Punjab’s Cement Manufacturers Get Temporary Reprieve from Supreme Court

The Supreme Court of Pakistan has granted a two-week stay to cement manufacturers, temporarily suspending the implementation of a Lahore High Court (LHC) ruling that required them to pay royalties on limestone at 6 percent of the ex-factory price of cement or clinker. If upheld, the verdict would replace the long-standing flat rate of Rs. 250 per tonne with a value-based formula introduced by the Punjab government on August 2, 2024. The LHC decision had concluded a two-and-a-half-year legal battle, allowing the Mines & Minerals Department to encash bank guarantees provided by manufacturers during the dispute. This raised the prospect of billions of rupees in payouts from manufacturers at a time when the industry is slowing due to the monsoon season and facing economic pressures like high energy costs and weak construction demand. Cement manufacturers had previously secured a stay against the new formula by submitting guarantees, but that protection was lifted after the LHC ruling. The Supreme Court’s interim order now pauses enforcement until a full hearing takes place, providing temporary relief to Punjab-based players, notably Maple Leaf and Bestway, who are said to be at the forefront of the legal challenge.