ISLAMABAD: Pakistan’s push to attract foreign investment in value-added mineral exports faces uncertainty after Punjab cancelled the Pakistan Mineral Development Corporation’s (PMDC) Warcha rock salt lease and auctioned the same 291-acre mining area to a private company, putting a proposed $200 million US investment at risk.
The dispute threatens the project and could weaken investor confidence despite the Special Investment Facilitation Council’s (SIFC) efforts to attract strategic foreign investment, a senior official familiar with the matter said.
PMDC is a federal government-owned mining company under Petroleum Division. Punjab’s Mines and Minerals Department cancelled its 10-year lease renewal on March 2, 2026, despite the permit remaining valid until March 2032. The department later auctioned the same tract to a private company for Rs2.58 billion, with payment spread over 10 years (Rs15 million a month), triggering a dispute over alleged broken commitments and investor confidence, a senior official said.
PMDC’s main grievance centres on a January 2024 meeting of the Special Investment Facilitation Council (SIFC), where senior Punjab officials reportedly agreed to renew its leases in Kalabagh, Khewra and Warcha.
PMDC argues that SIFC decisions are binding under the 2001 Board of Investment Ordinance and accuses Punjab of going back on that commitment.
Officials said the lease cancellation could disrupt PMDC’s plans for downstream processing and export-oriented industries.
The corporation had signed an MoU with a US company for a proposed $200 million investment, but the dispute risks delaying the project and weakening investor confidence despite SIFC’s efforts to attract strategic foreign investment.
The implementation process had already begun, with a federal government delegation even visiting China to explore processing plants.
However, progress has stalled following the provincial government’s decision, official said.
When contacted by ‘The News’, Punjab Mines and Minerals Secretary Pervaiz Iqbal Butt declined to comment over the phone and asked the correspondent to come to Lahore instead. Despite being requested to provide even a brief response, he said it was not possible.
The lease, renewed in January 2024, had already been reduced from 381 acres to 291 acres.
PMDC says the department cancelled the renewal without resolving a penalty dispute or addressing its objections before issuing an April 6, 2026 auction notice that ultimately awarded the land to a company.
The dispute has also complicated a 2024 partnership between PMDC and the company for a 200,000-tonne-a-year soda ash plant, under which PMDC was to supply 360,000 tonnes of rock salt annually.
The project now faces uncertainty after the company secured the mining area PMDC had planned to use for supply.
PMDC has challenged the decision in the Lahore High Court, seeking suspension of the cancellation of the lease and protection of its rights.
Separately, a civil court in Quaidabad has ordered PMDC and the opposing party to maintain the status quo over the disputed property after allegations of unlawful interference, though the order will lapse if not extended.
