Pakistan Implements Policy to Develop Domestic Iron Resources

Expecting increased demand and spiraling prices of steel in the international market, the government of Pakistan has started work on formulation of a new National Steel Policy, aimed at tapping 1.42 billion mt of proven iron ore reserves in the country.

Initially, the government was focusing on 10 sites located in Balochistan, Punjab and North West Frontier Provinces, and planned to establish steel mills in these areas in collaboration with foreign and local investors. A source in the Ministry of Industries, Production and Special Initiatives said the preparation of a policy draft was under way and the government would provide special incentives to the foreign and local investors.

Under this initiative, the private sector would be encouraged to invest in these areas, and offered incentives such as cuts in duty or zero duty on imports, provision of land and other infrastructure facilities, the source said.

Setting up of mills at the specified 10 sites would reduce the cost of production and help in catering to the steel demand of the country, the source added.

The selected areas of Punjab where the government wants to exploit steel are Makerwal-Sho (Mianwali) having iron ore reserves of 706 million mt, Chichali- Chughlan (Mianwali) (369 million mt), DG Khan (56 million mt) and Chiniot (17 million mt).

In Balochistan, the areas identified are Pachinkoh (Nokundi) containing estimated reserves of 45 million mt, Chigendik (Nokundi) 5 million mt, Chilghazi (Dalbadin) 2.47 million mt and Dilband (Mastung, Kalat) some 200 million mt.

In NWFP, Pezu (DI Khan-Bannu) having reserves of 13 million mt and Damar Nisar (Chitral) containing 3 million mt of iron ore deposits have been identified.

Presently, Pakistan’s annual steel requirement is about 5 million mt while it produces 4.4 million mt (long products 3.678 million mt and flat products 0.733 million mt). The gap is met through steel imports costing millions of dollars. Against the backdrop of rising steel-demand expectations in the future, the government is now focusing on developing its own resources which would not only boost the local industry, but also help reduce the import bill.

Sources said a local steel mills’ group was negotiating with Chinese investors to help tap 369 million mt of reserves in Chichali-Chughan.