Insurgency in Pakistan Threatens US Mining Ambitions in the Region

In December 2025, the United States approved $1.3 billion in Export-Import Bank financing for the Reko Diq copper-gold mine in Pakistan's Balochistan province [1]. The deal was announced as part of "Project Vault," a $10 billion US initiative to restructure global critical mineral supply chains [2]. Three months later, the Baloch Liberation Army launched coordinated attacks across the province, killing dozens and reinforcing what mining executives, insurgents, and Pakistan's own military already knew: the gap between Washington's mineral ambitions and ground-level reality in Balochistan is vast and growing.

The Prize: What's in the Ground

Reko Diq sits atop one of the world's largest undeveloped copper-gold deposits. Geological surveys estimate 5.9 billion tonnes of ore at an average copper grade of 0.41%, plus 41.5 million ounces of gold [3]. At current commodity prices, the project's lifetime free cash flow is projected at over $70 billion across 37 years [3]. When fully operational, it would rank as the world's fifth-largest copper mine, producing 200,000 metric tons of copper annually in its first phase, doubling after expansion [4].

Beyond Reko Diq, Pakistan claims mineral reserves worth between $6 trillion and $8 trillion, though independent verification is limited — more than 95% of the country's mineral terrain remains underexplored, and no internationally certified reserve estimates exist for most deposits [5]. Rare earth oxide potential is estimated at 100,000 to 500,000 tonnes, placing Pakistan as a possible Tier-2 source alongside Vietnam or Myanmar [5].

Source: Various sources

Data as of Mar 1, 2026CSV

Total committed investment now exceeds $9 billion: Barrick Gold has pledged $7 billion for Reko Diq's development; the US EXIM Bank approved $1.3 billion in financing; Missouri-based US Strategic Metals signed a $500 million deal for a polymetallic refinery; and the Asian Development Bank added $410 million [1][6][7].

The Threat: An Insurgency That Won't Stay Low-Level

Balochistan's separatist insurgency dates to 1948, but its recent escalation has transformed it from a peripheral security concern into a direct threat to foreign investment.

Source: Pakistan Institute for Peace Studies / ACLED

Data as of Jan 15, 2026CSV

In 2024, violent attacks by Baloch insurgents rose 119% from the previous year, with over 300 strikes against Pakistani forces and foreign projects [8]. The Baloch Liberation Army's "Operation Herof 2" — launched in August 2024 — killed more than 70 people in a single coordinated wave, including 23 civilians [9]. In 2025, the Pakistan Institute for Peace Studies recorded at least 254 attacks resulting in more than 400 deaths [10].

The insurgent coalition known as Baloch Raaji Aajoi Sangar (BRAS) — which includes the BLA, the Balochistan Liberation Front, and affiliated factions — has explicitly warned Barrick Gold to abandon Reko Diq, calling mega-development projects "exploitative" [11]. Their tactical repertoire has expanded to include suicide bombings (including by women), temporary territorial seizures, and targeted killings of foreign nationals [12].

The BLA's commander Bashir Zeb stated publicly that attacks would continue until Balochistan achieves independence and outside actors stop extracting resources without local consent [10].

Who Gets Paid: Revenue Sharing and Its Discontents

Under the reconstituted Reko Diq agreement (finalized in 2022 after the resolution of an $11 billion international arbitration dispute), ownership is split: 50% Barrick Gold, 25% Pakistani state-owned enterprises, and 25% the Province of Balochistan [13]. Balochistan's 25% stake is "fully funded" and "free carried" — meaning the province receives dividends and royalties without contributing capital [13].

As of mid-2025, Reko Diq Mining Company had paid $17.5 million in royalties to the Balochistan government, $3.8 million in taxes, and $7.2 million in community investment [14]. Advance royalty payments to the provincial government are capped at $5 million in year one, rising to $10 million annually, with a cumulative $50 million ceiling before commercial production begins [14].

