New Delhi, Oct 31 (IANS) Pakistan's renewed mineral diplomacy with Washington reflects a familiar contradiction -- the promise of economic transformation amid a persistent record of overpromising and under-delivery, as Pakistan's vast mineral resources emerge as a new pillar of its relationship with the United States, a new report has said.

Despite decades of Chinese investment, ambitious infrastructure projects and repeated claims of vast untapped mineral wealth, the mining sector remains a marginal contributor to national output, according to the report in memri.org.

“Gwadar has struggled to fulfil its commercial potential, and the multibillion-dollar Reko Diq project faces renewed delays over security concerns. Meanwhile, foreign direct investment declined by nearly 34 per cent in FY2025-26, even as the military-backed Special Investment Facilitation Council promised to accelerate foreign capital inflows,” the report reveals.

Pakistan's military establishment’s growing commercial influence increasingly overlaps with economic policymaking and foreign investment.

“Washington's interest in securing alternative critical mineral supplies is creating new opportunities for Pakistan, but it could also strengthen institutions that operate with limited civilian oversight,” warns the report.

While Beijing has invested extensively in infrastructure, energy and mining-related ventures in Pakistan, persistent insecurity and project delays have complicated the commercial viability of several undertakings.

The report argues that Pakistan's military is becoming a principal intermediary between foreign investors and the country's strategic resources.

The arrangement is reinforced by the Special Investment Facilitation Council (SIFC), established in 2023 to accelerate investment in sectors including mining, agriculture, energy, and technology.

These concerns are particularly acute in Khyber Pakhtunkhwa, where control over mineral resources has become politically contentious.

“Pakistan's Eighteenth Constitutional Amendment strengthened provincial autonomy, including authority over most solid minerals. Any expansion of federal influence over mineral licensing therefore carries constitutional and political implications,” said the report.

Washington's growing interest in Khyber Pakhtunkhwa's mineral wealth was evident in U.S. Charge d’Affaires Natalie Baker's meetings with Governor Faisal Karim Kundi in June and July 2026, followed by discussions with KP Assembly Speaker Babar Saleem Swati in August on critical minerals, energy and security cooperation.

“These engagements preceded the October imposition of governor's rule, raising questions about the convergence of American strategic interests, military-backed economic governance and diminishing provincial autonomy,” the report mentions.

In a province where mineral governance was already the subject of political and constitutional disagreement, the displacement of ordinary provincial executive authority raises serious questions about how mining concessions, regulatory approvals and resource-related investment decisions will be managed during the emergency, said the report in memri.org.

--IANS

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