IRP of Mr. Saeed Jamali

8/8/2019 IRP of Mr. Saeed Jamali

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ACKNOWLEDGEMENT

I feel great pleasure to acknowledge the guidance provided by Mr. Imran

Ali the Directing Staff of NIM Quetta without which I was unable to completethis research.

I further extend my acknowledgements and thanks to Mr. Riaz Khan D.G.

Mines and Minerals for his cooperation.

( Dr. Muhammad Saeed Jamali )06th May, 2008



DEDICATIONS

TO MY PARENTS WITH LOVE



ABSTRACT

Balochistan is blessed with plenty of Mineral Resources but unfortunately these

mineral resources have not been exploited to its full extent. This study will examine the

role of mineral based industry in economic development of Balochistan.

The objective of this study is to suggest some recommendations which can be

useful to improve the industrial base of mining sector, so that to gain maximum economic

benefits from the mineral potential of Balochistan.

In order to conduct this research extensive secondary and primary data will be

collected. The secondary data will be collected from the Mines and Minerals Department

Government of Balochistan, Geological Survey of Pakistan, Annual reports of UNDP and

ADB etc, whereas the primary data will be collected through personally administered

close ended interviews and questionnaire. I would like to interview various stake holders

of Mines & Minerals and Industry Department as well as Mine Owners, Members of

Chamber of Commerce and Government Officials.

The result of this study will be useful for the Government Departments, MineOwners and prospective Investors for the development of mineral based industry in

Balochistan, further this study will also provide reference of literature for the future

researchers of this topic.



TABLE OF CONTENT

i) Acknowledgement

ii) Dedication

iii) Abstract

iv) Table of Contents

Chapter One

1.1 Objective of Study 01

1.2 Scope of Study 01

1.3 Research Methodology 01

1.4 Introduction 02

Chapter Two Mineral Resources of Balochistan

2.1 Metallic Minerals of Balochistan 08

2.2 Non-Metallic Minerals of Balochistan 11

2.3 Fossil Fuel Resources 13

2.4 Precious Jims/Stones 15

Chapter Three Stake Holders in Mineral Development of Balochistan

3.1 Role of Federal Government 16

3.1.1 Ministry of Industries & Production (GoP) 16

3.1.2 Geological Survey of Pakistan 18

3.1.3 Pakistan Mineral Development Corporation 21

3.1.4 National Mineral Policy-1995 23

3.2 Role of Provincial Government 29

3.2.1 Department of Mines & Mineral (GoB) 29

3.2.2 Directorate General (Mines & Mineral) 29

3.2.3 Balochistan Development Authority 31

3.3 Foreign Investment 32

3.4 Private Sector Investment 33





CHAPTER ONE

1.1 Objective of Study

The objective of this study is to analyze the potential of mineral based industry in

Balochistan, its impact on the economy of Balochistan as well as allied socio-

economic benefit. This study will provide useful recommendations for the

betterment of mineral based industry in Balochistan.

1.2 Scope of Study

This study will cover the analysis of existing mineral based industry in

Balochistan, its problems and solution to the problems. This study will also

highlight the potentials of mineral based industry in Balochistan and will

formulate strategies by which these mineral potentials can be tapped in order to

accrue maximum economic and social befits. This study will also provide the data

regarding existing mineral-based industry in Balochistan.

1.3 Research Methodology

In pursuit of aims of study of the main theme, books available in the library,

material obtained from Department of Mines and Mineral and articles available

on various websites have been consulted in drafting of this term paper. Various

divergent opinions have been reflected and referred to in this term paper to

present multi-dimensional approaches of this theme.



1.4 INTRODUCTION

Minerals are believed to be the significant wealth of Balochistan. However this

resource has not been fully exploited. It contributes only about 3% of the GDP and

employs a small percentage of labor force. The total value annual production of minerals

is Rs 3.4 billion out of which 3.1 billion comes from natural gas alone. This sector has

remained under developed because of inadequate resources provided for detailed survey

of the potential, lack of physical infrastructure and insecurity to the private sector.

Minerals a natural resource of a country require multiphase costly exploration programs.

Mining Industry is a complex, complicated, heterogeneous, require long gestation period,

risky and capital intensive. Hence every effort should be made to strengthen this

important industry.

