Alert Sign Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to turn off Adblock on

Alert Sign Dear reader, please upgrade to the latest version of IE to have a better reading experience


KP’s new mine laws for investment

November 21, 2016


A mineral specimen from the mines in the Khyber Pakhtunkhwa region.
A mineral specimen from the mines in the Khyber Pakhtunkhwa region.

SINCE August the Khyber Pakhtunkhwa government has received 460 applications so far from prospective investors for new licences for mineral exploitation.

The move follows a fresh ordinance on KP Mines and Mineral Development and Regulation, and the lift on the ban for new licences.

The new law has repealed the mines- and mineral-related portion of the ‘Regulation of Mines and Oil field and Mineral Development (government control) Act 1948’. It has done away with the discretionary powers of officials at the district level licensing and created an authority to facilitate investment in the sector. The leasing power would be exercised by a committee headed by the relevant secretary.

KP is the first province to enact its own law since the subject had been devolved to the provinces. By encouraging new investment, the province’s income from the sector will go up

KP is the first province to enact its own law since the subject had been devolved to the provinces under the 18th amendment. By encouraging new investment, the province’s income from the sector would go up to an estimated Rs2bn from the current Rs700m.

In July 2013, the PTI-led coalition government banned the issuance of new licences for mineral exploration. Mine operators were facing serious problems due to an inadequate legal cover following the devolution of the subject to the provinces.

KP Minister for Minerals and Labour Anisa Zeb Tahirkheli says, “We have received 376 applications from individuals and 84 from companies so far.” The mineral department is expecting more applications before the end of the deadline of Nov 30. “We will start issuing licences from January 2017”, Ms Tahirkheli said.

The provincial committee, headed by the relevant secretary, will be tasked with granting licences and mining leases and their cancellations; lay-down process and procedure for the award of licences and mining leases, supervise and regulate mining operations in the province through specific or general written instruments, overseeing law enforcement of rules and regulations related to mines and minerals in the provinces.

There are two types of licences: a reconnaissance licence for a period of one year over an area of up to 1,000km2, and exploration licenses for a period of five years over an area of up to 500 km2. Under the law, a lease holder cannot get a licence for more than three sites at a time.

The policy also proposes introduction of new mining technology. This is to discourage the use of outdated technology which results in wastage of expensive minerals.

The minister said the department will offer heavy and modern machinery on rent from the existing pool to reduce wastage of precious minerals. “We will also add more machinery in our existing pool to help replace use of explosives and blasts”, she said.

In the next five years, the use of dynamite and blast in minerals will be banned.

KP has a huge reserve of industrial minerals and dimension stones, including marble, granite, and dolomite, as well as coal (ranging from lignite to bituminous) and limestone. Over 130 minerals have so far been identified. There are over 400 current mining and 800 prospective leaseholders while the industry employees about 32,500 workers, according to an official report.

Almost all varieties of minerals — particularly exploration of dimension stones, gemstones and metallic mineral resources — provide avenues for investment in large and small-scale mining operations.

“We are expecting proposals from three to four cement factories for limestone exploration,” an official of the department said. Six or seven blocks of limestone have already been identified.

As many as 22m tonnes of fertiliser-grade phosphate have been identified in Hazara and about 85m tonnes of glass and ceramic-grade nephline syenite and associated granitoids in Buner.

The KP mineral department will introduce a scientific monitoring system to replace the ongoing checking of trucks on roads. The search and checking of trucks would be conducted on mining sites instead of roads for which mobile squads would be formed.

A ‘Gems and Geological and Mineral Institution’ will be established to highlight 71 kinds of minerals to attract investors. Negotiations are being held with different institutions to promote and improve various mines and minerals and train officials.

Moreover, a project at a cost of Rs150m will be initiated to discover precious mines from Chitral to Hazara. The KP Mineral and Mines Investment Facilitation Authority will be established and headed by the relevant minister with 13 members.

The core function of the authority will be to provide guidance to the mineral department, frame policies for investment and development of the mineral sector, facilitate said investment, hear appeals against decisions of the licensing authority, and prescribe safety standards and welfare of workers, research and other relevant activities.

Published in Dawn, Business & Finance weekly, November 21st, 2016