Key Note Address: Mineral Policy Issues & Impact of 18 TH - - PowerPoint PPT Presentation

Azhar Khan Ex-Director General (Minerals) Ministry of Energy(Petroleum Division)

Key Note Address: Mineral Policy Issues & Impact of 18TH Amendment.

Presentation to Symposium: “Mineral Resources – The Most Neglected Sector” October 27, 2018

Karachi

• Mineral Resources
• Regulatory Framework
• Major Mineral Sector Projects
• Mineral Statistics
• Investment Opportunities
• Recommendations

Contents

Mineral Resources

4

• Energy:

Coal

• Metallic: Chromite, Copper (+Gold, Silver), Iron, Lead-Zinc ores
• Gemstones: Emerald, Ruby, Tourmaline, Topaz, Garnet.
• Industrial: Rock Salt, Limestone, Gypsum, Dolomite, Barite,

Bentonite, China Clay, Fireclay, Rock Phosphate, Silica Sand.

• Dimension Stones: Marble, Granite, Sand Stone.

Types of Mineral Resources

All minerals now being mined in the country have been explored / discovered by GEOLOGICAL SURVEY OF PAKISTAN

At present Pakistan is producing about 50 minerals while at the time of its independence this figure stood at 8

Minerals Resources

1. Antimony 2. Aragonite/Marble 3. Argillaceous Clay 4. Asbestos 5. Ball Clay 6. Baryte 7. Basalt 8. Bauxite 9. Bentonite 10. Beryl 11. Brine 12. Building Stone 13. Calcite 14. Celestite 15. Chalk 16. China Clay 17. Chromite 18. Coal 19. Dolomite 20. Emerald 21. Epidote 22. Feldspar 23. Fire Clay 24. Flint Stone 25. Fluorite 26. Garnet 27. Granite 28. Gypsum 29. Iron Ore 30. Laterite 31. Limestone 32. Magnesite 33. Manganese 34. Onyx Marble 35. Nepheline Syenite 36. Ochers 37. Phosphate 38. Pumice 39. Quartz 40. Red Oxide 41. Rock Salt 42. Ruby 43. Serpentine 44. Shale Clay 45. Silica Sand 46. Soap Stone 47. Sulphur 48. Tourmaline 49. Trona 50. Copper/Gold

Minerals under Exploitation

IS L AMAB AD

1 2 3 3 3 4 5 6 7 7 8 9 10 11

MKT MMT MB T

Chagai R askoh Magmatic Arc Indo P akistan S hield rocks of S argodha, K irana & Nagar P arkar S alt range & K ala-Chitta Hills G

• n

d w a n i c d

• m

a i n r

• c

k s

• f

H a r i p u r , S h e r w a n , A b b

• t

a b a d & T r i b a l a r e a s . K

• histan Magmatic Arc

K arakoram B lock Chaman- Ornach-Nal T ransform Fault zone L as bela- K huzdar, Muslim B agh, Zhob-Waziristan Ophiolites & Melange zone S ediment hosted L ead-Zinc- B arite- Flourite deposits. K irthar T hrus t & Fold B elt. S ulaiman T hrust & Fold B elt.

1 2 3 4 5 6 7 8 9 10 11

MKT Main K arakoram T hrust MMT Main Mantle T hrust MB T Main B

• undary T

hrust

METALLOGENIC ZONES OF PAKISTAN Metallogenic Zones

Turkey Iran Bulgaria Hungary Ukraine Romania Georgia Greece

Tethyan Belt - Major Copper-Gold Deposits

Chagai- R askoh Magmatic Arc

• n

• u

• r

Copper S aindak P

• rphyry Copper/Gold

R eko Dik Copper/ Gold R asK

• h Chromite

Chromite Chilghazi Iron ore Chickendik Iron ore Iron ore Nok K undi Dalbandin Naushki

 Extending from Yugoslavia – Turkey – Iran to Pakistan.

