harkenrider, highlighting the direct interest of Washington in the deal.
The partnership is estimated to have an initial investment of about 500 million dollars and starts with the exportation of minerals like antimony, copper, gold, and tungsten, with a long-term strategy of USSM setting up a proprietary poly-metallic refinery in Pakistan.
A Landmark Agreement
Both parties celebrated that the MOU was a sign of the growing relationship between the two nations. In a statement released by the US Mission Pakistan, Charge d’Affaires (CDA) Natalie Baker noted the strategic role of the agreement.
According to CDA Baker, “This signing is yet another example of the strength of the U.S.-Pakistan bilateral relationship that will benefit both countries.”
She also emphasized the importance of these bilateral agreements by stating that “The Trump administration has made the forging of such deals a key priority given the importance of critical mineral resources to American security and prosperity. We look forward to seeing future agreements between U.S. companies and their counterparts in the critical minerals and mining sector in Pakistan.”
The transaction targets critical minerals, which are outlined by the US Department of Energy as being a key to numerous high-tech manufacturing and energy-related production technologies.
These minerals contain rare-earth elements, which are essential parts of modern technologies such as electric vehicles, renewable energy systems, and hi-tech defense solutions.
As China now controls most of the world’s supply chain of these resources, the U.S. has been actively pursuing diversification of its sources, and the vast mineral wealth of Pakistan has become a strategic resource.
Plausibility of the Deal
The collaboration between USSM and FWO can be deemed as very viable based on the character and history of the partners. USSM is a niche company that has an obvious orientation towards the critical minerals industry, and it is in line with the desire of the Pakistani government to harness its mineral resources.
Frontier Works Organization (FWO), however, is a significant engineering and construction wing of the Pakistan Army that has a lot of experience in the development of infrastructure and, more recently, in large-scale mining developments.
Navigating a Complex Diplomatic Landscape
The initial phase in the deal involves the export of easily accessible minerals, which can bring about instant revenue. The proposal of long-term refinery establishment in Pakistan is an indication that they are determined to have value addition and technology transfer, which is a priority for Islamabad.
Political commentators are, however, also sounding reasonable warnings that Pakistan should take its time to ensure that it is not sucked into a new wave of bloc politics.
As the U.S.-China rivalry over the critical minerals intensifies, there is a fear that Pakistan may be enticed to pick a side, which may risk its CPEC projects, as well as its relationship with Beijing.
Islamabad faces the difficult task of attempting to use this new alliance to diversify its economic relationship without isolating its traditional strategic ally, China.
