KP, especially NMDs, are blessed with enormous mineral resources, and this sector alone can drive NMDs and KP out of their socioeconomic uncertainties. Therefore, mineral exploration and mining must be guided and driven by a deliberate and all-encompassing mineral development policy and implementation mechanism.

In the introductory paper (published in the last edition of this magazine), I made an argument that security and development are interdependent and highlighted that the future of Khyber Pakhtunkhwa (KP)’s security and development lies in three fields, i.e., minerals and mining, tourism, and trade. In continuation to the brief introduction of each field covered in the previous article, my focus for this writeup will be the potential of mines and minerals in KP and how this potential can be utilized to address the woes of KP’s security and development. 
Pakistan is blessed with massive deposits of minerals located mostly in Balochistan, KP, including newly merged districts (NMDs), Gilgit-Baltistan (GB), Thar (Sindh), and Azad Jammu and Kashmir (AJK). KP has on its inventory several varieties of gems, metallic minerals, rare earth minerals, marble/dimension stones (50 types), and industrial minerals. The spread is almost all over KP’s landmass, especially in northern areas and NMDs. 
The total mineral worth of KP is estimated to be around Rs. 200 trillion. Dimension stones reserves are estimated to be around 3 billion tons (78% of the total estimated national reserves). In contrast, gems, metallic minerals, and industrial minerals are estimated to be around 10 billion tons in NMDs alone (20% of the estimated national reserves).

Authenticity about the exact quantity and grade of minerals may be contested; however, since minerals exist on the surface and sub-surface, general information and availability of minerals seem nearly accurate. The issue is that relevant geological maps or formalized data do not support the estimates of mineral reserves in KP. No formal survey to date has been carried out to ascertain the reliable estimates, type, and grade of mineral reserves in KP. The basis of KP Mine and Mineral Development Department (MMDD) estimates are traditional discoveries by local miners, Geological Survey of Pakistan (GSP) data (incomplete), rudimentary surveys, and piecemeal academic research.
Constitutional Apportionment and Licensing Mechanism 
The federal government formulates policies for energy planning, investment, and development. It is responsible for the development and management of large-scale power generation projects. The federal government also plays a vital role in synchronizing energy-related matters among different provinces, ensuring equitable distribution of resources, and resolving disputes. Provinces are autonomous in dealing with all types of minerals except radioactive and hydrocarbon substances, which are purely federal subjects.

KP is blessed with a large amount of oil and gas reserves that, if utilized effectively, can provide much relief to our country’s oil and gas imports. The overall need for oil in Pakistan is approximately 450,000 barrels per day (BPD). The current production of Pakistan is 88,262 BPD, whereas KP alone produces 35,000 BPD (40% of national production). 

In 2009, a mineral directorate (sub-department of the KP Industries Department) was converted into an independent KP MMDD under a dedicated secretary. Later, during post-FATA (Federally Administered Tribal Areas) merger in the year 2017, Mines and Minerals Act 2017 was extended, and district MMDD offices were made functional in NMDs. 
Three types of licenses, i.e., prospecting license (PL), exploration license (EL), and mining license (ML) are issued by KP NMDD through its online digitized Mine Cadaster System. The interest of local investors in prospecting and exploration licenses is encouraging. Currently, 869 PLs and ELs are issued in KP (including 623 PLs/ELs in NMDs); also, 1014 applications for prospecting licenses are in the process of approval by KP MMDD. 
Based on hearsay and inadequate geological information, small-scale mining (SSM) can quickly move towards exploration and limited mine development/operation phase. Whereas, for large-scale mining (LSM) companies, decision-making depends on reliable data obtained through international exploration processes of topo survey, geological survey, geophysical survey, drilling, and resource estimation.
KP Government has realized the need for geological mapping and delineation of prospective and mineralized zones. A federal department, the GSP, which KP has contracted at the cost of Rs. 334 million, has initiated resource mapping of the mineral reserves of KP. Ground surveys of six districts (Swat, Chitral, Khyber, Orakzai, North Waziristan and South Waziristan District) have been completed. In addition, a survey for the evaluation of placer gold along the Indus River (a part of KP) is in progress.

