Pakistan, US sign $500mn MoU to boost cooperation in critical minerals

Pakistan and the United States have signed a landmark $500 million memorandum of understanding (MoU) to strengthen cooperation in the critical minerals sector, signaling a new phase of economic and strategic partnership between the two nations.

The agreement was inked at the Prime Minister’s House on Monday between the United States Strategic Metals (USSM), based in Missouri, and Pakistan’s Frontier Works Organisation (FWO).

Signing Ceremony and Statements

According to the US Embassy in Islamabad, the ceremony was attended by Embassy Acting Deputy Chief of Mission Zach Harkenrider, who accompanied the USSM delegation.

Speaking at the event, Chargé d’Affaires Natalie Baker said:

“This signing is yet another example of the strength of the US-Pakistan bilateral relationship that will benefit both countries.”

She emphasized that the Trump administration has made forging such partnerships a top priority, given the importance of critical minerals to American security and prosperity.

High-Level Engagement

Later, the Prime Minister’s Office (PMO) confirmed that a US delegation from USSM and Mota-Engil — a global leader in mining and infrastructure — met with Prime Minister Shehbaz Sharif.

The meeting was attended by:

• Deputy Prime Minister and Foreign Minister Ishaq Dar
• Chief of the Army Staff Field Marshal Syed Asim Munir
• Senior federal ministers

During the meeting, Pakistani officials briefed the delegation on the country’s vast reserves of copper, gold, tungsten, antimony, and rare earth elements (REEs).

Areas of Cooperation

Two MoUs were signed during the visit:

1. Critical Minerals Development
   • FWO and USSM signed a cooperation framework covering the exploration, extraction, and processing of critical minerals.
   • The partnership will begin with exports of available minerals, including antimony, copper, gold, tungsten, and REEs.
   • The agreement lays groundwork for the establishment of a USSM poly-metallic refinery in Pakistan, producing intermediate and finished mineral products for the US market.
   • The first phase of investment is valued at $500 million.
2. Logistics and Infrastructure
   • Pakistan’s National Logistics Corporation (NLC) signed an MoU with Mota-Engil Group.
   • The collaboration will focus on infrastructure development, logistics support, and job creation tied to mining operations.

Strategic Significance

The PMO noted that visiting firms expressed willingness to:

• Establish value-addition facilities in Pakistan
• Expand mineral processing capacity
• Develop large-scale infrastructure projects
• Explore innovative financing models, including tokenisation of critical minerals for global investment participation

Officials stressed that cooperation would prioritize sustainability, profitability, and environmental responsibility, ensuring benefits for local communities.

US-Pakistan Relations Context

The deal comes amid a recent warming of relations between Washington and Islamabad.

• US Secretary of State Marco Rubio recently stated that Washington seeks expanded cooperation with Pakistan in critical minerals and hydrocarbons.
• On Pakistan’s Independence Day, the State Department hailed progress on a trade deal that Islamabad said would reduce tariffs and attract fresh investment.
• Commerce Minister Jam Kamal confirmed that US companies will be offered mining concessions in Balochistan, including lease grants and joint venture opportunities.

Balochistan hosts some of Pakistan’s largest mining projects, including Reko Diq, operated by Barrick Gold, considered one of the world’s largest gold and copper mines.

In recent months, political ties have also improved. President Donald Trump credited his administration for mediating a ceasefire between India and Pakistan after hostilities in 2025, following an attack in Indian Illegally Occupied Jammu and Kashmir (IIOJK).

Looking Ahead

The MoU marks the beginning of what officials on both sides called a “long-term anchor partnership” in critical minerals. Dedicated teams will now be formed to:

• Identify priority minerals for export
• Build Pakistan’s mineral processing capacity
• Expand infrastructure to support mining projects
• Enhance US access to reliable supply chains for defense, aerospace, and technology industries

Both governments expressed optimism that this collaboration will unlock new economic opportunities, create jobs, enable technology transfer, and deepen strategic trust between Pakistan and the United States.