Balochistan has geologic setting favorable for exploration, evaluation and

utilization of varied type of mineral deposits. It has many showings/prospects of copper

porphyry deposits in Chagai area. Besides Saindak copper/gold deposit which is being

developed by Saindak Metals (Pvt.) Limited, presently operated by Chinese (MRDL) &

Riko-Diq (explored & evaluated by Australian firm TCC), about 30 porphyry type

copper/gold prospects have been identified in Chagai District. Among these Koh-i-Dalil,Dasht-e-kain, Mashkichah, Tallarak, Kabulkel, etc. have been explored to some extent.

Beside copper/gold deposits, Chagai Island arc is also favourable for hosting iron, lead,

zinc, sulpher and dimensional stones etc.

In the Lasbela-Khuzdar districts lead, zinc, barite deposits have been found in

shelf carbonates at various .localities like Duddar, Gunga, Surmai, Shekran and

Mithidhoro.' Detailed investigations on Duddar deposits were initially carried out by the

Geological Survey of Pakistan (GSP). The detailed drilling has been done by Pakistan

Mineral Development Corporation (PMDC) with the collaboration of United Nation

Development Progrmnme (UNDP) during 1988-90. Now the deposit is being

investigated! evaluated by Chinese firm MRDL. The carbonate shelf also contains

fluorite deposits in Dilband, area, which is being mined by the Balochistan Development



Authority (BDA). Larger deposits of Dilband iron ore have recently been discovered (200

million tones) and have been found suitable for mixing/production of pig iron by Pakistan

Steel Mill. Barite deposits being mined from this carbonate belt meets almost the total

requirement of the I country and has a large export potential if market can be found, and

price be rationalized. Onyx marble is mined in Chagai and is contributing foreign

exchange to the exchequer.

Gypsum/anhydrite and limestone (very large resource) are also mined at different

localities as per local demand. Five coal fields namely; (i) Khost - Shahrig - Hamai, (ii)

Sor Range - Degari, (iii) Duki, (iv) Mach, and (v) Pir Ismail Ziarat - Chamalang, have a

total reserves of about 200 Million tons.

Mining is seen as hostile to environment. To strike a balance between

environment and mineral development it is necessary that environment awareness be

generated either in a participative manner or by special clauses entered in the lease

agreements. Mineral waste disposal and green area development strategy max. be chalked

out for mineral concession holders. Similarly adequate welfare facilities depending on the

requirement of the area may be provided to the mining workers. Provision of basic

necessities, and clean living conditions at mining sites improve the efficiency of workers.

Looking at the availability of minerals in the province, there is a tremendous

scope for setting up of new mineral based industries. Balochistan is rich in minerals and

is a leading producer of several minerals. A sound base for setting up mineral based

industries, therefore, exists in the province. 95 % of the Industry is at Lasbela Industrial

Estate. 250-300 industrial units have been established here, but 60% have been closed

down due to incentive withdrawal by the Government around 4 years ago. Presently

again a revival is in sight due to construction of coastal highway and northern bypass of

Karachi. The proximity of Karachi was the basic factor in the development of this

industrial area of Balochistan. Recently the Government of Balochistan has declared

Gadani as Marble city, and has earmarked 100 acres of land for this purpose. There is a

dire need that industries be established near the resource centres. Only in this way mining





Inspectorate of Mine and minerals is also active in establishment of mine training

schools. The Governor of Balochistan is taking personal interest in establishing all these

institutes, besides he is keen for an early establishment of Mining Engineering discipline

of international standards in the province at IT University, Quetta & Khuzdar

Engineering College. It is hoped that after the establishment of such institutes shortage of

local technical manpower can be arrested. The above projects will help in production of

value added products, based on natural endowments of the area, leading to. increased

revenue generation, as well as increase exports potential will help foreign exchange

genet1atio'n. This will help the investors attraction for the establishment of micro mineral

based industries, which in turn support the local community in sustainable livelihood by

creating the economic activity and employment generation.

Planning plays a pivotal role in the development, and hence the provincial

Planning department may be strengthened with technical manpower with mining, media,

business administration and environment specialist. There is a dire need to strengthen and

properly train the planning and exploration wing of Provincial Mines and Mineral

Department officers and staff. Similarly the Mineral allotment committee may be

expanded and have at least 6 members from the Balochistan Mine Owners association,

selected on rotational basis, so that a continuity of policies and private partnership in

Government policies is assured. High rate of taxes/ tariff have eroded the commercial

viabilities of the minerals for the domestic and global market. Sale Tax as a whole is one

of the sore point which has suppressed the tendency of honest reporting of mineral

production. MIFB & MIFA, may be made active to boost the mineral sector. Consortium

of private, public sector or association culture in mining should be encouraged for large

scale mining due to very high cost of mining machinery and equipments. Solar salt has a

good scope in the coastal areas of the province. Fine grained, medium to high purity

limestone suitable for the. manufacture of lime may be identified through geo-scientific

technologies, and a chain of energy efficient lime kilns be placed in the resource area. If

possible mini cement plants (2-5 TPD) may be installed in the province. Launching of

