Prime Minister Imran Khan, while reviewing progress on development of the national mineral resources on September 20, 2021, had said that a plan was in the final stage to tap iron ore reserves in Chiniot and Kalabagh. Declaring it as one of the government’s top priorities to exploit these major resources of iron in the Punjab, it was announced that investment would soon be sought for the purpose. Subsequently, the international development partners and experts’ groups were contacted in November last to invest in strategic mining assets, in particular the projects of Kalabagh Steel Mills and Chiniot Iron Ore Development & Steel Mills.
Prime Minister Imran Khan, while reviewing progress on development of the national mineral resources on September 20, 2021, had said that a plan was in the final stage to tap iron ore reserves in Chiniot and Kalabagh. Declaring it as one of the government’s top priorities to exploit these major resources of iron in the Punjab, it was announced that investment would soon be sought for the purpose. Subsequently, the international development partners and experts’ groups were contacted in November last to invest in strategic mining assets, in particular the projects of Kalabagh Steel Mills and Chiniot Iron Ore Development & Steel Mills.
China and Saudi Arabia are among the countries who had earlier shown interest to invest in these projects. The Memorandum of Understanding (MOU) for cooperation in mineral resources was signed between Pakistan and Saudi Arabia in February 2019. But nothing concrete has so far been done in this direction. Board of Investment (BOI) has recently proposed to go for the international bidding instead. It was to organize investment roadshows by March, followed by the formal bidding. However, the proposed plan has delayed, and bidding process has not been initiated as yet.
At some stage it was also planned to include these two projects for developing under the umbrella of the China-Pakistan Economic Corridor (CPEC). Pakistan’s CPEC Authority describes the project “iron ore mining, processing & steel mills complex at Chiniot” without any progress. The Framework Agreement on Industrial Cooperation signed with China last month during the visit of Prime Minister Imran Khan however does not cover any of these strategic projects.
Under the present socioeconomic scenario there are compelling factors to optimize development of mineral resources, but looking back, one realizes that this rhetoric would not materialize into actions as seen in the past. Kalabagh or Chichali iron deposits were discovered in the 1950s, are of about 500 million tons, and have long been considered suitable for use in steel mills but remain unutilized. Likewise, the discovery of iron and copper deposits in Rajoa in Chiniot in 1989 is of great economic importance. Unfortunately, no serious efforts were made by the past governments to explore, exploit, and develop these mineral resources economically. It was only in 2014 that the Punjab Mineral Company (PMC) was entrusted to undertake these activities, with the support of international firms.
First phase of the project was completed in two years, having determined economic viability of mining 340 tons of iron ore deposits, and its suitability for steelmaking. The second phase covered development of iron ore deposits.
It was planned to establish an integrated iron ore mining, processing and steel mills complex at Chiniot, to initially produce one-million tons of Hot Rolled Coils annually. Based on a detailed evaluation of the iron ore deposits found in the Chiniot and Rajoa areas (District Chiniot), the past government had announced the discovery of iron ore deposits in Chiniot District, along vast copper and gold deposits.
China and Saudi Arabia are among the countries who had earlier shown interest to invest in these projects. The Memorandum of Understanding for cooperation in mineral resources was signed between Pakistan and Saudi Arabia in February 2019. But nothing concrete has so far been done in this direction. Board of Investment has recently proposed to go for the international bidding instead. However, the proposed plan has delayed, and bidding process has not been initiated as yet
Punjab is endowed with large deposits of iron ore, one of the major national minerals, having small to medium reserve sizes.
The iron ore reserves in Punjab amount to about 2,000 million tons, spread over an area of 240,975 acres, according to latest geological and geophysical investigations. The vast iron ore reserves are in Makerwal-Sho, Mianwali (706 million tons), in Chichali, near Kalabagh, Mianwali (369 million tons), in Dera Ghazi Khan (268 million tons) and in Chiniot (610 million tons).
Generally, the exploited resources are low-grade iron ore, with about 34 percent iron content. Most of these reserves are proven and established after extensive exploration and investigations in the area. These prospective resources of iron ore have great geological significance and are feasible for use in iron and steel industry, but, understandably, the large-scale iron ore mining methodology is still to be determined and implemented based on mineralogy and geology of the ore deposits.
Iron ore deposits near Chiniot town were discovered in 1989 by the Geological Survey of Pakistan (GSP). It is a good quality iron ore (magnetite Fe3O4 and hematite Fe2O3), with the characteristics of high ferrous content, in the range of 41 percent —77 percent Fe2O3, according to the measured reserves study conducted by the GSP. Subsequently, the Punjab Mineral Development Corporation (PUNJMIN) had carried out detailed exploration studies and assessed about 110 million tons of proven deposits in the area.
Grade-wise, these deposits in Chiniot city are classified as smelting grade 12 million tons, high grade 8 million tons, medium grade 33 million tons and low grade 57 million tons, approximately. A pre-feasibility study done later also declared these reserves to be feasible for use in the steel mills. Roadmap for iron ore development on modern geo-scientific lines was therefore initiated by the provincial government in 2010 when the government had invited the Chinese consultants for iron ore exploration and resource estimation in Chiniot and Rajoa towns.
Reportedly, the iron ore samples were tested at laboratories abroad and were confirmed to be of high quality, comparable to those extracted in India, Brazil, and Russia. Initial studies indicated that huge mineral deposits were present in a 2,000 sq. km. area of Chiniot city and in Rajoa, three kilometer south of Chiniot town. The detailed study by the Chinese has also devised an economic extractive mining and metallurgical process.
The Chinese company was also given assignment to ascertain technical and economic feasibility for the establishment of small and mini steel mills using the indigenous iron ore.
Having established technical and commercial feasibility of mining project and use of iron ore for steelmaking, it was decided to set up a green-field steel mill at mine-mouth based on the indigenous resources employing suitable technology. According to the plan, an integrated steel mill of one million ton per year capacity would be set up, along a 200-MW captive power plant, at an estimated cost of over $662 million. The proposed project, to be developed as a joint venture of the Punjab government and private sector investors, is projected to use three million tons of Chiniot iron ore annually. In the first phase, a pilot demonstration steel plant of 25,000 ton per year is to be constructed at a cost of about $16 million, and after its successful trials the main project is to be undertaken.
For the purpose, development of essential infrastructure in the area is required to be undertaken on priority. The proposed project area is near population centers and has good infrastructural facilities including availability of skilled and semi-skilled workforce. Still, facilities for water, energy, transport, and communications are to be developed to cater to the requirements of project. Other minerals required for operations of a steel mill including coal are also found in the vicinity. Implementation of the project will result in employment generation, import substitution, and export growth, besides other socioeconomic benefits at national and regional levels.
Kalabagh Steel Mills and Chiniot Iron Ore Development & Steel Mills projects are part of the Strategic Plan for Mines Sector Development approved by Prime Minister Imran Khan. Other projects included in the Plan are East Ore Body (Saindak Copper-Gold project) and Barite-Lead-Zinc project, Khuzdar located in Balochistan, and North Waziristan Copper Deposit project in Khyber Pakhtunkhwa.
The writer is retired chairman of State Engineering Corporation
