Pakistan sits on one of the most under-exploited mineral endowments in the world. The Reko Diq deposit in Balochistan alone is estimated to hold one of the largest untapped copper-gold reserves on the planet. The Saindak copper-gold project has been producing for years under a foreign operator, yet its benefits have barely touched the local economy. Across Balochistan and KP lie vast, largely unmapped belts of copper, gold, chromite, and other industrial metals. By any reasonable estimate, this is a multi-billion-dollar endowment sitting mostly idle. The question that should trouble every economic policymaker in Islamabad is not whether this wealth exists, but why it remains so persistently unmonetized.
The answer lies less in geology than in governance. Mining is a capital-intensive, long-horizon business: it can take a decade or more between discovery and first commercial production, and each stage; exploration, feasibility, environmental clearance, construction, extraction, and processing; requires patient capital willing to wait years for a return. Pakistan’s mining sector has struggled to attract that capital not for lack of resources in the ground, but because of a familiar set of structural weaknesses: opaque contract negotiations, disputes over valuation and revenue-sharing between federal and provincial authorities, weak enforcement of royalty payments, and a near-total absence of any mechanism for ordinary Pakistanis to participate in the wealth generated from their own soil. The prolonged Reko Diq arbitration dispute, which cost the national exchequer billions of dollars in an international award before a renegotiated settlement was reached, is the clearest illustration of what happens when contracts are struck without transparency and revisited only after the damage is done.
Blockchain-based tokenisation, integrated with a regulated digital investment platform, offers a practical way to address several of these weaknesses at once: not by replacing the role of govt or established mining houses, but by changing the plumbing through which capital, revenue, and information flow.
How it would work: The starting point is the same structure now being piloted for infrastructure projects more broadly: an independent, SECP-registered Special Purpose Vehicle formed around a specific mining asset, once govt due diligence and licensing are complete. Rather than financing the entire project through a single sovereign partner or a narrow consortium of institutional investors, the SPV’s capital structure can be broken into distinct, separately tokenised revenue streams; the extraction and sale of ore, an associated processing or smelting facility, the power and water infrastructure built to support the site, and downstream logistics such as rail haulage or port handling. Each stream carries its own risk and return profile, and each can be opened, in part, to a wider pool of investors than the handful of large mining houses and sovereign wealth funds that currently dominate the sector.
Every transaction: capital raised, royalties paid, revenue distributed; is recorded on a distributed ledger, giving federal and provincial govts, regulators, and investors a shared, tamper-resistant record of the project’s finances from the day capital is raised to the day the mine reaches maturity. In a sector where disputes over how much revenue a project actually generated, and how it was shared, have repeatedly ended up in international arbitration, a transparent and auditable ledger removes much of the ambiguity that has made past agreements so contentious.
Why this matters for Pakistan specifically: Three features of the local context make this model unusually well-suited to mining rather than a mere imported fashion. First, mineral rights in Pakistan are constitutionally a provincial subject, and much of the friction in past mining agreements has stemmed from unclear or contested revenue-sharing between provinces and the federation. A tokenised structure with automated, rule-based royalty distribution can enforce an agreed sharing formula in code, rather than leaving it to renegotiation after production has begun. Second, Pakistan’s remittance inflows; tens of billions of dollars a year; currently find few productive domestic outlets beyond real estate and govt debt. Fractional ownership of a mining project, regulated and liquid through secondary trading, gives the diaspora and domestic savers alike a tangible, transparent way to invest directly in the extraction of the country’s own resources, rather than in speculative land purchases. Third, and perhaps most importantly, public trust in mining deals has been badly damaged by episodes like Reko Diq’s initial licensing dispute. A structure in which citizens themselves hold a visible, tradeable stake in a project; and can see, in real time, how much ore is produced, at what price it is sold, and how the proceeds are shared; offers a more durable form of political legitimacy than a contract negotiated behind closed doors between a govt and a single foreign partner.
None of this removes the need for sound geological due diligence, credible environmental and community safeguards, or experienced mining operators; those fundamentals do not change. What it changes is who can participate in financing a project once those fundamentals are in place, and how transparently the resulting revenue is tracked and shared. Regulatory bodies retain full oversight, and in most structures a direct equity stake, while being relieved of the burden of directly managing investor relations project by project.
A blockchain-enabled, SECP-regulated tokenisation model will not by itself produce a single ounce of copper or gold. But it can remove one of the most persistent obstacles to development of this sector: the absence of a transparent, trustworthy channel through which capital can reach the mine, and revenue can flow back to the country and its citizens, without disappearing into years of dispute. That is a modest but meaningful use of technology in service of a resource Pakistan has owned all along.
The writer is a retired military officer and PhD Finance (Venture Capital investment in countries with fragile economies and weak institutions-a case of Pakistan). Can be reached at [email protected]
