Legislation can help attract foreign investment in mining sectorBreaking

April 29, 2024

Pakistan needs relevant legislation to regulate mining, which will help build the confidence of both domestic and foreign investors and fetch the much-needed foreign exchange to the state coffers, Muhammad Yaqub Shah, principal geologist at the Islamabad-based Global Mining Company Private Limited, told WealthPK. "To make the mineral sector an active participant in the national economic cycle, law implementation, rights, protection acts, and necessary security assurance, especially for foreign investors, are the necessary elements," he opined. He said, "In 1948, after a little amendment, the regulations developed by the British government before the partition were considered a standard to be followed. However, the promulgation of laws by the National Assembly has never happened to date. This is creating a lot of hindrances due to which the investors, especially the foreign companies, hesitate to partner in Pakistan's mining sector. In the past, a few in-kind issues were raised by some reputed international mining companies." "After law-making, policy framing will no longer be a problem.

Policies are helpful only when they are continuously followed by the coming governments. However, the varying agendas of changing governments never let any serious deal or framework in order. So, to make the mineral sector of Pakistan a source of economic strength, law-making and its enforcement is the need of time," he added. Talking to WealthPK, Assistant Manager (Legal) at the Pakistan Mineral Development Corporation (PMDC) Muhammad Tayyab said, "A proper code of conduct is necessary to address a course of action for all activities related to the mining and mineral sector. Proper legislation to define the laws addressing this sector is direly needed. Certain regulations exist to keep all the relevant activities in order at all levels. However, proper legislation will unify all the practices according to the Constitution of Pakistan." Continuing, he said that after the 18th Amendment, a lot of unseen hurdles made their way. For example, if the federal government decides on any agreement related to the mining product in the domain of any province, under the Devolution Act, the provincial govt can change the entire course of action.

Although the federal government never performs any activity without consulting a provincial government, the political interests may clash at any time. Sharing the importance of a proper legislation, Engineer Muhammad Yousaf, miner and General Secretary of the Institute of Mining Engineers, Pakistan, said, "In the absence of proper legislation, nothing is sufficient to gain the investor's confidence at all levels. Law implementation after proper legislation makes any business sector reliable, while policy initiation only addresses the guidelines or details of the procedure according to which investment/sustainable development/work can be done." He said Pakistan's national mineral policy (not law) was initiated in 1995 and further revised in 2013. It clearly says that oil, gas, and all radioactive minerals explored across Pakistan will be the federal government's property, while the provincial government reserves the right to other minerals explored in its territory.

This regulation is mandatory to be followed across Pakistan. The provincial government can slightly amend it if required. "To gain the confidence of investors at all levels, legislation is the only key to success. Only then can the portal of international investments be opened for Pakistan's mining and minerals sector," he added. Talking to WealthPK, miner and gemmologist Imran Babar said, "After proper legislation concerning mining and minerals law, the international community will be attracted to Pakistan. In the current situation, whenever we contact any mining company or investor, the first demand is always about the law, so that they may know about the conditions necessary to follow and the protection rights. To stop all the irregularities and malicious practices related to the mining sector, legislation in this sector is necessary."

Credit: Independent News Pakistan