Key Takeaways
- Punjab government cancelled a rock salt mining lease held by PMDC and auctioned the area to Sapphire Chemicals.
- The decision jeopardises a proposed $200 million investment in downstream processing and export-oriented operations.
- PMDC has challenged the cancellation in court, seeking suspension of the lease and protection of its rights.
Pakistan risks losing out on a significant $200 million US investment after the Punjab government cancelled a rock salt mining lease held by the Pakistan Mineral Development Corporation (PMDC) and auctioned it to Sapphire Chemicals.
According to a senior Petroleum Division official, PMDC had signed a memorandum of understanding with a US company for the proposed investment in downstream processing and export-oriented rock salt operations. However, on March 2, 2026, Punjab’s Mines and Minerals Department cancelled PMDC's 10-year lease renewal.
The cancellation has created uncertainty around the future of the project, as work had already begun with a federal government delegation visiting China to explore processing plants. Progress has since stalled following the lease cancellation.
At the centre of the dispute is a January 2024 Special Investment Facilitation Council (SIFC) meeting where PMDC says senior Punjab government officials had agreed to renew its leases in Kalabagh, Khewra and Warcha. The federal corporation maintains that the subsequent cancellation went against this commitment.
PMDC has challenged the decision in the Lahore High Court, seeking suspension of the lease cancellation and protection of its rights. Separately, a civil court in Quaidabad ordered the parties to maintain the status quo over the disputed property following allegations of unlawful interference, although the order would lapse unless extended.
The dispute comes despite the federal government’s broader push to move Pakistan's mineral sector away from exports of raw materials toward processed, higher-value products. The proposed $200 million investment was intended to support downstream rock salt processing and exports.
Sapphire Chemicals has now secured the mining area that PMDC had planned to use for supplying around 360,000 tonnes of rock salt annually under a separate 2024 partnership agreement. This further complicates the situation as it undermines the original supply chain arrangements.
