Strategic Metals’ Development for Economic Turnaround

Pakistan is facing unprecedented economic challenges threatening economic survival with dignity and honour. Total internal and external debt liabilities are swelled at PKR 29861 billions (USD 241 billion including external debt of USD 95 billions), with the compulsion for allocation of USD 25 billion for building new water dams, making the current account deficit USD 21 billions, annual debt servicing and large portfolio of pending infrastructure projects that cannot commence due to paucity of funds. We borrow international loans to retire debt. Low exports and high imports, and the expenditures on war against terrorism present a grim economic scenario. While the Government is determined to improve revenue collection system, inculcate austerity in public and private sectors, and enhance agriculture and industrial output; these measures are not enough to generate desired funds for meeting budgetary and debt shortfalls.
Some bold, innovative and futuristic measures are necessary in the field of metallic minerals that have not been touched earlier at a scale it deserves. A dispassionate view of mines and minerals sectors, particularly the precious metals of strategic commercial value, indicates that nature has endowed us with worth trillions of USD presenting an opportunity for development and rich economic fallouts.
Our economic future is linked to these natural gifts. Tethyan belt that originates from Hungary and passes through Ukraine, Romania, Bulgaria, Greece, Turkey, Georgia, Iran, Pakistan (Balochistan) and Afghanistan contains 90% major copper and gold deposits of the world. The global and regional superpowers have fixed their attention on these treasures and are unlikely to spare opportunities for extraction for their financial gains on one pretext or the other. Afghanistan is facing this scenario wherein one of the province’s precious metals/minerals including rare earth metals (REMs) valued at one trillion USD are in danger of extraction by foreign powers while India has already secured lease of second-largest iron ore deposit near Kabul. Crux of the matter being that nations who fail to capitalise on their natural resources and are unable to protect them from foreign intrusions are eventually bound to lose to others.
Iraq is another country naturally endowed with the world's largest reserves of sulphur (six million MT), phosphorite (1.7 billion MT) among other minerals. Metallic minerals such as copper and iron are also found in sizeable quantities. All are under exploration, mining and commercial sales under foreign companies.
Afghanistan and Iraq are under occupation by U.S. and Allies. It is not difficult to visualise who will benefit from commercial exploitatation of minerals of these countries. Pakistan is fortunately a sovereign state possessing strong military capability for the defence of its borders and resources, thus enabling the Government to take decisions on commercial exploration/marketing of minerals in better economic interest of the country.
Mountains of Gilgit-Baltistan (GB), KP including erstwhile FATA, and Balochistan are richly endowed with metals like copper, iron, molybdenum, platinum, lithium, gold, silver and REMs of high quality and quantity. REMs are defined as the set of 17 chemical elements in the periodic table. They tend to occur together in nature. However, because of geo-chemical properties, REMs are typically dispersed and not found concentrated as minerals.
In Balochistan, Reko Diq (Tanjeel block) copper and gold deposits are valued at one trillion dollars. Here copper and gold ore deposits are greater than five billion MT. Of these, copper contents are 0.64% while gold contents are 0.44 gram per MT. Tethyan Copper Company (TCC) had entered a joint venture (JV) agreement with the Government of Balochistan for exploration and mining of Reko Diq but fell short of performance leading to cancellation of contract. The cancellation was challenged by TCC in International Centre for Settlement of Investment Disputes (ICSID) where verdict came in favour of Pakistan with the precondition that expenditures incurred by TCC shall be returned by Pakistan. ICSID allowed local development of a block in Reko Diq. Pakistan started indigenous development and reached near breakthrough when the project was closed for unknown reasons. Anyway, divine favour in the form of cancellation of JV contract is an opportunity for the country to re-examine value and merits of indigenous development of Reko Diq or enter into JV contract with a country willing to establish a metal refinery in Pakistan.

It’s time now to shift national focus on exploration, mining, refining within Pakistan of strategic metals such as copper, gold, molybdenum and REMs before marketing abroad.

