The United States has announced that its Export–Import Bank will finance a $1.25-billion investment in Pakistan’s Reko Diq copper-gold project, a decision that has quickly drawn scrutiny because of the extreme security and logistical risks tied to the region. The commitment comes just months after Pakistan’s Army Chief, General Asim Munir, and Prime Minister Shehbaz Sharif visited the White House, showcasing what they claimed were rare-earth mineral samples from Pakistan. While the location of Reko Diq—close to Iran and Afghanistan—makes it geopolitically attractive, the mine is in militancy-hit Balochistan, where insurgent attacks on military assets and infrastructure have repeatedly stalled development.
In a video statement, US Chargé d’Affaires Natalie Baker announced that the Exim Bank had approved financing to support the extraction of critical minerals at Reko Diq. She said the project could eventually generate up to $2 billion worth of US equipment and services and create thousands of jobs in both countries. Yet the timing and scale of the investment have raised questions, especially since Reko Diq has remained largely inactive for decades due to land disputes, poor infrastructure and, above all, security threats from separatist and jihadist groups operating in the region.
Reko Diq, located in the remote Chagai district of Balochistan, is believed to be one of the world’s largest untapped copper and gold reserves, with an estimated 15 million tonnes of copper and 26 million ounces of gold. Despite its potential, the project has faced prolonged legal battles and operational standstills. Separatist leaders, including those from the Baloch National Movement, have warned that foreign involvement without the consent of local communities amounts to exploitation. They argue that the resources belong to the Baloch people, not the Pakistani state.
Global mining giant Barrick has already committed to restarting operations and expects production to begin by the end of 2028. The company owns 50% of the venture, while the federal and Balochistan governments own 25% each. Barrick has struggled for years to overcome political, legal and security challenges, but continues to view Reko Diq as a flagship project. International financial institutions such as the Asian Development Bank and the International Finance Corporation are helping assemble a financing package exceeding $2.6 billion, with additional interest from Saudi Arabia’s Manara Minerals, which is in talks to acquire up to a 20% stake.
The risks, however, remain severe. Balochistan regularly witnesses attacks on security forces and foreign-linked projects, prompting serious concerns about how Pakistan will secure the massive mine, its machinery and future transport corridors. Baloch rebel groups have openly warned investors that operating in the province is a “grave miscalculation” as long as the insurgency continues. Infrastructure gaps add to the challenge: the region lacks a functional railway line needed to transport copper concentrate to processing centres or to Karachi port, and building such infrastructure would be costly and time-consuming.
The broader geopolitical context also complicates the picture. As global demand for critical minerals surges, the US is looking for alternatives to Chinese-controlled supply chains. Pakistan, with its vast mineral deposits, is positioning itself as a future mining hub, and an updated feasibility study has paved the way for phase-one construction of the Reko Diq operation. Major equipment suppliers such as Caterpillar, Komatsu and Metso are already contracted, signalling international confidence in the project’s potential despite its risks.
Still, the long-term viability of the US-backed investment hinges on Pakistan’s ability to stabilise Balochistan, contain insurgent attacks and build the infrastructure required for sustained mining operations. Without these assurances, the $1.25-billion financing package remains a high-stakes gamble driven as much by strategic competition as by economic opportunity.
