Is Chiniot a premature promise like Reko Diq, Thar coal?

KARACHI: Despite that the government projecting the mineral discoveries in Chiniot as fate-changing for Pakistan, the man overseeing the project has admitted that there has been no feasibility report for the find yet – which means the authorities don’t actually know the exact quantity of minerals present in the area at the moment, the exact quality or in fact have a cost-benefit analysis for extracting the minerals.
Speaking to Geo News’ Shahzeb Khanzada, Dr Samar Mubarakmand, a prominent scientist who is currently chairman of the Punjab Mineral Development Company, which is overseeing the project, on Wednesday said that the optimism is based only on estimates but said the deposits were “very big.”
Prime Minister Nawaz Sharif himself visited the site on February 11 to deliver an optimistic message to the nation about the possible “breaking of the begging bowl” through this discovery and went as far as to invite investors from across the country and the world to set up industries in the area. The prime minister had on the occasion congratulated the entire country on the find.
Yet, the reality of the matter is substantially less obvious – at least for the time being.Of the minerals discovered from the site, the one emphasised particularly was iron ore – a key substance that is the most important ingredient in making steel.
However, the cost of extracting iron ore outweighs the price of the mineral itself when the substance is extracted from beyond a certain depth beyond 80 metres, according to international mining standards and estimates, including the Australian mining ministry. Australia has one of the leading mining industries in the world. Recent reports have held that in Chiniot the iron ore deposits are being found up to a depth of 120 metres.
Refuting this, Dr Mubarakmand told Khanzada that the iron deposits were found at a depth of around 80 metres and went on to 400 metres. However, even if that is the case, the fact is that value of iron ore in the international market has fallen acutely over the last a few months from $96 per metric ton to about $67 – which leaves lesser cost room for extraction, which, beyond a certain point, is no longer commercially viable.
However, Dr Mubarakmand has stressed that there are many other minerals that have been discovered, most notably copper, but it would be premature to comment till the finalisation of the feasibility report of the project. He was of the opinion that the entry of self-proclaimed experts on the matter had created confusion on the issue. He stressed that feasibility had more to do with iron ore – but given the high price of copper, the project was in his opinion certainly very feasible.
Then there is the matter who will cover the massive costs of extraction even if it is found to be viable and feasible. Dr Mubarakmand said that there were a number of options available for funding – including foreign investment.
When questioned about the reservations that any foreign investor would have given what happened with the foreign company that was meant to explore Reko Diq’s gold and copper mines, Dr Mubarakmand insisted that people would still be interested.
Dr Mubarakmand said he did not want to speak about the “realities” of Reko Diq as it would have consequences. He said he was defending Pakistan’s case in the international courts and claimed that TCC had themselves abdicated their rights to mine in Balochistan given the security threats in the province.
He disagreed with the notion that the foreign company working in Reko Diq had been hard-done. Dr Mubarakmand said that the foreign company deal was unfair for Pakistan and there was next to no investment being done by the company and no benefit for the country.
However, interestingly, he himself had stressed that Pakistan did not need foreign funding for such ventures (as was the case with the now-stalled Reko Diq) and could fund them itself. Now for Chiniot he was mentioning it as a key option.
The Chiniot project is the third “major find” in Pakistan in terms of mineral deposits. The fate of the two projects before this – Reko Diq and Thar coal – had received a lot of hype in the last a few years but remained in limbo. Interestingly, both these projects also had Dr Mubarakmand as a leading authority/expert at the last stage.
For Reko Diq, Dr Mubarkmand had been leading voice pushing for local handling of the project and insisting that it could be financed locally. This claim seems to have been proved wrong on the face of it with the project being basically abandoned for its high cost. He also insisted that the project had stalled because the promised requisite funds required were never released by the Balochistan government despite being in the budget. He defended the stoppage of work, saying it was not possible to work without money and said staff hadn’t been paid for a long time.
Thar coal, meanwhile, which was supposed to power Pakistan for “500 years,” as claimed by Dr Mubarakmand himself, also stands in limbo and the quality of coal it now seems is not fit for the sort of power generation that was being claimed according to the most reports.
As far as Thar coal goes, Dr Mubarakmand handled one pilot project for power generation – which is yet to produce concrete results. Dr Mubarakmand defended this shortcoming, saying that they had been given less than “0.8 percent” of the Thar coal site to work on. He insisted that the project was a success and that the prime minister himself had come and seen a demonstration. He said he didn’t have to prove anything to anyone and he was working for the country. When it was pointed out to him that the authorities had stopped financing for his project seemingly because there were no concrete results, he also once again questioned the government’s unwillingness to release funds for “his projects” and said it was only because of this factor that there was a lack of results.
Though he was a leading man in three recent major mining projects, he admitted that he wasn’t an expert on the matter of mining in terms of qualifications, but said he never claimed to be one either. He insisted that he was managing the projects efficiently and had studied the topic deeply over the last a few years.
However, he said that one of the projects in Thar was still on track. In this regard, he revealed that the first megawatt of power from Thar would be produced in April this year – and said his detractors would see themselves embarrassed when this happened.