ISLAMABAD – The government is considering inviting foreign investors to establish steel mills to take benefit from the iron ore reserves of 350 million tonnes at Kalabagh, 110 million tonnes at Chiniot, Punjab and 200 million tonnes at Dilband, Kalat, Balochistan.
According to official sources, the proposal is under consideration as the demand for steel products is estimated to increase to 14 million tonnes against a supply of 10 million tonnes by 2015. At present four major sectors of local steel industry, Pakistan Steel Mills (PSM), re-rollers, re-melters and ship breakers produce long products of four million tonnes and flat products of 1.1 million tonnes, as against the demand of more than six million tonnes per annum.
PSM has a capacity of 1.1 million tonnes. It has iron ore requirements of 2 million tonnes per annum and the bulk is imported. The country’s large iron ore reserves are still lying unutilised. PSM intends to increase utilisation of local iron ore reserves by 30 percent in its blend.
There are two large iron ore reserves in Punjab. The 350 million tonnes reserve of Chichali, Kalabagh is low-grade surface deposit iron ore whereas the 110 million tonnes Chiniot reserve is high-grade iron ore under alluvial cover. PSM and Al Tawarqi Steel Mills could be the potential buyers of the high-grade Chiniot iron ore. The local steel sector too had shown to invest in modifying their furnaces to utilise the Chiniot iron ore, together with a proportion of scrap, instead of pure scrap at present.
Kalabagh, sources said is an ideal site for the establishment of a steel mill as necessary raw material like iron ore, coal, dolomite is abundantly available, and abundant water is also available as river Indus passes nearby. Kalabagh has iron ore reserves of 350 million tonnes with iron content of 32-40 percent. German company Salzgitter successfully manufactured iron from Kalabagh ore in 1966.
Kalabagh ore would require a two stage process; firstly beneficiation, enrichment of iron ore and secondly smelting in a blast furnace.
The extraction and utilisation of silica would be another by product. This roadmap envisages an onsite mouth of mine beneficiation plant. It will produce beneficiated iron ore for use in an integrated steel mill of 1.5 million tonne capacity. The area is already well connected with roads and railways. Power supply from Tarbela is available while a 200 MW coal power plant could be established to utilise indigenous coal resources.
In Balochistan, there are a number of iron ore mines and the raw material is of reasonably good quality.
The biggest reserve of the province is located in Dilband, Kalat district having an estimated 200 million reserves with 30-35 percent iron.
The Chaghi district has four iron ore deposits at Pachinkow containing an estimated 45 million tonnes, with iron content of 35-48 percent, Chilghazi 23 million tonnes with 10-55 percent iron, Amir Chah 12 million tonnes reserve with 50-60 percent iron and Chigendik 5 million tonnes with 20-60 percent iron.