Solar salt, lime kilns, stone carving centres and dimensional stone cutting machines

chains can help in poverty reduction and can generate self employment in rural





Chapter Two

Mineral Resources of Balochistan

"Rich in natural resources yet poor in material terms, Balochistan today is a province at

the crossroads. With its wealth of biodiversity and vast reserves of natural gas, petroleum

and minerals, Balochistan has immense potential as a future success story. The province

of Balochistan has been generously gifted with natural resources (See mineral map of the

province below). Vast mountainous ranges extending throughout Balochistan show

mineralization of varied nature and extent. Some of these mineral deposits have a

historical importance like Muslim Bagh chromite and Sanni sulphur deposits.



Major mineral deposits can be broadly classified in three categories. Metallic Minerals,

Non-Metallic Minerals and Dimension Stones. These deposits have been explained in the

succeeding paragraphs.

2.1 METALLIC MINERALS.

Chromite

Occurrence Qila Saifullah, Khuzdar,Chagai And Kharan Districts

Quality Medium to High Grade

Utilization - Steel making- Refectory bricks

- Chemicals

Beneficiation Plant To upgrade from low (30%) to high grade (50))% Chromite



Production for the last three years

Year 2003-04 2004-05 2005-06

Production 27362 53310 34025in tonnes

IRON ORE

Deposit Reserves in million tones Grade.

Pachinkoh (Chagai) 45 35 - 48%

Chigenkik (Chagai) 05 20-60%

Chilghazi (Chagai) 23 10-40%

Dilband (Mastung) 200 35-40%

273

- Import of iron are by Pakistan Steel 2 million tones

per year

- Importing from Mauritania,Australia & India

- Price Approx: US$

25/- per ton

Copper / Gold Saindak Project.

Ore bodyReserves million tonnes. Grade.

South 111 0.44% Cu

North 28 0.44% Cu

East 2730.34% Cu

Total 412 0.34% Cu









Geologically Ghazij Shales of Eocene age having good quality of coal are

spreaded over 75 Km in Chamalong Coalfield area. A dispute over the coal

bearing areas of Chamalong (District Loralai) has been settled amicably between

Luni and Marri tribes. The mining activities in the area have now been resumed

after a long period of 34 years.

2.3 Fossil Fuel Resources (Coal)

Coal in Balochistan is found in 5 coal fields namely; (i) Khost - Shahrig - Harnai,

(ii) Sor Range - Degari, (iii) Duki, (iv) Mach, and (v) Pir Ismail Ziarat - Chamalang.

Total estimated reserves of all the coal fields are 200 million tons (Table 5).

Table 5. Coal reserves in Balochistan.

Reserves (million tons)

Coal Field Proved Indicated Inferd Total

Khost - Shahrig – Harnai 13 --- 63 76

Sor Range – Degari 15---

19 34

Duki 14 11 26 51

Mach 9 --- 14 23

Pir Ismail Ziarat - 1.5 1.5 8 11

Chamalang 1.0 -- 5 6

.

Total := 53.5 12.5 135 201

Coal mining in Balochistan started on small scale before independence in Khost -Harnai area and is increasing with time. Coal is extracted by underground mining

method. The mines in Balochistan, are quite steep (30° to 70°) hence; Long Wall

Advance Mining Method is partially employed. Internationally Longwall mining is a

highly productive underground mining method in which a panel or block of coal

18













v) execute mutually agreed collaborative projects with private sector and

provincial governments as approved by MIFA, on a cost reimbursable

sharing basis,

vi) assist the provinces in generation of geological data.

The headquarters of the GSP have been located in Quetta (Balochistan) since

colonial times. Its provincial offices are operational in Islamabad, Karachi, Lahore and

Peshawar. It also has a field office at Muzaffarabad. Additionally a geo-sciences research

center is located in Islamabad. It is staffed by 205 technical professionals (140 geologists,

19 geophysicists, 25 drillers and 21 chemists) and by 56 administrative and support

personnel.

The headquarters and research center are well equipped and maintained. The staff

of the GSP is efficient and knowledgeable in modern techniques of earth’s sciences. Its

output appears reasonable and proportionally related to existing activities, although

perhaps it might be on the low side if considering that geological mapping so far covers

only 33% of the national territory.