GSP has a massive pool of qualified Human Resource (HR) (165 geologists, 21 geophysicists, 27 chemists, 25 drilling engineers); however, it lacks modernized survey and exploration technology. Currently, it does not have the capability for geophysical surveys and beyond. Frontier Works Organizations (FWO)’s exploration capability is also currently limited to geological surveys; however, the organization is in the process of acquiring the latest technology for geophysical exploration. Multinational Mining Companies may be engaged in geological and geophysical explorations. Panoro Minerals Limited, a Canadian-based multinational company, is conducting general prospecting in KP. Exploration data authenticated through established international norms is a sellable product.

Mining Activities
KP mineral development policies and regulations put in place in the year 2017 (updated in 2022) have started to pay dividends. In KP, 442 mining leases have been issued to miners (mainly small-scale). 26% of KP’s mining leases are issued for NMDs. The current production of minerals in KP is 40.2 million tons/year. The revenue has increased from approximately Rs.  2.1 billion in 2018-19 to Rs. 8.2 billion in 2021-22, with a 61% increase in a short period of three years; however, in the complete province, very few JVs (joint ventures)/LSM projects are undertaken–including FWO’s signature Muhammad Khel Copper Mining Project. LSM is a cost-prohibitive, HR-intensive, risk-prone, and long-duration activity. The mining value chain explains that mining duration from small to large scale can be three to nine years. Hence in times to come, small-scale mining activities will form a significant share of mining.

The use of technology by small miners during the mining and processing minerals is limited. Small miners use informal mining methods, which causes loss to government revenue and provides limited benefit to local miners and the community. In mining, done manually or by blasting, 40 to 75 percent of the value of minerals is lost.

Value Additions, Certifications, and Marketing
In KP, many minerals are extracted in raw form and exported. Unfortunately, until now, even after 75 years of independence, no worthwhile mineral-based industry could be established except marble and ceramic. Not a single reputable gold or jewelry-related manufacturing or refinery setup exists in Pakistan. 
Minerals can contribute immensely to increasing Pakistan's exports if minerals, especially gemstones, are certified. There is no modern certified gemstone laboratory present in KP. KP MMDD has a laboratory with essential testing capability. However, its certification is not recognized globally. 

There is no exclusive, mineral-related, cutting and polishing vocational training institute (government and private) in KP. Pakistan Stone Development Company (PASDEC) is mandated and working to develop the dimensional stone industry of Pakistan. They are also in the process of setting up PASDEC-Marble City in Rislapur, which includes planned 222 marble factories and boosting the much-needed exports of the sector.
Regulatory Policy/Mechanism–Mines and Minerals
KP MMDD is responsible for regulating the mineral sector, mineral exploration and development, and the safety of exploration and mining operations. Superseding the 2014 policy, in the year 2022, new Mineral Development Policy was approved by the KP Government, which seems futuristic and is aimed at industrialization, digitization, broad base action, and strengthening the institutions. The central cardinals are land rights/land use options, development of integrated mining sector, LSM, Corporate Social Responsibility (CSR), transparency in mineral development activities, sector modernization and investing in the future.

It is expected that 500 million barrels of oil and 9 trillion cubic feet of gas in total can be produced from KP, which is almost six times the potential of Sui (The total potential of Sui is 1.6 trillion cubic feet).

Hydrocarbons
KP is blessed with a large amount of oil and gas reserves that, if utilized effectively, can provide much relief to our country’s oil and gas imports. The overall need for oil in Pakistan is approximately 450,000 barrels per day (BPD). The current production of Pakistan is 88,262 BPD, whereas KP alone produces 35,000 BPD (40% of national production). Currently, five oil and gas companies are working in KP, all Pakistani companies. Oil and gas production in KP is on a very limited scale. Only 42 producing wells in Naspa, Tal, Chanda, and Mela oil blocks in Kohat, Hangu, and Karak Districts are operational. Another 10 wells are also expected to be drilled by 2026 in KP; however, it is assessed that the production rate is less compared to the potential of KP.