Saindak copper ore deposits are 412 million MT containing 0.4% copper, 0.5 gram per MT of gold and 2.8 gram per MT of silver. The project machinery has the capacity to produce 15,800 MT of blister copper per annum containing gold and silver. First South Ore Body in Saindak of ore reserves of 111 million MT with 0.43% copper was leased to China in 2002. The reserves should have lasted for 19 years at agreed daily extraction rate of 12,500 MT but exhausted in fifteen years with annual production of 20,000 MT of blister copper per annum. The second North Ore Body of 28 million MT with 0.44% copper is now with China since October 2017 for five years despite concerns regarding over mining. The third one termed East Ore Body having reserves of 273 million MT with copper 0.34% is intact and deserves indigenous extraction utilising local technical skills/expertise for producing blister copper blocks and refining in another country like Iran, KSA, or UAE. It may be mentioned here that no metal refinery is set up by China in Balochistan for separation of copper from gold and other metals. These are taken by China in blister blocks form to their country for refining/separation of copper from gold and other metals before sale in the international market.
Copper deposits in Balochistan at Dasht, Durbanchah, Uthal/Lasbela area are estimated at 400 million MT plus and are untapped. Chigendiq of Balochistan is another area with deposits of blue color copper more than four times bigger in quantity than Reko Diq. Molybdenum is found here at the depth of 1300 ft or so. For readers’ interest, molybdenum, is an expensive metal (i.e., $100000 per MT) with vast applications in spacecrafts, missile systems, and electronic equipment etc.
Copper deposits in the Gilgit region are in sizeable quantum and of high quality but are yet unexplored at a commercial scale. REMs are another expensive commodity found in Reko Diq, Saindak and other parts of country that include, KP (including FATA) and GB.
According to U.S. Gedogical Survey 2017, world total REM reserves are 120 million MT. The distribution: China 44,000,000 tons; Vietnam 22,000,000 tons; Russia 18,000,000 tons; South Africa 860,000 tons; India 6,900,000 tons; Australia 3,400,000 tons; Greenland 1,500,000 tons; USA 1,400,000 tons and 14.2 MT.
Pakistani REMs are yet to be reflected on the world's geological map. China has monopolistic control on major markets of REMs with strategic implications for developed countries as REMs are used for advanced technology applications such as advanced fighter/bomber aircraft, satellite guided missile systems, lasers, infrared/vanadium lasers, nuclear batteries, and neutron captures etc. Chinese REMs demand is growing in developed countries like U.S. and Japan, whereas China itself is finding it difficult to meet the domestic and overseas demand.
The international market for REM-Oxide is speculated around $8.26-9.48 billion in 2020. Chinese are producing full group of 17 REMs. The market value in China of top two REMs i.e., praseodymium and neodymium oxide are USD 64150 and USD 52500 per MT respectively.
In India few REMs were not known until Russia and U.S. assisted it in forming the government-owned company called Indian Rare Earths Limited which is directly under Indian Atomic Energy Commission.
Pakistan can attract FDI in REMs. Japan could be one prospective investor as it has REM consumption of 27000 MT per annum mainly procured from China. China is rationing consumption for client countries particularly the industrial rival Japan. Even U.S. is likely to be affected on account of Chinese policy on rationing of REMs and ongoing trade stand-off between U.S. and China. Global demand for REMs will grow with the growth of middle class across the world as they are the end users of high technology systems.
It’s time now to shift national focus on exploration, mining, refining within Pakistan of strategic metals such as copper, gold, molybdenum and REMs before marketing abroad.
We lack wherewithal/technical skills for REMs development. However, Atomic Energy Commission/NESCOM can be directed to step forward and develop indigenous capability in collaboration with foreign experts within 1-2 years timeframe. Japan once indicated interest in 2010 through its Ministry of Foreign Affairs but the outcome is not publicly known.
The spread of REMs in the country is recognisable. Pegmatite rocks that cover much of Balochistan and other parts of Pakistan are easy to recognise as these differ in colour from other rocks. According to one geologist pegmatite rocks contain uranium and REMs, while some of them contain lithium as well. Finding REMs and distribution in other minerals is no more difficult, even though it is complex and expensive. For this geological data of desired metallic minerals and REMs should be meticulously updated through satellite and land based surveys, even by taking assistance fom friendly countries such as U.S., Russia, China and Japan. Laboratories of Geological Survey of Pakistan should be modernised in order to meet the challenging assignments.
Pakistan should review its mineral development policy. In this, precious metallic minerals such as copper, molybdenum, gold, lithium, silver, iron and all 17 categories of REMs should be placed under Atomic Energy Commission for exploration, mining, and refining before commercial sale. Constitutional amendment may be undertaken for placement of strategic metals under the federal government. We should learn from China and other countries where no mineral is allowed for export without refining and value addition.
National Security Council (NSC) should be assigned responsibility for overseeing complete range of activities with reference to commercial exploration/sales. Indigineous development may take time. Concurrently, countries willing to establish metallic and REMs refining plants in Pakistan and offering JV on attractive terms should be considered for quick economic dividends. A dedicated cell comprising few experts should be set up in the PM office for coordination and briefings to NSC on development activities. A serious pursuit of metallic minerals’ development and marketing chain will usher in a new era of prosperity and economic turnaround.

The writer is a retired Brigadier and has served in National Accountability Bureau and Prime Minister’s Inspection Commission, Islamabad.
Email: [email protected]


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