IRON ore is among the top five minerals found in Pakistan and the country has an estimated 1.427bn tonnes of reserves of various grades.

The Kalabagh iron deposit is one of the largest in the country, having measured reserves of 350m tonnes. Meanwhile, 500m tonnes of iron ore deposits were discovered in Chiniot earlier this year; approximately 60-65pc of these are reportedly of high grade.

The current estimates are based on recent findings which show the probability of the presence of multiple metallic deposits in an extended area. The initial geological findings led to the founding of associated copper and gold deposits. However, intensive exploration studies are needed to confirm if commercially exploitable quantities of deposits are present or not.

The government claims that the “discovery of huge iron ore reserves in Chiniot can end the country’s ‘begging bowl’ culture”.

But can the recently discovered iron deposits end the ‘begging bowl’ culture that consecutive governments have habitually cultivated?

It depends on the appropriate planning echelon and efficient utilisation of the mineral wealth in the country’s earth crust. No doubt, iron deposits are of great economic significance, but they have not been exploited on a larger scale in the country. Annual iron ore production in Pakistan has been very limited, reaching 400,000 tonnes in recent years.

To ensure efficient exploitation of iron ore deposits, full-scale investigations are needed to delineate their structure, geometric extents and grade variability. A crucial step to attract foreign investments in exploiting the deposits is to categorise and validate the reserves according to internationally recognised codes like JORC. The government intends to facilitate these investments by meeting the challenges of electricity and gas shortages.

Pakistan also needs to analyse the global iron market to benchmark its operations with other market players. Worldwide crude iron ore resources are estimated to exceed 800bn tonnes, containing over 230bn tonnes of iron. Australia and Brazil together dominate the global iron ore export market, each having about a third of a share.

Globally, most of the iron ore is extracted from open-cut mines. Around 98pc of the mined iron ore is used to make steel. The ores used in iron and steel manufacturing are hematite, limonite, taconite and magnetite. Hematite is the most plentiful, whereas magnetite generally has the highest iron content. The iron content in the ore must be up to 60pc before it is hauled from the mine to the steel mill.

After the strategic shift towards the consuming of indigenous resources, local iron ore worth Rs5.53bn was processed by the Pakistan Steel Mills from 2008 to 2013. The Metallurgical Corporation of China has expressed an interest in setting up a mine-mouth steel mill in Chiniot. Indigenous iron ore, as a primary raw material in steel manufacturing, can play a pivotal role in shaping the country’s metallurgical industry.

The mine-mouth steel manufacturing unit in Chiniot will be a business-friendly initiative. The strategic layout of the project could reduce the cost of transporting the raw material and it could further be optimised by installing a conveyor belt from the point where the ore is exploited to the point where steel is being manufactured.

The government could attract skilled Pakistani professionals living abroad — like geologists, engineers and economists — with a multi-faceted experience by offering them competitive salaries and fringe benefits and employ their expertise in this sector. They could also be engaged to provide on-the-job training to young local professionals.

These efforts would facilitate the establishment of a state-of-the-art steel manufacturing industry and not only help in optimising existing operations but also boost capacity building.

It is also vital to emphasise that the inputs for the sector should be manufactured locally to capture most of the companies’ operating expenditure and elevate the country’s GDP.

Such resource discoveries not merely carry an opportunity to utilise natural resources for the betterment of the people but also stresses the need of capacity building in the sector.

There is a dire need for a state-of-the-art National Mineral Exploration Research Centre and mineral testing facilities to develop innovative and sophisticated technologies for exploration targeting and geometallurgy. Such institutions could help exploit the heaps of mineral resources in the country and rejuvenate the hampered economy.

atteequr@yahoo.com

Published in Dawn, Business & Finance weekly, November 2nd , 2015

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