It is expected that 500 million barrels of oil and 9 trillion cubic feet of gas in total can be produced from KP, which is almost six times the potential of Sui (The total potential of Sui is 1.6 trillion cubic feet). Exploration is currently taking place in Miranshah, Bannu West, Wali, Shewa, Lakki Marwat, and some blocks in Orakzai and Tirah, where high-impact oil and gas discoveries are expected in KP (80% of which lie in NMDs and the adjoining belt). Oil and gas exploration and production is a cost-intensive preposition, way beyond the capability of local companies. To take due advantage, a substantial investment poured in as Foreign Direct Investment (FDI) will have to be focused upon.

Non-Availability of Land Record
Since no land record is held in NMDs and the land belongs to the tribe, a particular provision of Ijlas-i-Aam under the KP Act is in place to reach an agreement between the investor and the tribe. However, it is not a neat arrangement, as investors must deal with a tribe comprising multiple individuals with different motives or interests simultaneously. Finalizing an agreement between investors and multiple tribes or stakeholders for a single prospecting piece of land is a huge challenge. The issue becomes even more pronounced for prominent investors or the corporate sector.

Superseding the 2014 policy, in the year 2022, new Mineral Development Policy was approved by the KP Government, which seems futuristic and is aimed at industrialization, digitization, broad base action, and strengthening the institutions.

