Pakistan’s efforts to attract foreign investment in value-added mineral exports have faced uncertainty after a dispute over a rock salt mining lease in Punjab affected a proposed $200 million U.S. investment project.
The dispute involves the 291-acre Warcha rock salt mining area, where the Punjab government cancelled a lease held by the federal Pakistan Mineral Development Corporation (PMDC) and later auctioned the site to Sapphire Chemicals for Rs2.58 billion, payable over 10 years.
According to a senior Petroleum Division official, PMDC had signed a memorandum of understanding with a U.S. company for investment in downstream rock salt processing and export-oriented operations. The project was aimed at shifting Pakistan’s mineral exports from raw materials toward higher-value processed products.
Officials said Punjab’s Mines and Minerals Department cancelled PMDC’s 10-year lease renewal on March 2, 2026, despite the company’s previous permit being valid until 2032.
PMDC maintains that the decision contradicted discussions held during a January 2024 Special Investment Facilitation Council (SIFC) meeting, where it claims Punjab officials had agreed to renew leases for Kalabagh, Khewra, and Warcha mines.
The federal mining company has challenged the lease cancellation in the Lahore High Court, seeking protection of its rights. The dispute has also created uncertainty around a separate PMDC-Sapphire partnership for a 200,000-tonne-per-year soda ash plant, which depends on rock salt supplies from the disputed mining area.
The development comes as Pakistan seeks to attract strategic foreign investment in its minerals sector through processing, manufacturing, and export-focused projects.
