ISLAMABAD: Pakistan could lose a proposed $200 million investment from a US company after a dispute over the Warcha rock salt mining lease in Punjab created uncertainty for a major value-added mineral project.
According to officials, the Pakistan Mineral Development Corporation (PMDC) had signed a memorandum of understanding (MoU) with a US firm to establish downstream rock salt processing facilities aimed at boosting exports of high-value mineral products. However, the project has stalled following the cancellation of PMDC’s mining lease by the Punjab government.
The Punjab Mines and Minerals Department revoked PMDC’s 10-year lease renewal for the 291-acre Warcha rock salt mine on March 2, 2026, before auctioning the same mining area to Sapphire Chemicals for Rs. 2.58 billion, payable over a period of 10 years.
PMDC maintains that the decision contradicts commitments made during a Special Investment Facilitation Council (SIFC) meeting in January 2024, where provincial officials had reportedly agreed to renew the corporation’s leases at Kalabagh, Khewra, and Warcha. The corporation argues that the lease cancellation could damage investor confidence and discourage foreign investment in Pakistan’s mineral sector.
Officials said preliminary work on the proposed investment had already begun, including a federal delegation’s visit to China to explore processing technologies. However, progress has since come to a halt due to the ongoing legal dispute.
The controversy has also cast doubt on a separate 2024 partnership between PMDC and Sapphire Chemicals to establish a 200,000-tonne-per-year soda ash plant. Under that agreement, PMDC was expected to supply approximately 360,000 tonnes of rock salt annually, a plan now complicated by the transfer of the mining area.
PMDC has challenged the Punjab government’s decision in the Lahore High Court, seeking suspension of the lease cancellation and protection of its mining rights. A civil court in Quaidabad has also directed both parties to maintain the status quo over the disputed property until further proceedings.
The dispute comes as the federal government seeks to shift Pakistan’s mineral industry from exporting raw materials to producing value-added products, with the proposed $200 million US investment viewed as a key step toward expanding downstream rock salt processing and export capacity
