Pakistan's renewed mineral diplomacy with Washington reflects a familiar contradiction — the promise of economic transformation against a persistent record of overpromising and under-delivery, according to a new report. As Pakistan's vast untapped mineral wealth emerges as a fresh pillar of its relationship with the United States, analysts are questioning whether this latest pivot will fare any differently from previous attempts.

A Sector That Has Consistently Underperformed

Despite decades of Chinese investment, sweeping infrastructure projects, and repeated claims of enormous mineral reserves, mining remains a marginal contributor to Pakistan's national output, the report argues. 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 (SIFC) — established in 2023 — promised to accelerate foreign capital inflows. The gap between official projections and on-ground results is not new; it is structural.

Military's Growing Role in Economic Governance

Pakistan's military establishment's expanding commercial influence increasingly overlaps with economic policymaking and foreign investment decisions. The report argues that the military is becoming a principal intermediary between foreign investors and the country's strategic resources. The SIFC was created specifically to fast-track investment in sectors including mining, agriculture, energy, and technology — a mandate that critics say consolidates institutional power outside civilian oversight. '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,' the report warns.

US Engagement and the Khyber Pakhtunkhwa Question

Washington's interest in Khyber Pakhtunkhwa (KP)'s mineral wealth was underscored by a series of high-level diplomatic engagements. US Charge d'Affaires Natalie Baker held meetings with Governor Faisal Karim Kundi in June and July 2026, followed by discussions with KP Assembly Speaker Babar Saleem Swati in August 2026 on critical minerals, energy, and security cooperation. These engagements took on added significance when governor's rule was imposed in KP in October 2026. '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 notes.

Constitutional Fault Lines Over Mineral Rights

Pakistan's Eighteenth Constitutional Amendment strengthened provincial autonomy, including authority over most solid minerals. Any expansion of federal or military influence over mineral licensing therefore carries direct constitutional and political implications, the report cautions. These concerns are particularly acute in Khyber Pakhtunkhwa, where control over mineral resources was already a source of political and constitutional disagreement before the emergency. The displacement of ordinary provincial executive authority during governor's rule raises pointed questions about how mining concessions, regulatory approvals, and resource-related investment decisions will be managed in the interim, according to the report.

What This Means for Pakistan-US Ties

This is not the first time Pakistan has attempted to leverage its resource base to attract Western investment and shore up a strained relationship with Washington. What makes the current moment distinct is the convergence of US interest in de-risking critical mineral supply chains — accelerated by geopolitical competition with China — and Pakistan's own economic desperation. The risk, the report suggests, is that American strategic interest may inadvertently entrench governance arrangements that undermine the civilian institutions Washington publicly says it supports. How Islamabad and Washington navigate the constitutional, commercial, and security dimensions of this emerging partnership will determine whether it marks a genuine turning point or another chapter in a long history of unfulfilled potential.