Governance Challenges in KP’s Mineral Sector: A Policy Review

Abstract

Following the Eighteenth Constitutional Amendment, Khyber Pakhtunkhwa (KP) enjoys exclusive constitutional authority over its mineral resources. Despite this autonomy and significant geological potential, the province’s mineral sector continues to underperform due to governance, regulatory, and implementation failures rather than constitutional or legal constraints. This work critically evaluates the existing KP Mines and Minerals Act, 2017, administrative practice, and the proposed KP Mines and Minerals Bill, 2025, and presents a coherent reform framework grounded in rule-based governance, digitalization, environmental safeguards, and revenue optimization. The analysis finds that the current licensing regime is characterized by excessive administrative discretion, paper-based and fragmented processes, weak enforcement, and limited transparency. Licensing decisions lack standardized timelines, allocation pathways between administrative grants and auctions are unclear, environmental approvals often follow licensing rather than precede it, and royalty collection suffers from under-reporting and leakage. Digitization efforts to date remain partial and lack legal recognition, while institutional overlap between mining, environmental, and safety regulators undermines accountability. Community participation, benefit sharing, and clarity in merged districts remain inadequately codified, and dispute resolution mechanisms suffer from jurisdictional ambiguity. The proposed Mines and Minerals Bill, 2025 represents an important attempt at modernization through digitization, auction committees, enhanced environmental language, and revised institutional arrangements. However, the Bill largely articulates intent rather than enforceable obligations. To address these gaps, the work advances a focused reform agenda anchored in a Pareto approach: a limited set of high-impact interventions can deliver most desired outcomes. Central among these is the establishment of a legally recognized Integrated Digital Licensing and Cadastre System (IDLCS) and One-Window mechanism, declared as the sole official register for all mineral titles, approvals, compliance records, and revenues. This is complemented by codified allocation pathways distinguishing auction-based grants for high-value minerals from administrative licensing for small-scale operations; statutory licensing timelines with deemed approval provisions; integration of environmental clearance as a mandatory pre-condition; institutionalization and digitalization of royalty and production monitoring; and strengthened dispute resolution through specialized magistrates and a streamlined appellate framework.