The tension in the relations of the two countries has increased after the US President Donald Trump imposed 25% additional tariffs due to the purchase of Russian oil on India. Meanwhile, the US has taken a new step and signed a mineral investment agreement with Pakistan.

The agreement has been reached between the US US Strategic Metals Company and Pakistan’s Frontier Works Organization. Under this, $ 500 million will be invested and a poly-mental refinery will be set up in Pakistan. The agreement is considered to be an extension of the recent trading agreement between the US and Pakistan.

Why is this agreement important for Pakistan?
Prime Minister Shahbaz Sharif has been claiming for a long time that Pakistan has trillion dollars mineral reserves. They believe that if foreign investment comes in this field, Pakistan can overcome its Kangali and foreign debt. This deal will help Pakistan to export minerals like copper, gold, tungsten and rare soils. The government says that this partnership will start a large scale mining and mineral processing projects.

Balochistan biggest challenge
However, there are many dangers associated with this investment. Most of Pakistan’s mineral wealth is in Balochistan province. This area has long been affected by separatism and extremism. Baloch rebels have already targeted foreign companies. Projects of Chinese companies have already been attacked. Recently, the US declared the Balochistan National Army and its branch Majeed Brigade as a terrorist organization. In these circumstances, American investment may also face the challenge of the rebels.

The danger of rift in relations with China
China is the second major concern of Shahbaz Sharif. As Pakistan’s biggest investor and lender, China has a profound impact in the country’s economy. America and China are already entangled in the fight for trade war and global dominance. If Pakistan gives priority to American investment then China can be angry. China has a heavy debt burden on Pakistan. If the relationship deteriorates, its effect can be serious on the financial front. After this deal, the pressure on Pakistan will increase how it should maintain balance between the two superpowers.

Portuguese company also agreement
Along with American investment, Pakistan has also tied up with Portugal’s fat-organs. Under this deal, Pakistan’s National Logistics Corporation and Mota Angil Group will jointly work on minerals and infrastructure projects. It is clear that Pakistan is trying to attract multilateral investment in the mining sector and this is giving tension to Sharif.

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