Pakistan, Australia Eye Mining Partnership

In a significant move signaling deepening economic ties, Pakistan and Australia are actively exploring a structured mining partnership that could transform Pakistan’s under‑developed mineral sector while offering Australian firms new avenues for investment and collaboration. High‑level talks between Pakistani officials and Australian diplomatic representatives have set the stage for what could become a long‑term bilateral engagement in mining, gemstones and technical cooperation.

A New Chapter in Bilateral Cooperation

On January 27, 2026, Federal Minister for Petroleum Ali Pervaiz Malik met with Australia’s newly appointed High Commissioner to Pakistan, Timothy Kane, in Islamabad to discuss ways to deepen cooperation in the mining and gemstones sectors. During the meeting, both sides underlined the urgency and opportunity to elevate economic ties beyond traditional trade and investment.

The highlight of these discussions was the proposal for an Intergovernmental Agreement (IGA) between Pakistan and Australia to establish structured, long‑term cooperation in the mining sector. Such an agreement — still under discussion — would aim to provide a stable institutional framework for joint ventures, technology transfer and sustained investment activities.

According to official statements, the minister welcomed strong interest from Australian companies in Pakistan’s mineral landscape, particularly in resource‑rich regions such as the Tethyan Belt — which includes the world‑famous Reko Diq area — rich in copper, gold and other precious metals.

Why This Partnership Matters

Pakistan is estimated to hold substantial untapped mineral wealth, yet the sector contributes only a small fraction of gross domestic product due largely to limited exploration, infrastructure gaps and insufficient investment.

Minerals like copper, gold, zinc, coal and gemstones are not only valuable for exports but are also critical for supporting Pakistan’s industrialization and energy transition ambitions. The global demand for copper and gold, in particular, has risen with their applications in renewable energy technologies and advanced electronics.

Australian companies — known globally for mining expertise — have a long history of engagement in Pakistan’s mineral landscape. Australian partnership in projects like Reko Diq and ongoing interest in joint ventures could bring technology, capital and skills to Pakistan’s mining sector.

The Reko Diq Opportunity

At the center of this cooperation narrative is the Reko Diq Mine in Balochistan — considered one of the largest undeveloped copper and gold deposits in the world. Current estimates suggest that Reko Diq might contain billions of tonnes of copper resources and tens of millions of ounces of gold.

Australian companies are already active in the Reko Diq project, and additional Australian firms have expressed interest in expanding their role, according to High Commissioner Kane. This renewed interest underscores the broader appetite among Australian mining firms to invest in promising global projects.

While past legal disputes over the Reko Diq lease have cast long shadows — including arbitration and settlement issues tied to earlier contracts with Australian‑linked firms — current developments suggest a more cooperative and mutually beneficial framework is emerging.

Boosting Skills and Local Capacity

Beyond direct investment, Pakistan and Australia have also pitched knowledge sharing and training programs as core components of their emerging partnership. Officials have pointed to collaboration between Australian universities, mining companies and Pakistani institutions to equip local workers with modern techniques and industry standards.

Technical assistance could be especially valuable for Pakistan’s gemstones sector, which holds potential for export value addition and employment generation but remains under‑formalized. Structured cooperation in this segment could elevate craftsmanship, quality standards and global market access for Pakistani gemstones.

Economic and Strategic Implications

A sustained mining partnership with Australia promises multiple benefits for Pakistan’s economy, including:

Increased Foreign Direct Investment (FDI): Opening up the mineral sector to Australian mining firms could attract capital inflows and stimulate associated industries.

Job Creation: Mining and related infrastructure development can generate employment across regions, especially in underdeveloped areas.

Technology Transfer: Access to advanced extraction and processing technologies can boost efficiency, safety and environmental compliance.

Exports and Revenue: Enhanced mining operations can augment export portfolios and diversifiy revenue streams for the economy.

For Australia, this partnership aligns with its global resource strategy, offering opportunities for its mining sector to engage in high‑potential markets and strengthen economic ties with South Asia.

Challenges and Considerations

Despite optimism, several challenges remain:

Regulatory framework: Developing clear, investor‑friendly policies and transparent legal frameworks will be crucial to secure long‑term investments.

Infrastructure: Pakistan must continue to build infrastructure — from roads and energy to ports — that supports efficient mining operations.

Environmental and Social Governance: Balancing economic gains with sustainable and socially responsible mining practices will be essential to avoid local discontent and ecological harm.

Looking Ahead

As Pakistan and Australia continue discussions on an Intergovernmental Agreement and investment strategies, both sides appear committed to a long‑term partnership that could redefine Pakistan’s mining sector. The proposed cooperation — blending investment, skill development and institutional support — has the potential to unlock billions of dollars in mineral wealth, catalyze economic growth, and deepen bilateral relationships.

If structured effectively, this partnership could become a model for international cooperation in resource development, charting a new path for Pakistan’s journey toward economic modernization and global integration.