Mining Comparative Guide

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1 Legal and regulatory framework

1.1 Which legislative and regulatory provisions govern mining in your jurisdiction?

After the passage of the 18th Constitutional Amendment mining has now become a provincial jurisdiction. Each province in Pakistan has their own mining law. The mining laws for each province are as follows:

• For the province of Balochistan the mining legislation is the Mines and Minerals Act 2025.
• For the province of Punjab the mining legislation is the Punjab Mines and Minerals Act 2025
• For the province of Sind the mining legislation is the Sind Mines and Minerals Governance Act 2021 and the Sind Mining Concession Rules 2002
• For the province of Khyber Pakhtunkhwa, the mining law is the Khyber Pakhtunkhwa Mines and Minerals (Amendment) Act 2025
• For the area under Gilgit Baltistan the mining law is the Gilgit Baltistan Mining Concession Rules 2016 and amended in 2024
• For the area under Kashmir the mining law is the Azad Jammu and Kashmir Mines Act 1977.

With the location of the Tethyan Belt and the mining project of Reko Diq located in Balochistan we have relied on the Mines and Minerals Act 20025 of Balochistan in reply to most of the questions within this guide. It also helps that generally the legislation for issue Mineral Titles is wholly similar with the legislation in the other provinces too.

1.2 When was the mining legislation last reviewed?

With the focus of the Government of Pakistan towards the mining industry, most of the provinces have either enacted new investor friendly laws or amended existing laws. The resource rich provinces of Balochistan and Khyber Pakhtunkhwa have both enacted new investor friendly mining laws in 2025.

1.3 What other legislative and regulatory provisions have relevance for mining operations in your jurisdiction?

Following the settlement of the long ongoing dispute between Government of Pakistan and Barrick Gold Corporation, the Government of Pakistan passed the Foreign Investment (Promotion and Protection) Act 2022 which primarily protects the investment of Barrick from any future privatization or government take over and also provides relief to the project in terms of taxes. This protection is not only for the Barrick Gold Reko Diq Project, it is in fact protection for any sizable mining investment in Pakistan. This law is a landmark law in ensuring investor confidence in the mining sector.

1.4 Are there any regional treaties or laws that need to be taken into account?

No specific treaties for mining.

1.5 Which bodies are responsible for enforcing the applicable mining laws and regulations? What powers do they have?

Each province in Pakistan has a separate department for mines and minerals. The departments have complete powers in terms of award and cancellation of mineral titles.

1.6 What is the regulators' general approach in regulating the mining sector?

Following the settlement between the Government of Pakistan and Barrick Gold the approach of the regulators has become extremely investor friendly.

2 Mining industry

2.1 How mature is the mining industry in your jurisdiction?

The mining industry has huge potential in Pakistan. With the production for the Reko Diq project set to commence from 2028, this potential is now being fully realized. With world class projects like Reko Diq, the mining industry is bound to improve rapidly.

2.2 What are the key minerals which are mined in your jurisdiction and where is mining activity typically based?

Provinces like Balochistan and Khyber Pakhtunkhwa are known for large scale mining for minerals like Copper, Gold and Rare Earth Metals. Minerals such as gem stones and granite are also mining in the areas of Khyber Pakhtunkhawa and Gilgit Baltistan. Coal is another key mineral mined in Balochistan Sind. Salt has been mined since long in Punjab.

2.3 Are any minerals deemed strategic and, if so, what impact does this have?

Rare Earth Minerals and Uranium are deemed strategic. Reserved for Government bodies such as the Atomic Energy of Pakistan.

2.4 Who are the key players in the mining industry in your jurisdiction?

A number of local as well as international mining companies are currently working in Pakistan. Worth mentioning are Barrick Gold Corporation, Metallurgical Corporation China (MCC), Mari Energies, Engro.

2.5 In addition to exploration rights and mining rights, what other mining rights and titles exist (eg, artisanal or small-scale mining rights)?

Prospecting license, small scale mining lease, gemstone mining permit.

3 Exploration rights

3.1 What licences are required to undertake prospecting and exploration activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

Prospecting and exploration licenses are issued for such activities. These are usually issued for large scale mining.

3.2 What requirements must be satisfied to obtain a licence?

Most of the mines and mineral departments require proof of technical know-how, financial viability, prior experience before awarding a license.

3.3 What is the procedure for obtaining a licence? How long does this typically take?

The procedure for obtaining a license is provided within the various mining laws of the provinces. The license is applied to the Department of Mines and Minerals after fulfilling requirements provided within the law including technical know how. There is no fixed time provided on how long the department takes in issuing a license, with their investor friendly policies the departments do not take long in issuing licenses.

