ISLAMABAD:
Pakistan plans to offer concessions to US companies to invest in its mining sector as part of negotiations with Washington over tariffs, its commerce minister told Reuters, as Islamabad seeks to capitalise on the Trump administration’s interest in boosting trade with South Asia.
Pakistan faces a potential 29% tariff on exports to the United States due to a $3 billion trade surplus with the world’s biggest economy, under tariffs announced by Washington last month on countries around the world. Tariffs were subsequently suspended for 90 days so negotiations could take place.
Federal Minister for Commerce Jam Kamal said that Islamabad will offer US businesses opportunities to invest in mining projects primarily in Balochistan through joint ventures with local companies, providing concessions like lease grants.
The minister said that would be in addition to efforts to increase imports from the United States, particularly cotton and edible oils, which are currently in short supply in Pakistan.
Pakistan would put its offer of concessions for mining investment to US officials during talks over tariffs in the coming weeks. Kamal did not give further information on the bidding process of these mines or other details.
“There is untapped potential for US companies in Pakistan, from mining machinery to hydrocarbon ventures,” he said in an interview with Reuters conducted on Thursday.
The Reko Diq copper and gold mining project in Balochistan seeks up to $2 billion in financing, including $500 million to $1 billion from the US Export-Import Bank, with term sheets expected by early in the third quarter of this year, its project director told Reuters last month.
The mine could generate $70 billion in free cash flow and $90 billion in operating cash flow over its lifespan. US President Donald Trump has said that he’s working on “big deals” with both India and Pakistan, following Washington’s key role in brokering a ceasefire between Pakistan and India earlier this month following the worst fighting in decades between the nuclear-armed neighbours.
“The previous US administration focused more on India, but Pakistan is now being recognised as a serious trade partner,” Kamal said.
Pakistan will gradually lower tariffs in its upcoming federal budget, Kamal said. He said that the United States has not specified trade barriers or priority sectors. The US Embassy in Islamabad did not immediately respond to a request for comment.
