How Pakistan's Mineral Concession Licensing Actually Works (From Someone Who Holds 16)

Most foreign investors I meet have already been told three different versions of how mining licenses work in Pakistan. Usually by a consultant in Dubai who's never been north of Islamabad.

So let me walk through what's actually true. I hold 16 concessions across Gilgit-Baltistan. I've been through the paperwork, the renewals, the inter-departmental letters, the GB Minerals Department in Gilgit, and the federal layer on top. This is the version I'd want if I were sitting in Frankfurt or Shanghai trying to figure out whether to fly out.

The thing nobody tells you up front: mining is provincial

Pakistan's constitution puts minerals under the provinces, not the federal government. That single fact explains 80% of the confusion foreign investors run into.

Each region runs its own minerals department, its own rules, its own license formats. Punjab does it one way. Balochistan another. Khyber Pakhtunkhwa another. And Gilgit-Baltistan — where most of the critical minerals story actually sits — has its own framework under the GB Mineral Resources Department, governed by the GB Mining Concession Rules 2016 (amended a few times since).

So when someone tells you "Pakistan's mining law says X," ask which province. If they can't answer, they don't know the file.

Federal involvement still matters though. SECP for company registration, the Board of Investment for incentives, State Bank for repatriation of dividends, and FBR for tax. But the actual license — the document that says you can drill, extract and export — comes from the provincial or regional minerals authority.

The four licenses you'll actually deal with

There are basically four instruments in the GB system, and the order matters.

Reconnaissance License (RL). Usually one year. Big area, sometimes 1,000 sq km or more. Lets you do regional surveys, remote sensing, basic sampling. No drilling at scale. Honestly most serious investors skip this and partner with someone who already did the recon work. That's typically where we come in.

Exploration License (EL). Three years, renewable twice for two years each. This is where the real work happens — trenching, drilling, resource definition, feasibility. Area is smaller, usually capped around 250 sq km in GB but it depends on the mineral and the block. The application needs a work program, financial capacity proof, and a technical team CV pack.

Mineral Deposit Retention License. Less common. Used when you've proven a deposit but market conditions don't justify production yet. Useful for lithium and rare earths right now where prices are soft but the deposit is real.

Mining Lease (ML). Thirty years, renewable. This is the prize. You get exclusive rights to extract and sell. Royalty rates vary by mineral — for context, copper in GB sits around 3% of pithead value, gold higher, industrial minerals lower.

A foreign investor coming in cold cannot just walk into the Gilgit secretariat and file for an EL. Technically the rules allow it. Practically, you need a Pakistan-registered company, a local technical sponsor, and a track record the department recognises. This is why almost every serious entry happens through a JV with an existing license holder.

What the application file actually contains

I've prepared more of these than I care to count. The file the department wants includes:

• Company registration documents (SECP incorporation, NTN, memorandum)
• Proof of financial capacity — bank statements, audited accounts, or a parent company guarantee
• Technical capacity — CVs of the geologist, mining engineer, and HSE lead
• A work program with a budget broken down year by year
• Topo sheets and coordinates of the block (this is where most files get bounced — overlap with existing licenses is the single most common rejection reason)
• Security clearance, especially for foreign directors
• Environmental approval from GB-EPA for anything past basic recon

Timeline from a clean file to an EL in hand? Six to nine months if nothing is contested. Twelve to eighteen if there's an overlap dispute or a security clearance hold-up. Anyone promising you 90 days is selling you something.

Where foreign investors get stuck

Three places, in my experience.

First, the assumption that a federal MoU covers the license. It doesn't. The Special Investment Facilitation Council (SIFC) can smooth a lot of doors, and it genuinely has helped since 2023 — but the license itself still gets signed in Gilgit, not Islamabad. SIFC is an accelerator, not a substitute.

Second, security clearance for foreign nationals and foreign-owned entities. This goes through the Ministry of Interior and takes its own time. Start it early. Like, the day you incorporate.

Third — and this one hurts people — the assumption that the seller of a license has clean title. I've seen deals collapse because the EL being sold was already in dispute, or the renewal was overdue, or the work commitment from the previous cycle was never met and the block was technically lapsed. Due diligence on the license file itself is as important as due diligence on the geology.

How we usually structure things with foreign partners

Most of our JVs look something like this: GBX contributes the license, the local team, the GB government relationships, the logistics chain down to Karachi port, and the existing exploration data. The foreign partner brings drilling capex, technical depth on a specific commodity, and the off-take channel into China, the EU, or wherever the end market sits.

Equity splits vary. Royalty overrides, milestone-based earn-ins, and pure off-take agreements without equity are all on the table depending on what the partner actually wants. A Japanese trading house wants something very different from a German automaker's supply chain arm, and the structure has to follow that.

One last thing worth saying directly. The Pakistan mineral concession license system isn't broken. It's slow, it's paperwork-heavy, and it rewards people who show up in person. But it's lawful, predictable in its own way, and the licenses, once issued, are respected. The reason more foreign capital hasn't flowed in isn't legal risk. It's that not enough people have actually flown to Gilgit and sat across the table.

Is that going to change in the next two years? Watching the calls coming in from Brussels and Tokyo, I'd say yes.