The mineral-rich landscapes of Pakistan have quietly become the latest flashpoint in a global contest for critical resources, as the United States and China jockey for influence and access in South Asia. With rare earth elements now underpinning everything from smartphones and electric vehicles to advanced missile systems, the stakes have never been higher—and Pakistan, long a strategic pivot between East and West, finds itself once again at the heart of a high-stakes geopolitical tug-of-war.
On October 13, 2025, Beijing publicly addressed growing international speculation by stating that its newly tightened export controls on rare earths are unrelated to Pakistan’s recent mineral cooperation with the United States. According to China’s Foreign Ministry, the move was “a legitimate step taken by the Chinese government in accordance with the laws and regulations to improve its export control system, better safeguard world peace and regional stability, and fulfill its non-proliferation obligations,” as reported by Anadolu Agency. The message was clear: China’s actions, officials insisted, were not a response to Islamabad’s overtures to Washington.
But behind these diplomatic assurances, a more complex reality is unfolding. Just a month earlier, Pakistan’s Frontier Works Organization and the Missouri-based US Strategic Metals (USSM) signed a memorandum of understanding (MoU) on critical minerals, a deal reportedly worth millions and aimed at boosting US access to Pakistan’s rich reserves. The agreement was witnessed by Pakistan’s Prime Minister Muhammad Shehbaz Sharif, underscoring the significance Islamabad attaches to the partnership. According to the US Embassy in Islamabad, USSM specializes in the production and recycling of critical minerals vital for manufacturing and energy production.
This new chapter in US-Pakistan cooperation on minerals comes at a time when China and Pakistan have long touted their “all-weather strategic cooperative partnership.” Bilateral trade between the two countries soared to over $23 billion in 2024, while the US remains Pakistan’s largest export destination, with trade valued at around $7.2 billion. As China’s Foreign Ministry spokesman Lin Jian put it, “The ironclad friendship between China and Pakistan has stood the test of time, with both sides maintaining a high level of strategic mutual trust and close communication on major issues concerning their shared interests.”
Yet, the ground is shifting beneath this traditional alliance. As Salman Rafi Sheikh analyzed in Asia Times, a new mineral Cold War is taking shape on Pakistan’s horizon. Washington’s renewed interest in Islamabad is not just about minerals—it’s about regional influence. The US is reportedly eyeing not only Pakistan’s rare earth riches but also a potential seaport at Pasni, just 100 kilometers east of China’s massive Gwadar port development. Such a move would give Washington a logistical foothold on the Arabian Sea and direct access to the mineral corridors of Balochistan, while serving as a counterweight to China’s flagship Belt and Road Initiative (BRI) investments.
For years, Pakistan courted Chinese investment in its minerals sector, a strategy that made sense when relations with the US were frosty. During a 2024 visit to Beijing, Pakistan’s Prime Minister secured agreements to expand mining cooperation, including the development of industry parks and deep processing facilities. These efforts dovetailed with China’s own ambitions to tighten its grip over the global supply of rare earth materials—an area where Beijing already commands a dominant position.
But the election of Donald Trump and his administration’s imposition of tariffs on China triggered a new round of tit-for-tat measures. In April 2025, China imposed restrictions on seven key rare earth elements—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—along with export controls on rare earth magnets and related items. US manufacturers soon reported sharp declines in the supply of these critical components, leading to delays and higher costs in industries ranging from electric vehicles to defense systems.
China’s latest export control rules, set to take effect on November 8, 2025, go even further. They cover the entire rare earth value chain, from production and processing to separation technologies. Foreign firms seeking access to Chinese extraction or separation technology must now apply for export licenses, extending Beijing’s influence far beyond its borders. The new regime also bans outright the export of certain middle and heavy rare earth metals, alloys, and oxides, while requiring companies to identify any “dual use” items and disclose detailed technical parameters. The timing—just two days before the current US-China trade truce expires—has not gone unnoticed in Washington.
Pakistan’s recent moves have only heightened the tension. After signing the MoU with US Strategic Metals, Islamabad dispatched its first shipment of rare earth materials to the United States, marking a quiet but direct challenge to what Beijing has long regarded as its uncontested backyard. For China, any US foothold in Pakistan’s mineral corridors—especially those adjacent to the China-Pakistan Economic Corridor (CPEC)—is not just an economic intrusion but a geopolitical provocation. With over $62 billion invested in CPEC projects connecting Xinjiang to the Arabian Sea via Gwadar, China views the region’s mineral-rich belts as integral to its strategic ambitions.
The proposal to develop a US-funded seaport at Pasni has further rattled nerves in Beijing. The envisioned $1.2 billion investment, coupled with a rail link to Pakistan’s mineral heartland, could give the US direct access to the same logistical and security corridors that underpin China’s Belt and Road ambitions. While Islamabad insists the idea is only “exploratory,” even the suggestion has set off alarms. For China, Pasni threatens to fracture its maritime monopoly in Balochistan and erode its strategic depth on the Arabian coast. For the US, it represents an opportunity to establish a non-Chinese port for mineral logistics and regional presence—without the baggage of military basing.
Pakistan, for its part, is walking a tightrope. Desperate for foreign investment and eager to reduce its economic dependence on China, Islamabad sees in rare earth exports and the Pasni proposal a chance to diversify its partnerships. Yet, as Sheikh warns, this strategy risks inviting a new phase of great-power competition that Pakistan may be ill-equipped to manage or contain. The next phase of global rivalry, he suggests, will not only play out in the South China Sea or the Taiwan Strait, but also “in the mines of Balochistan, the refineries of Sindh, and the smelters of South Asia, where technology, access, and alignment will decide who controls the region’s most strategic resource: its minerals of the future.”
In this rapidly evolving landscape, one thing is certain: the world’s appetite for critical minerals is redrawing old alliances and creating new fault lines. For Pakistan, the challenge will be to navigate these treacherous waters without becoming collateral in a mineral Cold War that is only just beginning.