US firm makes a $500 million investment deal with Pakistan for critical minerals

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ISLAMABAD (AP) — A U.S. metals company signed a $500 million investment deal with Pakistan on Monday.

Pakistan’s Frontier Works Organization — which is the country's largest miner of critical minerals — signed a memorandum of understanding with Missouri-based U.S. Strategic Metals for collaboration plans that include setting up a poly-metallic refinery in Pakistan.

The deal comes after Washington and Islamabad last month reached a trade agreement that Pakistan hoped would attract American investment in its minerals and oil reserves.

U.S. Strategic Metals is focused on producing and recycling critical minerals, which the U.S. Department of Energy has defined as essential in a variety of technologies related to advanced manufacturing and energy production.

A second agreement was signed between the National Logistics Corp of Pakistan and Mota-Engil Group, a Portuguese engineering and construction company.

A statement from Prime Minister Shehbaz Sharif's office said he held talks with the delegation from U.S. Strategic Metals and Mota-Engil over Pakistan’s copper, gold, rare earths and other mineral resources.

The sides expressed readiness to develop value-added facilities, enhance mineral processing capacity, and undertake large-scale projects tied to mining, the statement said.

“The partnership will begin immediately with the export of readily available minerals from Pakistan, including antimony, copper, gold, tungsten, and rare earth elements,” it added.

The U.S. embassy in Pakistan said in a statement: “This signing is yet another example of the strength of the U.S.-Pakistan bilateral relationship that will benefit both countries.”

Earlier this year, Sharif claimed that Pakistan possesses mineral reserves worth trillions of dollars, and foreign investment in the mineral sector could help the country overcome its prolonged financial crisis and free itself from the burden of massive foreign loans.

Most of Pakistan's mineral wealth is in the insurgency-hit southwestern Balochistan province, where separatists have opposed the extraction of resources by Pakistani and foreign firms.

In August, the U.S. State Department had designated the Balochistan National Army separatist group and its fighting wing, the Majeed Brigade, as a foreign terrorist organization.

Oil and minerals reserves have also been found in the southern Sindh, eastern Punjab and northwestern Khyber Pakhtunkhwa bordering Afghanistan.

Several companies have already signed agreements with Pakistan in the mining sector. They included the Canadian firm Barrick Gold, which already owns a 50% stake in the Reko Diq gold mine in Balochistan.