Mine Owners Association has expressed fifteen severe reservations on Khyber Pakhtunkhwa Mines and Minerals Development and Regulation Ordinance 2016, saying that the ordinance does not offer any incentive that would attract foreign investors rather would act as a deterrent for a foreign investor to invest in the mining sector.
Expressing reservation over the establishment of Khyber Pakhtunkhwa Mineral Investment Facilitation Authority and its members, the stakeholder of the mining sector said that some of the members are in the representative capacity and their absence amounts to non-protection of rights of the genuine and original stake holders eg President, Mine Owners Association and President, Mine Workers Association.
It said that no rules under the ordinance have been framed as yet nor have any been proposed or presented for approval as yet. Under the ordinance almost unlimited and unchecked powers have been given to the authority, which itself would decide upon the quorum necessary for a meeting as 1/4th of the total members followed by a mandatory notice being restricted to barely hours prior to the meeting.
With such importance given and such vast powers given to the Authority, the law needs to be properly reviewed by legal experts in the law department.
Under the new arrangement Mining Lease would be granted for a period of 30 years to a Mine Owner, but lacks clarity with regards to the renewal of the lease, fate of Mine Owner after the expiry of the Initial Period of 30 years. It is imperative to mention here that during the period of Mining Lease ie the 30 years period; Mine Owner invests most of his lifetime in developing quarries and mines. Clarity as to the post expiry of the initial 30 years lease period be provided and a clear set of rules or provisions shall be added to the ordinance in order to allow the Mine Owner to get some kind of investment security.
Similarly, there is lack of clarity as to the satisfaction of the Government before entering into any Minerals Agreement with any substantial investor. It is imperative that the Government should frame criteria for a substantial investor to fulfil before it can enter into a minerals agreement. Clarity and transparency would allow the substantial investors to easily complete their due diligence before investing in the mining sector. The association has also called for clarification on good exploration practices shall be specified and well defined.
The Mine Owners' Association is also critical of ban on issuance of more licenses and leases to the same persons and termed the restriction irrelevant, saying a person with expertise in a particular mineral or mine and reputation in the market should be encouraged instead of putting a seal on his activities.
The association has also questioned the imposition of bar on the assignment and called for further clarification. The association while totally rejecting the Section 35 of the Ordinance regarding compensation has demanded for its completion deletion from the law.
The association has raised objections over the payment of compensation under Section 44 of the Ordinance, which says that a holder of a mineral title shall pay such compensation as may be assessed in accordance with the law for the time being in force for all damage, injury or disturbance which may be done by him, or on his behalf, in exercise of the rights granted by the license or the lease and shall indemnify the Licensing Authority and the Government against all claims which may be made by third party in respect of any such damage, injury or disturbance.
The stakeholders have also rejected the Section 45 and called for its revision. The Section says that if the Licensing Authority has reason to believe that a holder of a mineral title is working in a manner contrary to the conservation of mineral property, it may require the holder in writing to remove the defects or amend the method of mining, exploration or prospecting within a period of one month.
If the holder of the mineral title fails to comply with the instructions within the specified period, the Licensing Authority shall suspend the work of the extraction of mineral in whole or in any part of the area demised under mining title till such time the defects are removed to the satisfaction of the Licensing Authority.
If the defects are not removed or the method of mining is not amended as instructed within one month from the date of the stoppage of work, the mineral title may be cancelled. A holder of a mineral title shall not depillar or abandon mines unless depillaring is the part of the approved scheme.
The association has also demanded clarity on Section 49, which says that the government shall at all times have, on payment of fair market price, the right of pre-emption of the minerals lying upon the land in respect of which a mineral title has been granted, or elsewhere under the control of the holder of the mineral title.
Regarding Section 52, the association has called for total revise. Under the section, the government has banned the sub-letting of mining lease. It says that no holder of a mineral title shall transfer the liberties, powers, privileges and obligations in form of sub-letting or sub-contracting under the license or lease, as the case may be, to a third party in respect of the area demised under the mineral title for the purpose of extraction of the mineral. The mineral title shall be cancelled by the Licensing Authority, if the provisions of sub-section (1) are violated.
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