Chagai-Raskoh Magmatic Arc

• n

• u

• r

L asbela- K huzdar, Muslim B agh, Zhob-Waziristan Ophiolites & Melange zone

Muslim B agh Zhob-Waziristan

Copper Magnesite Manganese Chromite Haji Goth Copper Wad Chromite Jinno Copper Uthal Khuzdar Wana Miran S hah

 Producing high grade exportable Chromite.  Also bears dimension stones.

Lasbela – Khuzdar, Muslim Bagh, Waziristan Ophiolites & Melange Zone

• n

• u

• r

S ediment hosted L ead-Zinc- B arite- Flourite deposits. L ead- Zinc Copper Duddar P b-Zn S urmai Gunga Iron Ore Flourite B arite K alat Mastung L

• ralai

This zone extends from Uthal to Zhob.

Sedimentary Hosted Lead-Zinc – Barite – Fluorite Deposits

Gondwanic Domain Rocks

Indo Pakistan Shield Rocks

Kohistan Magmatic Arc

Karakoram Block

Metallic Minerals Potential

Mineral Reserve (Million Tons) Grade Chromite 2.53 Low to Medium Copper >6,000 Low to High Gold 1,656 metric tons Low Silver 618 metric tons Low Iron Ore 1,427 Low to High Lead-Zinc 24 Low to Medium

Overview of Coal Sector of Pakistan

• Pakistan’s coal potential estimated to exceed 186 billion tons,

more than known indigenous oil & gas reserves figures.

• Coal contributes around 8% in primary energy supply mix.
• Annual coal consumption (2016-17) was more than 11.00

million tons.

• Domestic coal production is about 4.2 million tons per annum,

which is mostly consumed in brick-kilns.

• Coal imports during 2016-17 figured around 7.00 million tons.

Coal Resources

Coal Resources Location

Coal Potential

Province Resources Estimate

(Million Tons)

Sindh 185,457 Balochistan 217 Punjab 235 Khyber – Pakhtunkhwa 90 AJK 9 Total: 186,008 Coal Quality: Lignite to Bituminous Heating Value: 5,200 -15,500 BTU/lb. Thar Coal resources have the capacity to support 100,000 MW electricity generation for centuries.

Gemstone Occurrences

Gemstones Potential

Gemstone Reserves (Million Carats) Emerald 70 Pink Topaz 9 Peridot 10 Ruby 452 Aquamarine 0.20

Industrial Minerals & Dimsion Stones

Mineral Reserve (Million Tons) Grade Barite 14 Medium to High Fireclay > 100 Medium to High Fuller’s Earth Fairly Large Medium to High Granite 4,140 Medium to High Gypsum 4,850 Medium to High Limestone Very Large High Magnesite 12 Medium to High Marble Very Large High Phosphate 7 Low to Medium Red Oxide 100 Low to Medium Rock Salt >5,000 High Silica Sand 557 Medium to High

National Mineral Policy-Regulatory Framework

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• Minerals

are provincial subject under the constitution, except oil and nuclear minerals and those occurring in special areas (GB & ICT).

• Provincial

Governments are responsible for development and exploitation of minerals which fall in their domain as it is not included in Federal Legislative List – 4th schedule.

• 18th amendment in Constitution has not changed its

status.

• Legislative and executive authority of mineral rest

with the provinces.

National Mineral Policy-Regulatory Framework

Constitutional Apportionment

Federal:

• Regulation of nuclear minerals and those occurring in federally

controlled areas, Islamabad Capital Territory (ICT) and International Offshore Water Territory.

• Geological surveys.
• National policies formulation, facilitation and coordination at

national and international levels.

Federating Units:

• Regulation of mineral sector.
• Mineral exploration and development.
• Safety of exploration and mining operations.

Note:

There is no change in above jurisdiction w.r.t. 18th Amendment and the Provinces will continue to independently work in their areas.

Constitutional Apportionment

Federal:

• Regulation of nuclear minerals and those occurring in federally

controlled areas, Islamabad Capital Territory (ICT) and International Offshore Water Territory.

• Geological surveys.
• National policies formulation, facilitation and coordination at

national and international levels.

Federating Units:

• Regulation of mineral sector.
• Mineral exploration and development.
• Safety of exploration and mining operations.

