Gulf countries need access to a suite of critical minerals to fulfil their ambitions in clean energy manufacturing and data centres.
But a competitive, insecure world divided by rising trade barriers and resource nationalism makes that a tough task. They have delved under their own sands and spent ambitiously to build up positions in a range of locations from Africa to South America. But perhaps part of the solution is in a familiar country close to home.
In a remote corner of Pakistan’s Balochistan province lies the world’s largest undeveloped copper-gold deposit. Reko Diq could become the eighth biggest copper mine in the world, joining a list dominated today by Latin America. A consortium of Canadian miner Barrick and government companies intends to start production by 2028.
New copper resources are badly needed. The reddish metal is essential for efficient electrical systems. Electric cars contain more than a mile of copper wiring and require two to four times as much metal as a traditional petrol or diesel vehicle.
Data centres today use about half a million tonnes of copper annually. Australian mining giant BHP projects that will grow six times to about three million tonnes by 2050.
Existing mines are increasingly mature, with diminishing ore grades. Key sites in Peru, Chile and the Democratic Republic of Congo have been disrupted by repeated strikes and community protests. At $5.2 per pound, up from $2 a decade ago, copper prices are at a nominal all-time high.
Copper is just one of a set of prominent minerals crucial to new energy, military and AI technologies. Lithium, cobalt, copper, nickel, tin, silver and rare earths such as dysprosium and neodymium, are all high-profile examples. With a few exceptions – such as phosphate and helium, and some gold and copper – the Middle East and North Africa region is not known to be very rich in such deposits.
The Gulf countries are aware of the challenge and opportunity. The US is increasingly looking to defuse Chinese control over mineral supply chains and is keen on alignment with Gulf partners. Apart from geopolitically dubious suggestions made to Greenland, Venezuela and Ukraine, more solid prospects lie within the wider arc of Gulf influence, from Africa to Central and South Asia.
Saudi Arabia’s state-owned Ma'aden has a joint venture with Barrick to mine copper in the kingdom, and the Manara partnership of Ma'aden and the Public Investment Fund acquired a 10 per cent stake in the copper and nickel unit of Brazilian giant Vale in 2023. Ma'aden also looked at buying 15 per cent of Reko Diq for $540 million earlier this year, before apparently deciding against it.
Oman recently restarted copper mining in its mountains. In June last year, the Qatar Investment Authority put $180 million into critical minerals group TechMet, which targets “Western-aligned supply” of lithium, cobalt and nickel.
Abu Dhabi government holding company ADQ established a $1.8 billion venture with the US government and private equity group Orion in October to access lithium and rare earths. And International Resources Holding, part of the IHC conglomerate, purchased a controlling share of the Mopani copper mine in Zambia last year for $1.1 billion.
Pakistan hopes to capture some of this interest. As well as copper, it hosts important resources of chromite across Balochistan and Khyber-Pakhtunkhwa, and antimony in Balochistan.
Chromium is used to make corrosion-resistant steels, while antimony has applications in ammunition, explosives and batteries. China, which produces nearly half the world’s supply, put strict restrictions on the export of antimony in November.
Further exploration might also turn up commercial deposits of rare earths, lithium, nickel and cobalt in Balochistan and Gilgit-Baltistan.
In April, Islamabad will host the Pakistan Minerals Investment Forum. The intent is to be very specific about real opportunities, bringing in Gulf and other investors to speak to national mining institutions and policymakers. Encouraging them to attend, Ahmed Hayat Lak, chief executive of state-owned Oil and Gas Development Company said: “Pakistan is positioned as a strategically important supplier with significant resource potential and a clear commitment to modern and transparent development.”
As an underexplored but emerging mining jurisdiction, Pakistan is upgrading its geological survey with a new laboratory, and plans a national Minerals Data Centre to provide standardised, geo-referenced information.
New mines can be electrified from the start to reduce greenhouse gas emissions and employ AI and automation to cut costs and improve safety.
Pakistan has long had a very close economic relationship with its superpower neighbour, China, across the Karakoram Mountains. The Saindak copper deposit, 90 kilometres from Reko Diq, has been mined since 2002 by Metallurgical Corporation of China. While Islamabad says it earned $2 billion from Saindak up to 2017, local Baloch have complained that China is exploiting their resources, and they are not seeing the benefits.
Such problems give Washington a chance to exploit discontent against Beijing and encourage Pakistan to seek supplements to Chinese investment. US Secretary of State Marco Rubio met Pakistani Deputy Prime Minister Mohammad Ishaq Dar in July to discuss co-operation in critical minerals.
In neighbouring Afghanistan, another massive Chinese-run copper mine, Mes Aynak, has been mired in problems of security, damage to historic sites, and contractual disputes.
The Gulf has close historic, geographic, economic and personal links to Pakistan. The South Asian country has its economic and security problems, particularly in minerals-rich Balochistan. But it is still a very natural and promising place for the Gulf countries to further their hunt for critical metals.