The Impact of Security Situation in KP
The poor security situation is a huge challenge for KP to attract the desired investors, especially FDI, for mining and exploration and production projects. The inclusion of security components by small or medium-level miners makes mining an unviable proposition for them. More prominent companies such as FWO, Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL), etc., usually include the security component in their overall budget plan and employ Civil Armed Forces/Frontier Corps (FC) troops for security through requisition; however, such deployments put enormous stress on the already operationally committed troops in NMDs. Although providing security to companies and their employees is not a tremendous task for Armed Forces, as a better alternative, there is a need to reinvigorate the concept of ‘khawra’ (protection through locals), which can be included in the CSR package offered by bigger companies for the local population. This will provide numerous employment opportunities for the locals and create local stakes in the mining sector, providing security through development in KP. The Mohammad Khel Copper Mining Project in North Waziristan is a case in point. Rs. 102 million was paid as Quom share last year, Rs. 68 million was dedicated to CSR activities, and approximately 1,500 jobs have been generated for the locals. 
Environmental Issues
Mining activities, particularly open-pit mining, can remove forests and vegetation cover. This leads to the loss of carbon sinks, contributes to climate change, and can result in soil erosion and the degradation of local ecosystems. Mining also causes water and air pollution, including greenhouse gases (GHG) emissions, which are mainly linked to coal mining, waste generation, and overall land degeneration. KP mining policy lacks the requisite focus on incorporating environmental issues linked with mining and the measures to mitigate or compensate for them.
Corruption Affecting the Mines and Mineral Sector
Despite the digitization of applications and monitoring systems, corruption in the mine and mineral sector is often reported. Reported corrupt practices are self-interest based, inconsistent, and ambiguous policy-making; exploitation of investors at all levels; bribery of/by field and department staff; preparation of false and malafide reports by field monitoring teams; causing delays in Ijlas-i-Aam or favoritism by district administration; and pop influences. Corruption hinders progress, leads to inefficiencies, and undermines public trust.
The Way Forward
KP MMDD forms a Task Force led by a corporate mining consultant to review and propose measures in the existing policy, regulations, fiscal framework, media and marketing strategy, institutional building measures, and implementation mechanism with an overall aim to transform KP MMDD into a modern and investor-friendly organization.
Strengthening and restructuring of KP MMDD be carried out by contracting experienced specialists and experts for policy formulation in the department; employing qualified and enabled field staff for implementation of MMDD policies/regulations; and formulation of mechanisms to liaise/coordinate with other departments such as energy and power; C&W; planning and development; revenue; and finance departments. Retaining the consultants and officials for a longer term is necessary to take the reforms along. The rapid postings, transfers, and shuffling within the departments and ministries hinder policy implementation and result in the loss of institutional memory.
A special coordination and implementation committee be formed at the district level to finalize the pending Ijlas-i-Aam proceedings, which are essential to proceed with exploration and mining activities. To facilitate the corporate sector for LSM, the process of Ijlas-i-Aam be initiated and followed up for timely and fair agreement between investors and landowners.
Considering the overall financial health of federal and provincial governments, an exclusive strategy be formulated for public-private partnerships (PPP) and FDI in a complete value chain of survey, exploration, production, and product manufacturing/value addition and reduce the gap between federal and provincial mining institutions.
To attract local and foreign investors, KP MMDD to formulate a provincial online database for mineral deposits. For this:
▪    KP MMDD to ensure early completion of topo and geological survey by GSP. In addition, survey and exploration capabilities of Degan Exploration Works (DEW) ex-FWO and international exploration companies be integrated into an overall survey effort. This exploration and mining survey data is valuable and can be used to earn revenue.
▪  For the long term, a survey and exploration company be established by KP MMDD. In collaboration with multinational academia and exploration corporations, integral topo, geological, and geophysical survey/exploration capabilities be obtained by KP MMDD.
KP MMDD prepares solicited proposals for government-owned blocks. KP MMDD to identify potential blocks of exclusive minerals in NMDs for exploration and production by bigger companies through joint ventures. The model of FWO in North Waziristan District is replicated for all NMDs while focusing initially on South Waziristan District, Mohmand, and Bajaur. Establishment of KP mineral processing zones and mineral parks in SEZs (Special Economic Zones), especially Rashakai and Daraban be considered. PASDEC-Marble City Risalpur needs the requisite focus to effectively start functioning and provide machinery and expertise to small-scale minors and investors in low-cost and easy financial terms. Establishment of copper city at NWD by inviting international companies with expertise in copper mining.
On the same lines, oil and gas blocks with prospects be offered to friendly companies for FDI in Exploration and Production joint ventures with the local companies. Miran block, owned by Khyber Pakhtunkhwa Oil and Gas Company Limited (KPOGCL), has been proposed for investment by a friendly country. For increased business and revenue generation, opportunities be afforded to local investors to participate in national and international exhibitions.
KP MMDD mineral testing lab be upgraded and converted into a state-of-the-art facility for identifying the composition of extracted raw material and certification of mineral products. Private companies be encouraged to establish testing lab facilities as per the desired standards.
MMDD to focus on facilitation, ease of doing business, and capacity building of small-scale miners. It includes providing authentic topographic maps for exploration; shortening the procedural period for obtaining licenses/NOCs; provision of loans to small investors/entrepreneurs; introducing mechanized mining techniques to reduce the waste of precious mineral resources; and extracting export quality products. On the lines of PASDEC, establishing a company at the provincial level to provide machinery and equipment to miners, gemstone cutters, and jewelry manufacturers at subsidized rates is also required. One of the most important steps is facilitating access/linkup to end market/customer and skill development for the locals through Technical Education and Vocational Training Authority (TEVTA), industry department. 
To sum it up, what I have written seems complex, but it is not. KP, especially NMDs, are blessed with enormous mineral resources, and this sector alone can drive NMDs and KP out of their socioeconomic uncertainties. Therefore, mineral exploration and mining must be guided and driven by a deliberate and all-encompassing mineral development policy and implementation mechanism. 
What is important is to create awareness locally and internationally through joint efforts by KP and the Federal government, including roadshows, exhibitions, workshops, and through media. We need to understand that it is doable and well within our reach in order to help soothe the financial concerns in the long term and bring stability to the surrounding regions. Minerals and mining are indeed a part of KP's development and security.

The author has a vast experience of serving in erstwhile FATA during the War on Terror. He commanded a Brigade in South Waziristan, a Division in North Waziristan and is Commanding Peshawar Corps at the moment. He has also been Pakistan’s Defence Attaché to China.