Note:

There is no change in above jurisdiction w.r.t. 18th Amendment and the Provinces will continue to independently work in their areas.

Constitutional Apportionment

Federal:

• Regulation of nuclear minerals and those occurring in federally

controlled areas, Islamabad Capital Territory (ICT) and International Offshore Water Territory.

• Geological surveys.
• National policies formulation, facilitation and coordination at

national and international levels.

Federating Units:

• Regulation of mineral sector.
• Mineral exploration and development.
• Safety of exploration and mining operations.

Note:

There is no change in above jurisdiction w.r.t. 18th Amendment and the Provinces will continue to independently work in their areas.

Mineral Ownership

Federal Government:

Radioactive Minerals ICT & Intl. Offshore Formulation of National Policy Geological Survey & Mapping Oil & Gas Regulation International Coordination

Provincial Government:

• Detailed Exploration;
• Mineral Development/Production;
• Regulation of Mineral Titles; and
• Health & Safety in Mines

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Federal Areas

Mineral Sector Regulatory Setup

National Mineral Policy

• First National Mineral Policy (NMP) formulated in 1995 with consensus of

federating units.

• Its implementation played a vital role in:

 discovery of world-class mineral deposits (Copper, Gold, Coal, Gemstones,

Dimension stones)

 attracting investment of about US$ 1.0 billion.  increasing revenues by manifolds and employment opportunity.

• Pakistan has huge mineral potential which is yet to be fully explored. It

was therefore, necessary to review the policy to make it internationally competitive and to address challenges of large-scale mining for attracting foreign investment.

• NMP 2013 was prepared in consultation with Commonwealth Secretariat,

U.K., federating units and other stakeholders and launched in February 2013 after approval by CCI.

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• Enhance contribution of the mineral sector to GDP.
• Create

investment-friendly environment and enhance international competitiveness.

• Speed up mineral exploration & exploitation.
• Compliance with international reporting standards for mineral

resource evaluation;

• Mitigate environmental impact.
• Promote CSR culture.
• Encourage local value-addition/beneficiation of minerals.
• Mineral agreements as per international standards.
• Development of national & provincial cadastre and Mineral

Development Plan.

• Ensure safety and security of investors and operations.
• Mass-scale employment generation and skill development.
• Capacity building of federal and provincial institutions.

Focus of National Mineral Policy (2013)

• Prospecting,

exploration and extraction

• f

minerals allowed under valid mineral title (licence/lease) only.

• Grant of mineral title is governed under Regulation of

Mines & Oil-fields and Mineral Development (Government Control) Act, 1948 and rules framed thereunder. Reconnaissance/Prospecting/Exploration Licence:

• a. Mode of grant: Principle of first-come-first-served subject to fulfilment of

approved technical and financial criteria. In some cases, competitive bidding for grant of licence. b.

• Max. Tenure: 5 years.

c. Investment: Licensee incurs all expenditure on prospecting and exploration works, infrastructure, deployment of machinery, etc.

• d. Government Revenue: Fee, annual rent, royalty, taxes, excise duty etc.

Procedure for Grant of Mineral Titles

Mining Lease:

• a. Mode of grant: i)

Auction in case of proved minerals ii) Conversion of licences

• a. Max. Tenure: 30 years, renewable.
• b. Investment: Lessee incurs all expenditure on development works

including mine design, provision of infrastructure, installation of mines and plants and procurement of requisite machinery etc.

• c. Government Revenue: Fee, annual rent, bid money, royalty, taxes,

excise duty and other levies.

• Payment of surface rent and compensation to land-owner.
• No sale/purchase transaction of mineral reserves at any stage

during grant of mining concessions.

• State remains owner of mineral reserves all along and gets royalty

in consideration/lieu of ownership rights.

Procedure for Grant of Mineral Titles (Contd.)

Major Mineral Sector Projects

• Both public and private sector organizations including

foreign entrepreneurs are working for mineral exploration, development and mining.

• Geological Survey of Pakistan carries out resource mapping

and mineral investigations on regular basis.

