The federal grip on the KP Mining Bill

As a student, I was fascinated by Allan Quatermain, the adventurous hero of ‘King Solomon’s Mines’ (1885) by Sir H Rider Haggard, which brought the legendary Biblical mines to life. These mines, said to have brought great wealth to King Solomon (970–931 BC), remain undiscovered. Their supposed ownership caused conflict between the Israelites and the Edomites, who were believed to be the original owners.

In 54 BC, Julius Caesar attempted to invade Britain, partly because it was known as a source of tin. Though largely unsuccessful, his ambition was revived 89 years later by Emperor Claudius, who launched another invasion for Britain’s rich metal deposits – tin, lead and silver. The conquest was completed in AD 87 under Emperor Domitian, incorporating Britain into the Roman Empire.

The Romans nationalised mining, prohibiting private ownership. They had codified mining laws, including Lex Metallis Dicta and Lex Metalli Vespascensis, which governed resource extraction. Lead was considered a strategic resource. Only in AD 60 was limited private mining allowed in Roman Britain – a rare shift from state monopoly to partial privatisation of vital mineral resources.

The pages of history are filled with countless examples of conflicts and disagreements over mineral wealth. These could be ownership squabbles between provincial and central governments. Or they could be debates about the precedence of local populations' welfare over the state's commercial profits and revenue. These disagreements could also concern the extent of private and government control and the categorisation of mines and minerals into assets for the exclusive use of the state.

The conflict over laws, ownership and rights continues even today. So, what is it about the Khyber Pakhtunkhwa Mines and Minerals Bill 2025 that is cause for concern? As the saying goes, ‘the devil lies in the details’.

The foremost objection to the new bill is that it goes against the spirit and letter of the 18th Amendment. Critics argue that provincial turf would be encroached upon by the federal government. The main concern here is the inclusion of the ‘Federal Mineral Wing’ in a number of decision-making forums and sections of the law. Section 10(7), makes the “instructions” of the Federal Mining Wing mandatory. Section 19(2)(l) of the proposed bill makes the director general of the Federal Mineral Wing a permanent member of the Minerals Investment Facilitation Authority (MIFA), which is the apex provincial authority in the scheme of powers envisaged under the new bill. Section 19(3) allows for any co-opted member to be taken on board by MIFA – and this in my view would have been sufficient for taking any expert opinion by MIFA.

Section 20 of the bill makes it mandatory for the provinces to conform to a uniform framework and its subsections uses the word ‘shall’, thus making it mandatory in law to take directions from the Federal Mineral Wing. Section 65(c) restricts and binds the provincial authority by making it obligatory to execute agreements as per “suggestions” of the Federal Mining Wing. MIFA, which under Section 19 would be revamped under the new bill and include at least five provincial ministers would be practically taking directions from a grade-19 officer of the Federal Mining Wing. This federal interference and encroachment is schematic throughout the bill, the above examples illustrating the general pattern.

Section 46(2)(d)(i) & (ii) of the bill mandates a financial guarantee of Rs500 million for large-scale mining and Rs25 million for small-scale mining. Local investors argue this effectively excludes them from participating in mining within their own regions. Their concerns are reinforced by Section 46(4)(a) & (b), which imposes stringent experience requirements and restricts a company to only one licence at a time – potentially sidelining local businesses.

A key objection is that this bill was imposed on provincial governments without consultation. Critics say it is a one-size-fits-all draft being rushed through, as seen in Balochistan. The haste is reflected in legal flaws: Section 76(2) uses “remediated” instead of “remedied”; Section 64(3) vaguely states fines will be recovered as “debt due to government” without specifying a method; and Section 58(4)(a) oddly defines a controlling interest as less than 51 per cent.

Section 3 lacks proper legal reference to changes in the Rules of Business, and Section 2(h)’s definition of “department” is unclear – raising questions about whether a new or existing body will administer the law.

As per Schedule XI, the new bill’s non-applicability to the merged districts until 2030 and the vague definition of “local community” raise concerns. When read alongside provisions on “rare earth minerals”, “public organisations”, and “strategic minerals”, as well as the concessions granted under these sections, it fuels suspicions of resource exploitation without adequate local or provincial benefit.

This is not to suggest there’s no need for legal reform. The Khyber Pakhtunkhwa Mines and Minerals Act 2017 was a robust and well-researched law. I can attest to this, having been a member of the provincial assembly that passed it, and part of the party whose minister introduced it. In 2019, as provincial law minister, I oversaw substantial amendments to the Act, which strengthened it further and attracted no controversy.

Historically, the Minerals (Acquisition and Transfer) Order, 1961 gave the federal government ownership of all minerals. However, this became obsolete under the 1973 constitution and was formally overridden by the 18th Amendment. Today, Articles 172(2) and (3), along with the Fourth Schedule, vest mineral ownership with the provinces – except for Entry 18(a) of Part I, where minerals required for nuclear energy remain under federal control.

To be fair to the framers of this bill, some effort has been made to address key issues that any sound mining law should cover. Notable examples include Sections 9 and 10, which introduce a modern mining cadastre system, and Sections 48 and 73, which deal with surface rent and landowners' rights, including adopting procedures under the Land Acquisition Act, 1894. Other commendable parts of the bill include Part VIII, which outlines environmental and social safeguards, and enforces compliance through the Environmental Protection Agency under the EPA Act of 2014. A particularly notable feature is the procedure governing the closure of mines.

In my view, all references to federal authorities should be removed. Article 153 of the constitution already provides a mechanism for intergovernmental coordination through the Council of Common Interests. Second, there is no justification for imposing prohibitively expensive financial guarantees that effectively exclude local investors. Third, foreign investors are already protected under several instruments, including the Protection of Economic Reforms Act, 1992; the Foreign Investment (Protection and Promotion) Act, 2022; the National Mining Policy, 2013; and the 2017 Act. Lastly, the bill requires careful legal housekeeping, vetting, and clause-by-clause review to eliminate errors that could result in serious legal consequences.

Mineral resources are our nation’s wealth. A balance needs to be struck between increasing the state’s resources, adhering to the constitution, and ensuring the welfare of the local population. The vehicle of this national objective can only be a balanced statute that clearly and equally codifies all of the above aspects.

The Supreme Court of Pakistan, in its judgement in the Abdul Hakeem Khoso case (2014 PLD 350 SC), while acknowledging the ownership of natural resources by the state, stressed the use of the same for the welfare of the people. Let us together prove wrong J Paul Getty’s infamous quote when that American oil billionaire once said: “The meek shall inherit the Earth, but not its mineral rights”.

The writer is an advocate of the high court and former minister for law, parliamentary affairs and human rights for Khyber Pakhtunkhwa. He can be reached at: sultan.advocate@gmail.com