Critics argue this structure falls short. The Friday Times reported that local communities near the mine site receive minimal direct benefit, with most royalty payments flowing to the provincial capital Quetta rather than to affected districts [15]. Baloch rights activist Dr. Mahrang Baloch has publicly denounced "the lack of consent of Baloch people for the Reko Diq project," citing forced evictions and environmental degradation [16].

By comparison, the Democratic Republic of Congo's 2018 mining code mandates a 10% free-carried interest for the state plus a 0.3% community development fund tied directly to production revenue [17]. Afghanistan's Mes Aynak copper agreement with China allocated 19.5% royalties but collapsed amid conflict. The Reko Diq structure's 25% provincial stake is nominally generous, but the absence of a direct community revenue mechanism — separate from provincial government discretion — echoes patterns that have fueled grievances elsewhere.

Constitutional and Legal Challenges

Pakistani civil society organizations have raised several constitutional objections. Under Pakistan's 18th Amendment (2010), mineral resources fall under provincial jurisdiction, yet the federal government negotiated the Reko Diq reconstitution and brought in international arbitration resolution at the national level [18]. Baloch rights groups, including the Baloch Yakjehti Committee, argue that Article 172(3) of the Constitution — which grants provinces ownership of natural resources — has been effectively bypassed [16].

The original Reko Diq concession was struck down by Pakistan's Supreme Court in 2013 on grounds of illegality and corruption in the licensing process. The reconstituted agreement was structured to avoid similar legal vulnerability, but no fresh consent mechanism was established for affected Indigenous communities [18].

The Human Cost: Disappearances and Displacement

The scale of human rights violations in Balochistan overlapping with mining concession areas is documented by multiple sources. The Human Rights Council of Balochistan reported 830 enforced disappearances and 480 killings across the province in 2024 alone [19]. In 2025, the Baloch Yakjehti Committee documented over 1,250 further cases of enforced disappearance, with 151 in March 2025 alone alongside 80 extrajudicial killings [20].

In April 2025, UN human rights experts urged Pakistan to address violations in Balochistan, citing patterns of enforced disappearances, extrajudicial killings, and repression of Indigenous populations "under the guise of counter-terrorism operations" [21]. A December 2025 communication from UN Special Procedures to Pakistan's government raised concerns about "cyanide contamination in grazing areas" and environmental damage linked to mining operations [16].

The Baloch National Movement alleges systematic displacement in resource-rich regions, with military operations aimed at controlling natural resources [19]. These allegations create potential legal exposure for US-connected companies. Under the Alien Tort Statute (ATS), non-US citizens can file suits in US federal courts for international law violations, including aiding and abetting government abuses [22]. However, the US Supreme Court has progressively narrowed ATS applicability — in Nestlé v. Doe (2021) and Jesner v. Arab Bank (2018), the Court restricted both extraterritorial claims and corporate liability [22]. Current legal consensus suggests that direct ATS liability for Barrick (a Canadian company) or US financiers is limited, though reputational and regulatory risks remain substantial.

China's Parallel Gamble — and What It Tells Us

China's experience in Balochistan offers a cautionary precedent. Beijing's state-owned Metallurgical Corporation of China (MCC) has operated the Saindak copper-gold mine since 2002, with contracts repeatedly extended through 2022 and beyond [23]. Despite two decades of presence, Saindak's output has remained modest — approximately 15,000 tonnes of copper concentrate annually — and the project has faced persistent allegations of unfavorable revenue terms for Pakistan (with China retaining an estimated 80-90% of proceeds during early lease periods) [23].

China-Pakistan Economic Corridor investments in Balochistan, totaling over $60 billion across all sectors, have faced the same insurgent targeting. BLA attacks on Chinese nationals, the Chinese consulate in Karachi, and CPEC infrastructure have made Pakistan one of the highest-risk environments for Chinese overseas workers [12].

