MoU with US over mineral exports raises alarm among Pakistan’s jewellery exporters

ISLAMABAD: Pakistan and the United States signed a memorandum of understanding (MoU) on Monday to facilitate the export of critical minerals, including antimony, copper, gold, tungsten, and rare earth elements. The deal, signed between U.S. Strategic Metals (USSM) and Pakistan’s Frontier Works Organization (FWO), has raised concerns among Pakistan’s jewellery exporters.

While the MoU is being seen as a milestone for economic cooperation, jewellery industry stakeholders fear that focusing on raw mineral exports will deprive Pakistan of the opportunity to add value to these resources domestically. The jewellery exporters’ association expressed concerns that the government’s focus on raw minerals and large-scale mining deals with foreign companies is detracting from the potential of the downstream jewellery sector, which could generate more foreign exchange and employment.

The MoU involves the production and recycling of critical minerals, which are deemed essential for advanced manufacturing and energy production by the U.S. Department of Energy. However, jewellery exporters are worried that the government’s growing focus on raw material extraction will undermine the jewellery manufacturing sector.

The jewellery sector has already been struggling with gold exports, which have been blocked for over four months due to the suspension of SRO 760. Exporters claim this has resulted in significant financial losses, with 52 kilograms of advance gold stuck in Pakistan. They are concerned that this shift towards raw minerals could harm the value-added jewellery sector in the long term.

The government’s focus on mineral exports came into sharper focus with the recent $500 million deal between FWO and USSM to establish a poly-metallic refinery in Pakistan. While mining and mineral refining investments are important, exporters argue that the government needs to balance these interests with the needs of the value-added sectors.

Industry insiders warn that unless the government addresses the concerns of the jewellery sector—such as lifting the suspension of SRO 760—the country risks losing its competitive edge in the global jewellery market.