Limestone calcined clay cement (LC3) is an emerging ternary binder, while typically only kaolinitic clays have been used or investigated for its production. There is a dire need to scientifically investigate the potential utilization of low-grade kaolinitic and mixed clays. In this study, nineteen different natural clays were examined from various locations in Pakistan, with a focus on clay quarries near cement plants. From the dataset, seven significant criteria were identified: mineral type, and the contents of kaolinite, SiO2, Al2O3, Fe2O3, CaO, and the Al2O3/SiO2 mass ratio. Nineteen clays were characterized using X-ray diffraction, X-ray fluorescence, and thermogravimetric analysis. These clays were then prioritized against the identified criteria using multi-criteria decision-making analysis. After characterizing them, the top ten clays were calcined to evaluate the performance of LC3. A correlation analysis was conducted between the characterization of calcined clays and the compressive strength of LC3. It was revealed that all criteria were positively correlated with compressive strength, except for Fe2O3 and CaO, which showed a negative correlation. The correlation coefficients for Fe2O3 and CaO were − 0.44 and − 0.47, respectively. According to the OPC Type I, incorporating low-grade kaolinite with a composition of 40–55% leads to greater compressive strength gain compared to the standard 42.5 MPa compressive strength of OPC Type I. Even clays with lower grades, ranging from 38 to 41 MPa, can achieve up to 96.5% of the compressive strength of OPC Type I. Therefore, low-grade clays could be incorporated into a ternary binder system to produce carbon-neutral cement.