Reko Diq's projected timeline — construction starting 2025, first production in 2028 — assumes security conditions permit continuous development [4]. If the insurgency escalates further, that timeline could slip by years. China's Saindak experience suggests that operating under persistent low-level threat is possible but constrains output and profitability. A full-scale insurgent campaign targeting Reko Diq specifically — which BRAS has promised — could make the 2028 target unachievable.

The Steelman Case for US Investment

Proponents of US engagement argue several advantages over the Chinese model:

Labor and environmental standards: Barrick Gold operates under International Finance Corporation performance standards and has committed to environmental and social impact assessments that Chinese state-owned enterprises at Saindak never conducted [24]. The ADB's $410 million contribution carries mandatory social safeguards including Indigenous Peoples frameworks [7].

Revenue terms: Balochistan's 25% equity stake — with no capital contribution required — exceeds what most Chinese mining agreements in developing countries offer. China's Saindak deal was widely criticized for returning less than 10% of value to Pakistan during its initial operating period [23].

Transparency: The Reko Diq arbitration resolution was conducted under international law, with the agreement's broad terms publicly available. CPEC contracts remain largely classified, with Pakistan's National Assembly repeatedly denied access to full terms [25].

Employment: Barrick projects 7,500 direct jobs in Balochistan during construction, with commitments to local hiring preferences [1].

However, critics counter that these advantages are theoretical until production begins. Dr. Mahrang Baloch and the Baloch Yakjehti Committee argue that regardless of corporate standards, the fundamental issue is extraction without genuine free, prior, and informed consent of Indigenous populations — a standard that neither US nor Chinese-backed projects have met [16].

Strategic Fallback: If Pakistan Fails

If Reko Diq and broader Pakistani mining ambitions stall, the US faces constrained alternatives for critical mineral diversification:

Australia: The $8.5 billion US-Australia rare-earth framework, backed by the Defense Department and EXIM Bank, anchors the most developed alternative pathway. Lynas Rare Earths already operates the only non-Chinese rare earth processing facility of scale [26]. Australia holds over 40 minerals on the US critical list [26].

Canada: Offers geological diversity and regulatory stability, but most Canadian critical mineral projects remain in exploration or early development phases, with commercial production 5-10 years away for most sites [27].

Domestic production: The US Mountain Pass mine (owned by MP Materials) produces rare earth concentrate but sends most material to China for processing — a vulnerability that new domestic processing facilities aim to address by 2027-2028 [27].

Distributed supply chains: Washington has signed critical mineral agreements with Saudi Arabia (rare earths refinery), Cambodia, Malaysia, and Thailand, pursuing a "distributed" model where different allies host different processing stages [26].

The timeline gap is significant. If Pakistan's projects fail, copper shortfalls would be partially offset by Chilean, Peruvian, and Congolese production within 2-3 years. But for rare earths, replacing potential Pakistani output with fully operational Western-aligned alternatives would take 5-8 years — a period during which Chinese supply dominance (currently ~70% of mining and ~90% of processing) would remain intact [27].

What Comes Next

Pakistan's military has announced a new special force dedicated to guarding Balochistan's mineral assets, while Barrick Gold has reportedly reviewed its security protocols for the Reko Diq site [28]. The Pakistani government frames intensified counterterrorism operations as necessary preconditions for investment [29]. But Chatham House analysts have warned that "brute force will not end Pakistan's Balochistan insurgency" — that military operations without political resolution of Baloch grievances tend to produce more recruits than they eliminate [9].

The fundamental tension remains unresolved: Washington needs the minerals, Islamabad needs the investment, Barrick needs the returns, and Baloch communities say they were never asked. Until that last element is addressed through mechanisms beyond royalty payments to a provincial government that many Baloch do not consider legitimate, the insurgency retains both its grievance and its targets.

The $9 billion question is whether any of these actors will change course before the next coordinated attack makes the decision for them.