The facilities of the research center are particularly impressive. It was established

in 1991 with assistance from JICA. It is fully equipped on the basis of most modern

technologies. Its equipment is well maintained, with nearly all component s fully

operational. Additionally, its libraries are updated with recent publications, including

subscriptions to main relevant scientific journals. The scientific and technical production

of this research center is notable, exceeding comparative international levels of

publications for similar research establishments. However, its facilities are also clearly

underutilized, and core staff scientists are progressively moving to other higher paying

jobs in the private sector.

On the other hand, despite its good capacity and facilities, the existing setup of the

GSP does not fully reflect the priorities for mineral sector development in Pakistan.

Additionally, its existing headquarters location does not facilitate coordination with the

Federal Mining Administration, and provincial offices and agencies. It also hinders

24



internal coordination and synergies with the research center. Moreover, its remote

location has affected recruitment of professionals and is resulting in progressive turnover.

The role of GSP under the new National Mineral Policy is receiving careful

examination. In line with its updated mandate GSP is focusing on executing a series of

activities, which would require further institutional strengthening principally for regional

geology work, research related to gemstones, provision of extension services,

development/ operation of information systems, and cross-sectoral geological services.

Such activities would aim at the publication of data and maps, completion of regional

maps, establishment of open data-file system for private investors, development of

partnerships with provinces and private investors and establishment of a national geo-

data center.

Potential

Existing geological anomalies under varying stages of investigation by Geological

Survey of Pakistan and the state owned Regional Development Corporations are

economically interesting and comprise among others, the Duddar zinc-lead deposit, the

Saindak copper-gold deposit, Punfmin iron ore deposit, the AKMIDC poly- metallic

deposit and the private sector porphyry copper/gold prospects at Tethan Copper and Reko

Diq. Based on the experience of other countries with similar geological endowment, it is

estimated, that under reasonable assumptions these could be turned to account and

generate significant growth and local economic development. Even if these occurrences

represent 25% of the country’s potential, the mineral sector with sufficient capital and a

favorable investment climate has the capacity to contribute annual revenues and foreign

exchange in the range of $1.5-2.0 billion or 2-3 % of GDP, stimulate secondary and

tertiary economic activity, promote growth and provide employment and community

development in largely remote regions of the country. In addition to the above mentioned

base- metal/gold potential, the Thar-lignite deposits should be mentioned. These deposits

contain very large reserves of lignite, which are considered of adequate quality on the

basis of existing studies. However, it is not known/established whether this deposits can

be developed in a technically and economically viable way. This uncertainty is the result

25





Geoscientist Manpower

Mining

1. General Manager 1

2. Dy. General Manager 6

3. Manager 4

4. Dy. Manager 5

5. Asstt. Manager 5

Geology

1. Dy. General Manager 4

2. Manager 4

The Corporation has the following administrative set up;

1. Central Secretariat

2. Coal Division

3. Salt Division

4. Marketing Division

5. Finance & Accounts Division

6. Audit Section

7. Planning & Development Division

8. Lahore & Quetta Branch Office

PMDC has the following subsidiaries/Joint Ventures etc.

1. Lakhra Coal Development Company, a joint venture of PMDC, WAPDA

and Government of Sindh.

2. Sarhad Minerals Ltd. A joint venture of PMDC and SDA

27



3. Orakzai Coal Mining Project, a joint venture of PMDC and Governor's

Secretariat (FATA)

4. Kurram Soapstone Mining Project, a joint venture of PMDC and Governor's

Secretariat (FATA)

Mining Machinery & Equipment

1. Electric/diesel driven compressors

2. Pneumatic picks along with their all accessories

3. Diesel! battery locomotives

4. Electric/ diesel driven haulages

5. Mining pumps and fans

6. Mining Tubs and Skips

7. Diesel generators

8. Workshop machinery & equipment (lathe machine, drill machines &

shapers etc.)

9. Safety & rescue appliances including ambulances

10. Mine safety lamps

11. Front end loaders & trucks

3.1.4 NATIONAL MINERAL POLICY - 1995

The formulation of a National Mineral Policy required a clear apprehension of

demands of the industry on one hand and the desire of the Provincial Governments,

which constitutionally owns the national resources including the minerals, on the other.

