Published: 10:25 AM, 01 April 2026
Lessons to learn from Africa and Indonesia about mining sectors
Pakistan is at a pivotal juncture with significant mineral discoveries at Reko Diq and other locations, including copper, gold, and critical minerals, reports Dawn. These findings have rekindled optimism about alleviating the country's external economic challenges. However, possessing mineral wealth alone does not guarantee progress. The experiences of African nations highlight pitfalls to avoid, while Indonesia's strategic actions offer valuable lessons. Pakistan faces a fundamental decision: whether to simply export raw materials or to pursue a comprehensive strategy that maximizes value and drives industrial transformation.
The experiences of countries such as Zambia and the Democratic Republic of the Congo reveal three recurring issues that have hindered progress. Firstly, the development of enclave economies. Mining operations functioned as isolated, capital-intensive ventures with minimal integration into the domestic economy.
Equipment and expertise were sourced from abroad, and the extracted ores
were exported. As a result, industrial ecosystems failed to develop locally. Secondly, exporting unprocessed raw materials led to limited value capture. Minerals like copper and cobalt were shipped overseas for refinement and returned to global markets as higher-value products.
Consequently, the associated jobs, technology, and profit margins benefited other nations.
Thirdly, weak governance undermined the potential gains. Non-transparent contracts, rent-seeking, and exclusion of local stakeholders fostered mistrust and, at times, instability. While investors are drawn to mineral resources, their decisions are ultimately influenced by the predictability and stability of the operating environment.
For Pakistan, the clear lesson is that mining cannot remain an isolated, extractive activity. Instead, it must serve as a catalyst for broader industrial development, encompassing engineering, service sectors, chemicals, fabrication, and skill enhancement.
Indonesia, on the other hand, charted a different course. In 2014, the government enacted a ban on the export of unprocessed mineral ores, with a particular focus on nickel. This policy compelled investors to establish domestic smelting facilities; the policy was further strengthened in 2020.
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