Pakistan sits on a staggering $6 trillion worth of mineral assets, according to the last Geological Survey of Pakistan. To put that into perspective, the entire global mining and minerals industry is worth an estimated $2.12 trillion. Yet, Pakistan’s mineral sector contributes a mere 3.0% to its GDP, and its mineral exports account for only 0.1% of the world’s total exports. This stark contrast between potential and reality is a clarion call for urgent action and strategic reform.
The Trade Development Authority of Pakistan’s report reveals that Pakistan has mineral reserves covering a vast outcrop area of 600,000 square kilometres, with 92 identified minerals. The country boasts the world’s second-largest salt deposits, fifth-largest copper reserves, and second-largest coal deposits, along with billions of barrels of crude oil. Yet, these resources remain largely untapped, leaving Pakistan to beg for economic stability while sitting on a pot of gold.
One shining example of Pakistan’s potential is the Thar coalfield, which contributes 10% of the country’s total energy generation, cutting imports by $1 billion annually. Imagine the collective impact if the entire mineral sector were to be harnessed effectively. If industry is relocated to regions like Thar and provided with cheap, reliable electricity, it could solve the industry’s demand for competitive energy prices, boost competitiveness, and potentially result in additional exports worth $20 billion.
The international stage is littered with success stories of countries that have leveraged their mineral resources for economic prosperity. Chile, for instance, has become the world’s leading producer of copper, contributing around 28% of global copper output. Chile’s success is attributed to its mining-friendly policies, stable regulatory environment, and investments in basic infrastructure. Pakistan, with its vast copper reserves, could easily become the second-largest producer by realising its true potential.
Australia, the world’s largest producer of iron ore, ranks highly for coal and gold production. Its mining sector contributes well over 10% to the country’s GDP. Punjab’s Chiniot region alone has iron ore deposits valued at a minimum of $8 billion. Phase 1 of mining in this region is expected to last for about 40 years, with an initial investment of $1.27 billion required to set up the mining and steel processing mill. Punjab should be open to investors, welcoming investment in setting up the mining operation and HRC steel plant. Once established, it could serve 80% of the local demand through import substitution and leave 20% capacity for export.
China’s mastery of extracting and processing rare earth minerals is another lesson to be learned. These minerals are indispensable in the production of electronics, microchips, renewable energy technologies, and advanced weaponry. China’s dominance in this sector underscores the strategic importance of minerals in the global economy.
So, what is holding Pakistan back? The answer lies in two critical factors: intent and strategy. There has been a serious lack of general intent and will to develop this crucial sector. Moreover, the failure to incorporate modern machinery, techniques, and technology into the mining industry has been a significant impediment. Successive governments have failed to introduce regulations and legislation to make the sector open to private-sector stakeholders or invest in technology to create a value-adding supply chain for mined products.
During my tenure as the provincial minister, we uncovered 32.6 metric tonnes of gold deposits in the River Indus, particularly in the Attock district, verified by the Geological Survey of Pakistan. This discovery highlighted the vast potential that lies untapped. However, the industry remains focused on traditional mining practices, while the world has moved on to relying on collaborative partnerships and technology to explore and extract minerals.
To turn the tide, Pakistan must realign its focus from barely existing to making its mineral offerings globally competitive. This involves shifting to e-tendering to make the auction system transparent and breaking the regional monopolies of mining contractors. It also requires addressing corruption, recoveries, productivity, and the safety and welfare of mine workers. These steps are not just about boosting revenue but also about creating a sustainable and competitive mining sector.
The Ministry of Mines and Minerals under my leadership succeeded in achieving a 19% improvement in revenue collection, turning PUNJMIN into a profitable entity after years of inefficiencies. We also focused on the welfare of workers, bringing in reforms that halved the emergency response time, reduced accident fatalities, and increased compensation grants. These efforts boosted workers’ morale and commitment, demonstrating that with the right intent and strategy, Pakistan can achieve much.
Pakistan is at a crossroads. The time to get our act together and put the country on the road to progress is now. Our immense potential in the mines and minerals industry can help Pakistan diversify its economy, generate significant revenue, and
