Kazakhstan and Pakistan Mining Investment in Gilgit Baltistan: A Legal and Strategic Explainer Dr Shabir Choudhry, February 2026, London.

 Kazakhstan and Pakistan Mining Investment in Gilgit Baltistan: A Legal and Strategic Explainer

Dr Shabir Choudhry, February 2026, London.

What is being proposed?

·       A Kazakh company, Elaman Group, has announced an initial investment of approximately USD 20 million in placer gold mining in Gilgit-Baltistan (GB).

 

·       The proposal emerged following high-level Pakistan–Kazakhstan diplomatic engagements and meetings with Pakistan’s Board of Investment.

• The project is presented as a commercial mining venture, with the possibility of future expansion.

Why is this not just a commercial deal?

This investment raises constitutional, legal, and international implications, primarily because:

·       Gilgit-Baltistan is legally and constitutionally part of the erstwhile state of Jammu and Kashmir, and not a province under Pakistan’s 1973 Constitution.

 

·       Its governance is based on executive orders and subordinate legislation, and not full constitutional incorporation.

 

·       Mining agreements in such territories carry higher legal and political risk, both domestically and internationally.

Who controls mineral resources under Pakistan’s legal framework?

• Under Article 142 of the Constitution, legislative authority over hard minerals (gold, copper, gemstones) ordinarily rests with provinces.

 

• Oil and gas are jointly owned by the federation and provinces under Article 172(3), but hard minerals are not.

Gilgit-Baltistan’s position is legally distinct:

It is governed under the Gilgit-Baltistan Order 2018.

·       Local mining activity is regulated under the Gilgit-Baltistan Mining Concession Rules 2016, derived from the 1948 Mining Act.

 

·       Laws passed by the Pakistani Parliament do not automatically apply to Gilgit Baltistan unless formally adopted by the GB government.

 

·       Even when the GB Government formally adopt any law passed by Pakistan, it is not legal because the Assembly is just a puppet and does not have a legal or moral value.

What role does the federal government play?

What Pakistan can do:

• Facilitate foreign investment via:
• Board of Investment
• Ministry of Foreign Affairs
• Ministry of Commerce
• State Bank of Pakistan

Sign bilateral investment treaties (BITs).

Provide access to international arbitration frameworks such as ICSID, which is a World Bank–affiliated international arbitration body created in 1966 to resolve disputes between foreign investors and states.

Its full name is the International Centre for Settlement of Investment Disputes, which was established under the ICSID Convention (1965). Its Headquarters is in Washington, D.C, and Pakistan is a signatory member.

However:

·       Licensing, royalties, leases, environmental approvals, and local benefits are administratively tied to GB authorities.

 

·       Any ambiguity between federal facilitation and local jurisdiction creates legal vulnerability.

Why does Gilgit-Baltistan’s disputed status matter?

·       Gilgit-Baltistan is internationally linked to the unresolved Jammu and Kashmir dispute.

 

·       Long-term mineral concessions without safeguards may:

• Be challenged internationally,
• Create complications in arbitration,
• Undermine Pakistan’s stated legal position on Kashmir.
• Best practice requires inclusion of a Non-Prejudicial Clause, clarifying that:
• The investment is administrative and economic,
• It does not affect the final constitutional or international status of the territory.

Key legal risks if clarity is not ensured

• Unclear ownership of minerals
• Ambiguous revenue-sharing formulas
• Disputes over royalties and taxation
• Environmental litigation
• International arbitration exposure
• Local resistance due to a lack of consultation or benefit-sharing

Comparison with the Reko Diq Case: Lessons Unlearned?

What happened at Reko Diq?

• A mining agreement was signed without sufficient legal coherence between:
• Federal authorities
• Provincial (Balochistan) jurisdiction

Pakistan faced ICSID arbitration.

• The result was:
• A multi-billion-dollar damages award,
• Years of litigation,
• Severe reputational and financial cost.

Key similarities with the Gilgit-Baltistan case

• Foreign investor protection under BITs
• Strategic mineral resources
• Complex centre–local jurisdiction issues
• Weak early-stage legal structuring
• Potential exposure to international arbitration

Key differences

• Balochistan is a constitutional province; Gilgit-Baltistan is not.
• GB’s legal position is more fragile, not less.
• Any adverse ruling involving GB may have:
• Wider international implications,
• Kashmir-related political consequences.

Core lesson from Reko Diq

The problem was not foreign investment — it was legal incoherence, institutional conflict, and premature commitments.

If similar mistakes are repeated in Gilgit-Baltistan:

• The legal consequences could be more severe,
• The political fallout could be broader,
• And the space for corrective action could be narrower.

What should be done before finalising any agreement?

Develop a bespoke Mineral Legal Framework for Gilgit-Baltistan.

Ensure:

·       Clear ownership rules

·       Transparent royalty and revenue-sharing

·       Local employment guarantees

·       Environmental safeguards

·       Technology transfer clauses

·       Explicit dispute-resolution mechanisms

·       A Non-Prejudicial Clause on Territorial Status

·       Secure formal adoption by the GB legislative assembly

• Only then proceed with long-term international contracts

Conclusion

Foreign investment in Gilgit-Baltistan’s mineral sector is not inherently problematic, but the legal ambiguity is.

Without coherence between:

• Islamabad government facilitation,
• GB government,
• Constitutional limitations,
• And international obligations,

Even well-intentioned investments risk becoming future liabilities — as Pakistan has already learned the hard way. END.