The National Accountability Bureau (NAB) has reportedly uncovered large financial irregularities in the auction and operation of placer gold mining along the Kabul and Indus rivers in Khyber Pakhtunkhwa (KP). According to reports, these mining operations may have caused losses worth trillions of rupees to the provincial government.
For reference, placer mining is a process of extracting gold from riverbed deposits formed through natural accumulation. NAB has reportedly raised concerns over the bidding process, particularly the minimum reserve price set for gold blocks during auctions.
NAB revealed that the minimum reserve prices at auctions were intentionally miscalculated to favour certain entities partaking in the bidding process. According to reports, NAB has indicated that leaseholders are subletting mining rights to excavator owners, charging as low as Rs500,000 per excavator for an entire week’s access to the mining site.
As per the details, a whopping 1,500 excavators were operating in KP, generating weekly earnings of up to Rs1.05 billion. However, reports maintain that the provincial government received only a minor portion of this amount as proceeds to the provincial exchequer.
KP Chief Minister (CM) Ali Amin Gandapur has hailed the auction of mines as a successful endeavour, outlining the benefits of mining operations. According to KP’s CM, the recent auctions witnessed access to mines being priced at higher amounts to generate larger revenue inflows.
Moreover, he reportedly revealed that the minimum price of gold blocks at auctions jumped from just Rs650 million to a respectable Rs1.1 billion, which translates into a 69.23 percent increase. The CM further underlined that the lease of four gold blocks at a ten-year term fetched a staggering Rs4.6 billion for the provincial exchequer.
As per KP’s CM, illegal mining has been rampant in the province for over 20 years, and successive governments have failed to host an auction for the sale of mining rights to firms. However, he outlined how his administration took measures to crack down on province-wide illegal mining operations.
According to reports, he also highlighted that the venture was advertised multiple times and that details of the auction were also provided to the NAB. Defending the provincial government’s moves, the CM revealed that an officer from the NAB was present at the auction’s proceedings.
Details from reports, however, highlight leaseholders generating trillions of rupees in revenue via illegal means, leaving the government with marginal revenue inflows.