An International Conference on Mining was arranged in Pakistan in October 1994. Senior

executives from International mining companies and Federal and Provincial governmentsattended the Conference. Following this a broad-base\j Task Force was setup to prepare

recommendations keeping in view the concerns of the industry, the governments and the

prevailing international practices. These recommendations were debated at a Workshop

attended by representatives of the Federal and Provincial government agencies concerned

with the Implementation. The modified draft recommendations were further reviewed by

28





approved. Membership of the MIFA was to comprise the Minister for Mineral

Development (Vice-Chairperson) with Chief Secretary / Additional Chief Secretary

(Development), Secretary Mineral Development, Secretary Finance, Secretary Works,

Secretary Forest, Chairperson of the Provincial Mineral Development Corporation,

representative of Environmental Protection Agency c:tnd two representatives from

Business Community as nominated by Chief Minister Department of Mineral

Development to serve as Secretariat of the MIFA.

Each MIFA was to execute regular monitoring of mineral related activities of

public and private sectors and conduct periodic review of implementation of the new

regulatory regime and functioning of the administrative set-up in the province. The

Authority would review progress of approvals from the relevant agencies on grant and

working of concessions and. other related development. It would also introduce measures

to promote use of local goods and services, create opportunities for appropriate education

and training of Pakistanis in modern mining skills, and would perform as appellate forum

for resolution of disputes of specified nature between Licensing Authority and the

investors. Arranging and approving mineral portfolios for attracting private investments

and ensuring adequate protection of the environment would also fall within the

responsibilities of {he Authority. In addition the Authority would also reform any other

function assigned by the Chief Minister (Federal minister In charge in case of Special

Areas), etc. The MIFA may request, if considered necessary, for the participation or

assistance of the federal government in negotiation of mineral agreements by the

provincial government with foreign investors.

A political consultative forum with the title of Mineral Investment Facilitation

Board (MIFB) under the Chairpersonship of the Prime Minister and the vice-

chairpersonship of the federal minister for Petroleum and Natural Resources was also

approved. The members of the board were to .be Governor NWFP, Chief Ministers

Punjab, Sindh, NWFP, Balochistan, Federal Minister for Finance, Federal Minister of the

Special Areas, Chairman Board of Investment and the Deputy Chairman, Planning

Commission. The Ministry of Petroleum and Natural Resources was to serve as the

Secretariat of the MIFB. The scope of MIFB was to advise the authorities concerned for

30





* provide competent interface with teams of international investors;* generate own geodata, carry out geological mapping, and identify mineral

prospects with or without assistance of the Geological Survey of Pakistan(GSP) and donor agencies for exploration promotion;

* compile, evaluate and disseminate geodata and make geological andgeographical maps;* provide advisory services to the mining industry;* exchange critical geodata from the Geo-data Centre of Pakistan;* perform any other function assigned by the Chief Minister; and* not be involved in mining activity itself.

The Public Sector Mineral Corporations presently existing at the federal and

provincial levels, with a pool of technical skills and equipment are to be finally

privatised. However, as long they exist the skilled manpower and the equipment shall be

utilised for promotional activity on the promising areas with express purpose of attracting

private investments in mineral exploration and development.

The Geological Survey; of Pakistan (GSP) will be strengthened as central

organisation for geological, geophysical and geochemical mapping, geodata generation

and research. It will concentrate on the following functions:

* expedite publication of geological, geophysical and geochemical data andmaps already available;

* produce 1 :250,000 scale geological maps of the whole country and 1 :50,000 scale maps, supported by reports, for the whole countrycommencing with priority areas as identified by the provinces;

* operate open-file system so that unpublished data is available to theinvestors;

* undertake fast track integrated geological, geophysical, eochemical, andtectonic surveys, generate and disseminate basic data on prospective areasas per priorities determined by the MIFA. Mineral exploration would beminimal activity of the GSP and only to support its regional surveys;

* execute mutually agreed collaborative projects with private sectors andProvincial Government as approved by the MIFA on cost reimbursable or sharing basis; and

* help the provinces in generation of geological data.

The Geo-Data Centre of Pakistan (GDSP) be established as an autonomous body

of the Ministry of Petroleum and Natural Resources with active support of donors and of

the Federal Government. It will be governed by a broad based council, headed by

32





3.2 Role of Provincial Government

3.2.1 Department of Mines & Minerals.

Attached Departments:

1. Directorate General of Mines and Minerals.

2. Inspectorate of Mines.3. Commissionerate of Mines Labour Welfare.

3.3.2 Directorate of General. Mines & Minerals. Balochistan. Quetta.

General Introduction:

Balochistan, area wise is the largest province of the country, constituting about

42% of the total National Land Mass and has been endowed by nature with blessings of

substantial mineral wealth which need to be explored and developed in true spirit.

