Pakistan’s top accountability watchdog has unearthed serious irregularities in the auction and extraction of placer gold deposits along the Indus and Kabul rivers, raising fears of a massive loss to Khyber Pakhtunkhwa’s (KP) treasury.
According to a National Accountability Bureau (NAB) inquiry, leaseholders controlling these lucrative mining sites are making staggering profits while the provincial government earns only a fraction of the revenue. The findings were presented at a high-level meeting on August 7, attended by KP officials.
Billions Lost While Gold Flows Out
Internal NAB documents reveal that leaseholders are subletting their contracts, charging up to Rs700,000 per excavator per week. This practice is estimated to generate between Rs750 million and Rs1.05 billion weekly, yet government coffers see only minimal returns.
The report also highlights widespread violations of environmental and safety standards, including unregulated mercury use, absence of environmental approvals, and reliance on untrained labor.
Disputed Auctions and Ignored Geological Studies
Chief Minister Ali Amin Gandapur defended the government’s handling of gold block auctions, saying his administration raised the minimum bid price to Rs1.10 billion per block and sold four blocks for Rs4.6 billion on 10-year leases. He claimed the process followed all legal protocols under NAB supervision.
However, NAB’s probe paints a different picture. Investigators say the reserve prices for gold blocks were calculated without reference to a 2015 geological survey by the National Centre of Excellence in Geology, which estimated gold content as high as 44 grams per ton.
A more recent mineral mapping project launched in 2022 was abruptly stopped in November 2023, leading to suspicions of deliberate suppression of updated reserve data.
Court Orders Defied, Rules Ignored
Adding to the controversy, documents show that gold mining operations carried on well into November 2024 despite a stay order from the Peshawar High Court. Leaseholders reportedly failed to comply with KP Auction Rules 2022, neglected to submit production and sales records, and never installed required gold processing plants.
NAB also estimates that over 1,500 excavators are operating illegally across placer gold sites, deepening concerns that KP is losing trillions of rupees to unchecked exploitation.