The Belt and Road Initiative (BRI) is entering a new phase. China’s overseas engagement is moving beyond roads, ports and power plants towards mineral processing, advanced manufacturing, energy technologies and industrial supply chains.
CPEC
The Belt and Road Initiative (BRI) is entering a new phase. China’s overseas engagement is moving beyond roads, ports and power plants towards mineral processing, advanced manufacturing, energy technologies and industrial supply chains.
During the first half of 2026, Chinese BRI investment and construction engagement reached $126.4 billion. Metals and mining attracted $21.8 billion, accounting for 17.2 per cent of total engagement and becoming the second-largest sector after energy. For Pakistan, this shift presents an opportunity to place minerals at the centre of CPEC’s next economic chapter.
The important change is not only the growing volume of Chinese mineral engagement, but its changing composition. Around 80.6 per cent of metals and mining engagement was linked to processing activities rather than extraction, while nearly 85 per cent of investment -- around $13 billion -- went into processing-related projects. China is increasingly investing in smelters, steel plants, aluminium facilities and mineral-based manufacturing. The emerging BRI model is therefore focused on value chains, not simply resource extraction. This offers an important lesson for Pakistan.
Pakistan enters this transition with considerable geological potential but limited economic returns. The country has around 92 known minerals, of which 52 are commercially extracted, with nearly 5,000 operational mines producing approximately 68.5 million metric tonnes annually. Yet, the mineral sector contributes only 2–3 per cent to GDP, and exports remain dominated by raw or semi-processed products.
Copper concentrate is Pakistan’s leading mineral export, generating around $842 million in 2024, while salt, stone, plaster, lime and cement-related products contributed more than $500 million. The country also exports chromite, lead-zinc concentrates, marble, gypsum and gemstones. However, much of this trade captures limited value because processing and downstream industries remain underdeveloped. The central challenge is therefore not the availability of resources, but the ability to transform mineral wealth into higher-value products through stronger institutions, technology, processing capacity and industrial linkages.
Pakistan’s strongest opportunity lies in copper and gold. Reko Diq represents one of Pakistan’s most significant mineral assets, with estimated to contain about 13.1 million tonnes of copper and 17.9 million ounces of gold over a projected 37-year mine life. Pakistan also possesses copper resources at Saindak, lead and zinc at Duddar, chromite in Balochistan and Khyber Pakhtunkhwa, and prospects for lithium, nickel, cobalt and rare-earth minerals. Much of this geology remains underexplored. Pakistan’s location on the Tethyan Metallogenic Belt gives it the potential to host additional large copper-gold systems, but geological promise should not be confused with economically recoverable reserves.
China is already familiar with Pakistan’s mineral sector. Chinese companies have operated the Saindak copper-gold project and the Duddar lead-zinc mine, while CPEC facilitated Chinese involvement in Thar coal mining and mine-mouth power generation. This experience gives both countries an institutional starting point. The next phase of CPEC should focus not only on mining but also on processing facilities, metallurgical expertise, testing laboratories, engineering services and mineral-based industries.
The development of Balochistan’s mineral resources must be part of a broader economic transformation strategy. Local employment, technical training, revenue sharing, water protection and community infrastructure should be incorporated into project agreements
Copper illustrates the scale of the opportunity. It is indispensable for transmission networks, renewable energy systems, electric vehicles, data centres and industrial electrification. If Pakistan exports only copper concentrate, much of the value is captured during refining and manufacturing outside the country. A more ambitious approach would explore domestic capabilities in selected areas such as refining, cable manufacturing, electrical equipment and other copper-based industries. The objective is not complete self-sufficiency but capturing a greater and feasible share of value within Pakistan.
CPEC Phase-I laid the foundation required for such transformation. It added 8,904MW of generation capacity, developed over 1,000 km of transport infrastructure, strengthened transmission networks and advanced Gwadar’s connectivity. Pakistan also remains the largest historical recipient of Chinese BRI energy engagement, with cumulative energy-related engagement exceeding $41.5 billion since 2013. The next challenge is to connect this infrastructure with productive activity. Roads and power plants become economically transformative only when they lower the cost of producing and exporting competitive goods.
A mineral corridor linking Chaghi and other resource-bearing areas with Gwadar could therefore become an important CPEC 2.0 initiative, but its design will determine its value. A corridor that merely moves raw minerals to a port will reproduce an extractive model. A productive corridor should integrate reliable electricity, water infrastructure, mineral-processing zones, railway and road links, skills development centres and local supplier network. Gwadar should serve as a wider logistics and industrial ecosystem connecting mines, processing facilities and regional markets.
Energy will remain a critical enabler. Mining, crushing, concentration, smelting and refining are energy-intensive activities. Pakistan cannot attract downstream mineral industries without reliable electricity at competitive prices. Future Pakistan-China energy cooperation should therefore focus on integrated industrial energy systems combining renewable generation, storage, transmission improvements and dedicated power supply for mineral zones. The next phase of CPEC energy cooperation should support productive capacity, not only electricity generation.
The policy barriers are equally significant. Investors in mining work with long construction periods and payback horizons extending over decades. They require predictable taxation, security of tenure, transparent licensing and clear federal-provincial responsibilities. Pakistan’s royalty structures differ considerably across provinces. The wider fiscal burden can also make potential mines commercially unattractive. Harmonising regulatory frameworks while respecting provincial responsibilities will be essential for creating investor confidence.
The development of Balochistan’s mineral resources must be part of a broader economic transformation strategy. Local employment, technical training, revenue sharing, water protection and community infrastructure should be incorporated into project agreements. Environmental assessments must examine cumulative impacts on groundwater, biodiversity and local livelihoods rather than becoming procedural formalities. Responsible mining is not contrary to investment; it protects projects from social opposition, regulatory disputes and long-term reputational damage.
The H1 2026 BRI report recorded no new qualifying Chinese investment announcement or construction contract in Pakistan, even as BRI metals and mining engagement reached record levels elsewhere. This should not be presented as Chinese disengagement. It is a policy signal that Pakistan must offer investable projects aligned with the new BRI economy. As Chinese private companies now account for nearly 48 per cent of total BRI engagement, Pakistan must also expand beyond G2G negotiations and directly target Chinese mining, metallurgical, equipment and manufacturing firms.
CPEC’s first decade helped Pakistan overcome infrastructure and electricity shortages. Its next decade should help the country overcome its low-productivity and weak-export structure. Success will not be measured by claims of mineral wealth, the number of memoranda signed or the volume of ore extracted. It will be measured by how much processing takes place locally, how many Pakistani suppliers and technicians participate, and how much value reaches mineral-bearing communities. Pakistan’s mineral opportunity is underground. Its real economic value will depend on what Pakistan and China build above it.
The writer specialises in energy policy and management.He works at the CPEC Centre of Excellence, PIDE and can be reached at: [email protected]
