NAB Alleges Khyber Pakhtunkhwa Facing Trillion-Rupee Losses in Gold Auction

The National Accountability Bureau (NAB) has voiced significant concerns regarding the undervalued minimum price established for the auction of gold deposits along the Indus and Kabul rivers. NAB asserts that this undervaluation is causing substantial financial setbacks for the province, potentially amounting to trillions of rupees. Furthermore, NAB has brought to light alleged irregularities in gold exploration activities.

Subletting and Revenue Discrepancies

According to official provincial government records, NAB alleges that leaseholders are openly subletting mining rights and imposing fees ranging from Rs500,000 to Rs700,000 per excavator on a weekly basis. These activities generate estimated weekly earnings between Rs750 million and Rs1 billion for the leaseholders, translating into trillions of rupees. In contrast, the government’s revenue from these operations is reportedly insignificant.

Chief Minister’s Response

Chief Minister of Khyber Pakhtunkhwa, Ali Amin Gandapur, stated that his administration conducted auctions for placer gold blocks at elevated prices. He clarified that the minimum price was fixed at Rs1.10 billion, and four blocks were sold for approximately Rs4.6 billion for a duration of ten years. He highlighted that no auctions had occurred in the preceding two decades, leading to widespread illegal gold extraction.

Transparency and Legal Compliance

The Chief Minister stated that the project underwent multiple advertisement cycles to ensure transparency. He also questioned the rationale behind halting a study initiated in 2023. He asserted that NAB was duly informed about the auction, with one of its officers present during the proceedings, and that all pertinent legal protocols were observed. Additionally, he affirmed that efforts are underway to curb unauthorized mining activities.

NAB’s Investigation Findings

Available documents indicate that a high-level meeting convened at NAB headquarters on August 7, attended by prominent provincial officials, revealed that the reserve price of gold blocks was intentionally miscalculated. The investigation further noted that a 2015 study by the National Centre of Excellence in Geology, Peshawar, which identified gold reserves ranging from 0.21 to 44.15 grams per ton, was disregarded. It is alleged that the department deviated from KP Auction Rules 2022 to favor specific bidders.

Suspension of Geological Mapping Project

Moreover, a geological mapping initiative launched in 2022 to assess new mineral resources was suspended in November 2023 exclusively for placer gold, raising suspicions of deliberate concealment. Previous auction attempts were unsuccessful due to inadequate publicity, which deterred international investors.

Auction Rule Violations

The documentation reveals that auction regulations stipulate that if an agreement is not finalized within 14 days, the offer should be rescinded. However, despite delays spanning several months, contracts and allotment letters were purportedly issued. Furthermore, mining operations allegedly continued in November 2024, despite a stay order issued by the Peshawar High Court.

Leaseholder Violations

NAB has underscored severe infractions by leaseholders, including failure to conduct environmental impact assessments, secure No Objection Certificates (NOCs) from the Environmental Protection Agency, establish processing plants, adhere to exploitation schemes, submit production or sales records, and the hazardous use of mercury, alongside the unlawful employment of unskilled miners.

Scale of Illegal Operations

According to NAB, over 1,500 excavators are operating illicitly within the specified area. Leaseholders are reportedly levying charges of Rs500,000 to Rs700,000 per excavator on a weekly basis, thereby amassing revenues ranging from Rs750 million to Rs1.05 billion per week. NAB estimates that trillions of rupees have already been generated, while the government’s share remains minimal.