PESHAWAR: A Chinese company’s allegation of political influence and irregularities in mining contracts in Khyber Pakhtunkhwa has prompted Special Investment Facilitation Council (SIFC) to ask the Auditor General of Pakistan to take conduct a special audit and accountability review.
The company has raised the matter with the federal authorities.
The company alleges that after investing over $5 million in foreign capital and completing excavation, its contract was cancelled and that it was allegedly awarded on political grounds to a favoured company.
After facing years of delays and legal hurdles, the ready-to-operate lease has now been granted to another firm. The Chinese company has raised serious concerns about governance, transparency, and the rule of law in the province.
On March 5, 2026, the provincial government ordered the transfer of the lease to another firm in light of the Mineral Title Committee’s decision, even though Tuny Pak had already invested millions of rupees in the project. According to a SIFC letter dated February 17, 2026, Tuny Pak had applied for a mining lease with the Khyber Pakhtunkhwa Minerals Department in 2013 and was granted permission to mine in Chitral. During operations, the company extracted and exported certain minerals. However, it was fined $200,000 for lacking an export license at the time of sale. Despite paying the fine, its previously issued exploration license was also cancelled — a move the company attributes to political influence and procedural irregularities. The matter has remained entangled in legal and administrative complications for nearly a decade. In 2024, the Peshawar High Court directed the relevant authorities to resolve the case within two months in accordance with the law. However, the contract was subsequently awarded to another company.
According to the SIFC, this extraordinary delay damaged Pakistan’s global standing, discouraged potential foreign investment, deprived local communities — particularly youth — of employment opportunities, reduced potential foreign exchange inflows, and caused substantial financial losses to the national exchequer.
The letter said that over the past one and a half years, multiple meetings were held at the SIFC, but the matter remained unresolved. The last follow-up session, chaired by Dr Jahanzeb Khan, Secretary of the Apex Committee, endorsed referring the case for an independent audit review.
The Auditor General has been requested to constitute a competent team to determine responsibility and assess the economic impact of the delay in issuing the mining lease. The review will examine financial losses to the national exchequer, reduced government revenue, lost employment opportunities, and potential foreign exchange losses. The audit is also expected to identify systemic weaknesses and recommend corrective measures to prevent similar issues in the future.
Director General of the Khyber Pakhtunkhwa Mines and Minerals Department told The News that Tuny Pak’s license had been suspended or cancelled in 2013 and could not be renewed. The company challenged the decision before courts and appellate forums, where the case remained pending for several years.
He maintained that the departmental committee had decided the matter strictly in accordance with the law. He said he was not aware of any SIFC letter, adding the department had not been formally contacted. If any clarification or response is sought, the department will submit its report accordingly.
