As opposed to uranium enrichment, the plutonium programme is indigenously and locally developed and culminated under watchful eyes of PAEC Chairman Munir Ahmad Khan. In the end of 1970s, Pakistan Atomic Energy Commission began to pursue Plutonium production capabilities. Consequently Pakistan built the 40-50 MW (megawatt, thermal) Khushab Research Reactor at Joharabad, and in April 1998, Pakistan announced that the nuclear reactor was operational. The Khushab reactor project was initiated in 1986 by PAEC Chairman Munir Ahmad Khan, who informed the world that the reactor was totally indigenous, i.e. that it was designed and built by Pakistani scientists and engineers. Various Pakistani industries contributed in 82% of the reactor's construction. The Project-Director for this project was Sultan Bashiruddin Mahmood. According to public statements made by the U.S. Government officials, this heavy-water reactor can produce up to 8 to 10 kg of plutonium per year with increase in the production by the development of newer facilities,[55] sufficient for at least one nuclear weapon.[56] The reactor could also produce tritium if it were loaded with lithium-6, although this is unnecessary for the purposes of nuclear weapons, because modern nuclear weapon designs use 6Li directly. According to J. Cirincione of Carnegie Endowment for International Peace, Khushab's Plutonium production capacity has allowed Pakistan to develop lighter nuclear warheads that would be easier to deliver to any place in the range of the ballistic missiles.[citation needed]
The Plutonium separation takes place at the New Laboratories, a reprocessing plant, which was completed by 1981 by PAEC and is next to the Pakistan Institute of Nuclear Science and Technology (PINSTECH) near Islamabad, which is not subject to IAEA inspections and safeguards.
In late 2006, the Institute for Science and International Security released intelligence reports and imagery showing the construction of a new plutonium reactor at the Khushab nuclear site. The reactor is deemed to be large enough to produce enough plutonium to facilitate the creation of as many as "40 to 50 nuclear weapons a year."[57][58][59] The New York Times carried the story with the insight that this would be Pakistan's third plutonium reactor,[60] signaling a shift to dual-stream development, with Plutonium-based devices supplementing the nation's existing HEU stream to atomic warheads.