US eyes minerals cooperation in province home to Reko Diq

The United States signaled a renewed interest in partnering with Pakistan on critical minerals and hydrocarbons, with Secretary of State Marco Rubio highlighting the potential for joint economic ventures in a statement marking Pakistan’s Independence Day.

The announcement comes amid a thaw in Washington–Islamabad relations and follows a recent trade agreement that Pakistan says will lower tariffs and attract greater US investment. Pakistan’s Commerce Minister Jam Kamal indicated that US companies will be offered opportunities in Balochistan’s mining sector, including lease concessions and joint venture arrangements with local firms.

Balochistan and the Reko Diq advantage

Balochistan hosts some of Pakistan’s most significant mining assets, among them Reko Diq, one of the world’s largest undeveloped copper-gold deposits.

Operated by Barrick Mining (NYSE: B) in partnership with the governments of Pakistan and Balochistan, the project is forecast to generate over $70 billion in free cash flow and $90 billion in operating cash flow across its lifespan.

A recent feasibility study expanded throughput expectations:

Phase 1: Increased from 40 to 45 million tonnes per year, now estimated to cost $5.6 billion (up from $4 billion).

Phase 2: Will process 90 million tonnes annually (up from 80 million).

The mine’s operating life was adjusted from 42 years down to 37 years, though untapped mineral resources could stretch that to as much as 80 years.

Production is targeted for 2028, with Phase 1 financing currently under negotiation with multiple international lenders.

The renewed focus on Pakistan’s mineral wealth aligns with US efforts to diversify critical mineral supply chains, which are dominated by China. This policy shift is occurring as relations between Washington and Islamabad improve, following years of strain over Afghanistan and US strategic alignment with India.

“We look forward to exploring new areas of economic cooperation, including critical minerals and hydrocarbons, and fostering dynamic business partnerships,” said Rubio.

Moody’s upgrade signals financial stability

In a parallel development, Moody’s Ratings upgraded Pakistan’s credit rating from Caa2 to Caa1 with a stable outlook, citing improved financial stability supported by IMF lending. Analysts expect Pakistan to meet external debt obligations in the near term, though the country’s debt affordability remains one of the weakest among rated sovereigns.

The upgrade has already buoyed Pakistan’s dollar bonds, further supporting Islamabad’s case for attracting large-scale mining and infrastructure investment.

(With files from Reuters and Bloomberg)