Pakistan plans to offer mining concessions to US companies: Jam Kamal
by By ReutersISLAMABAD: In an effort to capitalise on the Trump administration's desire to increase trade with South Asia, Pakistan plans to make concessions to US corporations so that they invest in its mining industry as part of tariff negotiations with Washington, Federal Minister for Commerce Jam Kamal told Reuters.
Because of a $3 billion trade surplus with the largest economy in the world, Pakistan may be subject to a 29% tariff on exports to the US, under the tariffs that Washington proposed in April on nations worldwide. After that, tariffs were suspended for 90 days to allow room for talks.
Commerce minister 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.
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.