• Mineral sector is dominated by small-scale operations.
• Mining sector showed growth of over 10% during 2017-18.
• More than 7,000 operative mines.
• Employment around 300,000 workers.

Mineral Sector-Salient Features

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1. Saindak Copper-Gold Project (Chagai – Balochistan): [Producing blister copper] 2. Duddar Lead-Zinc Project (Lasbela – Balochistan) [Producing concentrates of Lead & Zinc] 3. Chiniot-Rajoa Iron Ore Exploration (Punjab) 4. Sino-Sindh Resources (Thar Coal Block-I) [Sindh] 5. Sindh-Engro Coal Mining (Thar Coal Block-II) 6. Asia Power Group Limited (Thar Coal Block-III) 7. Oracle Coalfields PLC UK (Thar Coal Block-VI) 8. Barite Mining & Processing Project (Khuzdar District) 9. Rock Salt Mining

• 10. Several cement manufacturing units around the country.
• 11. Marble & Granite Quarrying
• 12. Chromite Mining

Major Mineral Projects

Mineral Statistics

• Sr. No.

Name of Mineral Annual Production (2012-17)

1 Barite 92 – 158 2 Chromite 70 – 136 3 Coal 3,000 – 4,000 4 Copper Blister 10 – 18 5 Dolomite 223 – 667 6 Gypsum 1,200 – 2,100 7 Limestone (for cement) 36,500 – 52,200 8 Marble 2,400 – 4,900 9 Phosphate 62 – 130 10 Rock Salt 2,200 – 3,600 11 Silica Sand 261 – 400 12 Soap Stone 72 – 152

Mineral Production

,000 metric tons

Sr. No. Name of Mineral Quantity (Metric Tons) Destination Countries 1 Chromium Ores & Conc. 589,000 China, Japan, India 2 Gypsum 115,000 India 3 Marble [Crude/Cut] 204,000 China, Afghanistan, U.A.E., Italy , Saudi Arabia 4 Onyx (Marbles) 1,976,000 USA, UAE, China, Hong Kong, Japan, Oman, Germany, Russia 5 Rock Salt 209,000 USA, Afghanistan, India, China, UK, Germany 6 Sand Stone 8,900 China, UAE, South Korea, Bahrain 7 Silica/Quartz Sands 31,600 China 8 Talc 101,000 Italy, The Netherlands, South Korea, Saudi Arabia, Japan, USA

Mineral Exports (2016-17)

Sr. No. Name of Mineral Quantity (Metric Tons) Source Countries 1 Bentonite 4,600 India, Australia, USA, China, Turkey, Thailand 2 Chalk 4,800 France, Belgium 3 Coal 7,020,000 South Africa, Indonesia, Afghanistan, Russian Federation 4 Coke of Coal 116,000 Poland, Italy, China, India, Czech Republic 5 Granite 4,160 Norway, India, China, Finland, Brazil 6 Graphite 2,570 China, Sri Lanka, 7 Kaolin 28,100 USA, China, UK, Malaysia 8 Talc 368,000 Afghanistan, China, Albania

Mineral Imports (2016-17)

Investment Opportunities

• Huge Coal resources [Thar, Sonda-Jerruk, Lakhra, etc.]
• High grade resources of Marble & Granite [Khyber-

Pakhtunkhwa [KP] & Balochistan].

• In-exhaustible deposit of Rock Salt

[Salt Range Punjab & Jatta –Bahadar Khel, KP].

• Substantial precious and semi-precious stone deposits

[Aquamarine, Emerald, Garnet, Peridot, Ruby, Topaz & Tourmaline in KP, GB & AJK].

• Large metallic mineral deposits [Copper, Chromite & Lead-

Zinc in Balochistan, iron ore in Punjab & Balochistan].

Large Mineral Potential

• Investment friendly fiscal and regulatory regimes.
• Low taxes and costs.
• Qualified human resource and labour force available

at cheaper cost.

• Good infrastructure.
• Excellent strategic position and market access
• Protection
• f

Foreign Investment under acts

• f

Parliament

Why to invest in Mineral Sector

Bottlenecks in development of Mineral Sector

Thank You