Pakistan’s plans to attract foreign investment into value-added mineral exports face uncertainty after the Punjab government cancelled a rock salt mining lease held by the Pakistan Mineral Development Corporation (PMDC) and auctioned the same 291-acre Warcha mining area to a private company, potentially jeopardising a proposed $200 million US investment.
PMDC had signed a memorandum of understanding with a US company for the proposed investment in downstream processing and export-oriented rock salt operations, according to a senior Petroleum Division official.
Later, Punjab’s Mines and Minerals Department cancelled PMDC’s 10-year lease renewal on March 2, 2026. The same mining area was subsequently auctioned to Sapphire Chemicals for Rs. 2.58 billion, payable over 10 years.
At the centre of the dispute is a January 2024 Special Investment Facilitation Council (SIFC) meeting, where PMDC says senior Punjab government officials had agreed to renew its leases in Kalabagh, Khewra and Warcha. The federal corporation maintains that the subsequent cancellation went against that commitment and could undermine investor confidence.
Work on the proposed investment had already begun, with a federal government delegation visiting China to explore processing plants. Progress has since stalled following the lease cancellation, according to the official.
The dispute has also created uncertainty around a separate 2024 partnership between PMDC and Sapphire for a 200,000-ton-per-year soda ash plant.
Under that arrangement, PMDC was expected to supply around 360,000 tonnes of rock salt annually, but Sapphire has now secured the mining area that PMDC had planned to use for the supply.
PMDC has challenged the Punjab government’s decision in the Lahore High Court, seeking suspension of the lease cancellation and protection of its rights. Separately, a civil court in Quaidabad ordered the parties to maintain the status quo over the disputed property following allegations of unlawful interference, although the order would lapse unless extended.
The dispute comes despite the federal government’s broader push to move Pakistan’s mineral sector away from exports of raw materials toward processed, higher-value products, with the proposed $200 million investment intended to support downstream rock salt processing and exports.
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