3.4 Who can own exploration rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

The provincial mining laws all provide that an applicant must have a national tax number. Only a locally incorporated company, a branch office or a natural person can have a national tax number. This means that a foreign company cannot directly hold an exploration license but a locally incorporated subsidiary of a foreign company holding a national tax number can hold such a license.

3.5 What fees and other charges are incurred in obtaining a licence?

The various provincial mining laws have their own fees regime. With most of the laws having been recently enacted the provision for payment of fees for each type of license has been mentioned within the law as that which shall be determined by the Mines and Minerals Department under such law.

3.6 What is the duration of a licence? What is the process for renewal?

In Balochistan a Reconaisance lisence is issued for 01 year, an Exploration lisence is issued for 04 years and a Mining Lease for large scale mining for 30 years. The process for renewal involves applying to the Mines and Minerals Department and for providing evidence of work done and for reasons for renewal.

3.7 What are the operator's rights and obligations under the licence?

A Title holder is to comply with all the terms and conditions of the lisence/lease. Conserve the environment and wildlife. Properly close a mine head. Remove all plant and structures which are not being used in order to protect the environment. Use water in accordance with law. Notify the Mines Department of the discovery of any rare earth mineral, strategic mineral, nuclear or oil discovery. Employ local population.

3.8 Are there any requirements re relinquishment of an exploration licence or part of the area covered by an exploration licence?

50% of the area of the Exploration License has to be relinquished at the time of renewal.

3.9 Can licences be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Other than a Reconnaissance License and a Temporary Permit an applicant can apply for the transfer of a license. Transfer can be made to a Firm or Company and all the conditions that had bene imposed upon the original Title Holder in respect of the law shall be applicable to the proposed Transferee.

3.10 Does an exploration licence give any priority when applying for a mining right?

Yes the Exploration License holder is given priority when applying for a mining right.

4 Mining rights

4.1 How is ownership of mining rights determined in your jurisdiction?

A Exploration License Holder is given priority when applying for a Mining Lease in respect of the same area.

4.2 What are the key requirements in order to apply for a mining right?

The Title Holder shall commence mining operations with 06 months of the grant of the mining lease. Fulfill all the conditions of the Exploration License.

4.3 What fees and other charges are incurred in obtaining a mining right?

There are no other charges other than the official fees to be paid to the Licensing Authority.

4.4 What is the duration of a mining right? What is the process for renewal?

The duration of Mining Lease is 30 years.

4.5 Who can own mining rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?

A locally incorporated Company or Firm can hold a Mining Lease. A foreign operator can hold a Mining Lease through a locally incorporated company.

4.6 Do any indigenous ownership requirements apply in your jurisdiction?

They do not.

4.7 What role does the state play in the mining industry in your jurisdiction?

The role of the state is limited to licensing and security unless a company enters into a JV with the state as is case with the Reko Diq Project.

4.8 Are there requirements for the government to enter into a mining development (or similar) agreement in addition to the licences/permits? When is this required or available?

There are no such requirements.

4.9 Can mining rights be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?

Mining rights can be transferred to another company and/or firm. All terms and conditions of the Mineral Title and other provisions of the law applicable to the title holder shall also be applicable on the transferee.

4.10 Can security be taken over mining rights?

Not as a condition with in the law. However financial guarantees including bank guarantees can be required by the licensing authority of applicants when specific performance is required.

4.11 What provisions apply with regard to closure or abandonment of a mining right?

It is a condition of the awarded mining lease that the lease holder shall secure the mine head upon completion of the work and return and rehabilitate the area and environment in and around the lease area.

5 Surface rights

5.1 Does the law of your jurisdiction distinguish between mining rights and surface rights? If so, how does an owner of mining rights acquire surface rights?

Yes ming rights and surface rights are bot distinguishable from each other. Surface rights are either acquired through the board of revenue of the province within which the surface rights are located or in the case of privately held surface rights, rent is paid to the owner of the surface rights.

5.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?

The operator is to pay rent to the private surface rights owner and in return the land owner shall allow use of the surface rights.

5.3 Please give an overview of the process for any mandatory acquisition of surface rights (eg, process and time to enforce).

No process for mandatory acquisition of surface rights are provided within the mining law.

5.4 Are any native title issues applicable, either at the exploration licence stage or when a mining right is issued?

No such title issues are applicable.

5.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?

No other rights required.

6 Environmental issues

6.1 What environmental authorisations are required to undertake prospecting, exploration and mining activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?

A Title holder shall submit a report in respect of the Mineral Title to the Environmental Protection Agency and shall obtain permission from the same.

6.2 What environmental obligations must the operator observe while the mine is operational?

Ensure that they take care of the environmental forestry and report any environmental accidents to the Director General of the Environment Protection Agency.

