Dr. Ghulam Mohey-ud-din is an urban economist from Pakistan, currently based in the Middle East. He holds a PhD in economics and writes on urban economic development, macroeconomic policy, and strategic planning.

The increasing export restrictions on rare-earth processing machinery, synthetic-diamond tooling, and lithium-battery material that China has been imposing are not just technical trade adjustments; rather, they are tools of geoeconomic statecraft. By increasing the control of the processing technology and the technological inputs of the downstream manufacturing process through licensing, Beijing solidifies its control of the energy-transition supply chain even as it is changing mineral dependence into strategic capabilities.

In the case of Pakistan’s minerals, the consequences are short-term. Islamabad, over the years, has depended on the Chinese machinery, technical know-how, and capital in extractive operations; in Saindak copper-gold, and in exploratory activities in the rare-earth processing. However, with Chinese export controls tightening the access to advanced processing technologies, Pakistan has a structural dilemma to choose: should it continue being technologically dependent or should it diversify its strategic alliances?

Islamabad has chosen the path of diversification. A framework contract with one of the U.S. critical minerals companies is an indication that there is an attempt to establish the processing capacity domestically and enter the Western supply chains. Simultaneous engagement with Saudi Arabia will harness Pakistan’s mineral interests with the industrialization plans adopted by Riyadh in its Vision 2030, which will demand long-term sources of battery and magnet components. The fact that the concentration of rare-earth has been shipped to U.S. buyers early and in large quantities underlines that this turnaround is not symbolic.

The stakes are substantial. The mineral endowment of Pakistan is relatively high but not exploited. The copper-gold reserves........

© Paradigm Shift