For building the country`s first ever local iron-ore steel mill at Chiniot, the planning work, including the financial model has been finalised and the government is ready for holding a road show for international and local investors.
This is revealed by Mines Secretary Dr Arshad Mahmood, who is also the head of the Punjab Mineral Company, which is carrying out the project. He said that the spadework for the mining, processing and (building) a steel mill complex at Chiniot has been completed and is ready for exposure to the world. He said the investors` biggest demand was sufficient supply of the raw material for at least 30 years for one million ton annual production capacity steel mill that would produce hot roll coil (HRC). While consultants have declared the available deposits in Chiniot are sufficient to provide the raw material to the (planned) steel mill for 33 years.
In the second phase of the project that started in January this year, a German consultant and Turkish contractor began inclined drilling of the site, which is the first of its kind in Pakistan. They have reported that the width of the existing deposits is more than what was anticipated earlier; rather it has extension in the north, promising availability of additional resource, he added.
According to the documents, the total proposed amount for mining, processing and steel production is around $1.2 billion. This includes $150 million for mining, $250 million for processing and the rest for the steel mill. The proposed investor internal rate of return is around 20 per cent.
Investors had already shown their interest in fully investing in the processing and steel manufacturing portions, he added.
Business development teams from China and the Middle East were expected to visit the site, see the work there, would interact with experts and meet the top government officials.
Chiniot is estimated to have a deposit base of 150 million (Canadian standard) tons of very good quality iron ore of top two trade worthy qualities in the world.
Even a sizeable amount is composed of shipment-grade iron ore.
There is presence of copper in various grades but this is basically iron ore deposit along with multiple other metallic minerals, including copper, silicone, silver and gold.
Mineral sector experts have declared this as IOCG (Iron Oxide Copper-Gold) type deposit where iron ore is found on large areas and is mixed with other minerals.
Pakistan consumes eight to nine million ton of steel annually. It produces four million ton locally but it is mainly steel re-rolling.
There is no iron-ore processing plant anywhere in the country. The Karachi Steel Mills would use imported iron ore. Though there are known iron ore reserves in Kalabagh, Chiniot and in Balochistan, there is no iron ore processing plant.
The iron ore processing plant would tap raw material not only from Chiniot, but also from the rest of the country, the secretary said.