6.3 What environmental obligations must the operator observe in relation to closure of the mine?

It shall be a condition of the Mining Lease that the operator shall effectively close the mine in a manner where the area is returned to its original position both operationally and particularly environment wise.

6.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

Breach shall be an offence under the law.

6.5 Which bodies are responsible for enforcement of environmental obligations?

The Environment Protection Agency both at the provincial and federal level. The Licensing Authority to the extent of the fulfillment of the terms and conditions of the mineral title dictated by the Authority.

6.6 What is the regulators' general approach in regulating the mining sector from an environmental perspective?

The regulator has laid stress upon the protection of the environment. Submission of an Environmental Impact Assessment is part of an application for Mineral Titles.

7 Health and safety

7.1 What key health and safety requirements apply to operators in your jurisdiction?

The law which deals with health and safety for the mining industry is the Mines Act 1923 and is very archaic and outdated.

7.2 What reporting requirements apply with regard to mining accidents in your jurisdiction?

No reporting requirements presently exist.

7.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

No requirements presently exist.

7.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?

With evolving mining legislation, operators should adopt international standards on health and safety.

7.5 Which bodies are responsible for enforcement of health and safety obligations?

Labour inspectors under various labour legislation and inspectors under the Mines Act 1923.

7.6 What is the regulators' general approach in regulating the mining sector from a health and safety perspective?

Not enough importance has been given by the regulator to this area. The Licensing Authority does require a safety plan be submitted when applying for an exploration license and/or mining lease but no specific enforcements are provided.

8 Processing, refining and export

8.1 What requirements and restrictions apply with regard to the processing or refining (beneficiation) or minerals?

The Ministry of Commerce's Export Policy Order 2020 as well as Customs Rules will apply for export.

8.2 What requirements and restrictions apply to the export of minerals?

The same would be governed by the Ministry of Commerce's Export Policy Order 2020 and the Customs Rules.

9 Taxes and royalties

9.1 What taxes, royalties and similar charges are levied on mining operators in your jurisdiction? How are these calculated?

No separate taxes are charged on mining operations. Royalties are yet to be determined under the newly formed laws. The Foreign Investment (Promotion and Protection) Act 2022 provides exemptions for large scale mining projects from taxes.

9.2 Are any tax incentives available for mining operators?

The Foreign Investment (Promotion and Protection) Act 2022 provides exemptions for large scale mining projects from taxes.

9.3 What other strategies might mining operators consider to mitigate their tax liabilities?

Consider having the areas of their mining operations designated as an export processing zone.

9.4 Have there been any significant changes to the taxation rates applicable to mining companies in the last three years?

No such changes have been made.

10 Disputes

10.1 In which forums are mining disputes typically heard in your jurisdiction?

No sperate forums are provided. The disputes would fall under the civil procedure code of Pakistan and be taken up by civil courts or a petitioner would move the high court challenging specific orders of the licensing authority.

10.2 What issues do such disputes typically involve? How are they typically resolved?

Payments of royalty and grant of Mineral Titles.

10.3 Have there been any recent cases of note?

The dispute which put the Pakistan mining industry on the map involved the dispute between Barrick Gold Corporation and Antofagasta Mineral's subsidiary Tethyan Copper Company. The subsidiary was named after the Tethyan Belt on which the company's project Reko Diq was situated. The matter took 11 years to resolve and moved from the Supreme Court of Pakistan to the international arbitration forum of ICSID. After the companies won in 2021, Government of Pakistan and Balochistan negotiated as settlement by allowing Barrick Gold to once again start working on the Reko Diq project.

11 Trends and predictions

11.1 What changes have there been to the mining landscape in your jurisdiction in the last five years?

The Reko Diq dispute sent a very negative message to foreign investors. The role of the Supreme Court of Pakistan in particular had acted in discouraging foreign investment in the mining sector. The resolution of the dispute and the successive disarming of the legislature of the Supreme Court and High Courts has resulted in the eradication of the wayward and uncontrollable constitutional jurisdiction which had led to disputes such as the Reko Diq dispute.

The subsequent enactment of investor friendly mining laws and in particular the enactment of the Foreign Investment (Promotion and Protection) Act 2022 had worked towards normalizing investor confidence in the mining sector.

Pakistan has successfully held various mining conferences and international mining companies have started showing a significant interest in the mining sector in particular in Balochistan.

Legislation has now ensured that superior courts in Pakistan will not be able to take up investment related disputes.

11.2 How would you describe the current mining landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The prevailing trends are extremely encouraging. Reko Diq is said to start production by 2028.

12 Tips and traps

12.1 What are your top tips for mining operators in your jurisdiction and what potential sticking points would you highlight?

Be honest in your submissions to the government. Partnership with the government ensures the interest of the government in mining ventures which in turn guarantees security for investors. Engage with the government.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.