Exploration activities are being in process with the collaboration of foreign investors.

The Government of Balochistan has implemented the National Mineral Policy

which provides appropriate institutional arrangements, a modem regulatory frame work,

an equitable and internationally competitive fiscal regime and Programme to expand

Mineral data base.

Functions of the Department:

The main functions of the Directorate General are:

.Grant of Concessions and Mineral Titles.

.Regulation of Balochistan Mineral Rules 2002.

Collection of royalty and rent and resolving the boundary disputes.

Technical assistance / Advices to the Mines owners for scientific exploration /

exploitation of Minerals.

34



Development Projects. Exploration of Minerals.

Co-ordination and Technical Assistance to the Oil Companies involved in the

Exploration of Oil & Gas in the province. The following branches are discharging the

above functions:

1. Administration/Establishment Branch.

2. Oil & Gas Cell.

3. Concession Branch (Coal).

4. Concession Branch (OM & Marbles)

5. Coordination & Development Branch.

6. Exploration Promotion Division.7. Survey & Drawing Branch.

8. Rent & Royalty Branch.

9. Statistical Branch.

10. Minor Minerals Branch.

11. Marble Branch.

Government of Balochistan has notified the following Rules for the Department:

1. Balochistan Mineral Rules (2002) enforced w.e.f 8-3-2002.

Balochistan Marble and Coal (Permit/Rahdaries Rules 1978 and Balochistan Minor

Mineral Concession Rules 2000 enforced w.e.f2.5.2000.

3. Achievements / Activities by the Department:

The Directorate General Mines and Minerals has so far granted 1101 concessions of various minerals to different private /public sector

35







3.4 Private Sector Investment - Mining Companies

• M. /s. Saindak Metals Limited, who are running Saindak copper-gold project in

Chagai district. M/s. Broken Hill Proprietary Company Ltd (BHP), who are

exploring for copper and gold in Chagai district.

• M/s. Premier Oil and Shell, Pakistan who are prospecting for oil and gas reserves

in Eastern Balochistan. .

• Over 500 prospecting and mining licence holders who are engaged in exploration

and mining of various minerals.

• Owners of the mineral-based industries, who would utilise the mining products.

• Mine workers, who work in underground mines and are generally unaware of the

usefulness of this background paper.

• Mineral-based industry workers, who least care as to how the raw material they

use is produced.

• The common man, who is to pay high cost of living in every field and is made to

pay inflated utility bills due to under developed state of industries in the country,

including petroleum and mining industry.

The interest of private sector domestic and foreign petroleum and mineral exploration and

mining companies engaged in activities in the province is to have a peaceful, secure and

trouble free environment so that they could work with full concentration. The

representatives of these companies were invited to participate in discussion, present their

problems and suggest the solutions so that a conducive environment for better working

may be created. Views of this group of stakeholders have been given serious

consideration while preparing this background paper, as they form the backbone of the

petroleum-, mineral-, and mining industries. Non Government Organisations (NGO's)

Over 50 NGO and donor-funded bilateral projects, including the IUCN, are currently

involved in various development projects in Balochistan. Interest of all these agencies is

common, which is to ensure sustainable development work in the province. As regards

this background paper, which could help develop the petroleum, and mineral and mining

38













4.1.3 Employment Opportunities

Low population density, widely scattered settlements and slow development of

the industrial sector are in many ways a function of the province’s history and its socio-

cultural fabric. Human settlements have grown near sources of water, around commercial

centres and on trade routes.

Balochistan did not take much advantage of its strategic location adjacent to

Afghanistan and Iran. Its land did not offer much in terms of trade and commerce, nor did

its rivers serve as dependable sources of water around which urban centres could form.

The classic evolution of agro-pastoral systems into commercial and manufacturing

centres, and the development of urban clusters into cities has been slow to take place.

Only Quetta and Sibi, with populations of over 10,000 in 1951, offered the potential for

the establishment of large and medium-scale manufacturing units. But these sites did not

have the industrial infrastructure to enable rapid industrialization. At best, the province

could only promote small-scale, labour-intensive businesses and cottage industries,

mainly producing handicrafts. The only industrial units established prior to the late 1960s

were pharmaceutical and alcoholic beverage factories in Quetta and the woollen mills in

Harnai. Cottage industries, such as flour mills and handicraft units were in a rudimentarystage of development. The breakup of the ‘one unit’ into provinces in 1970, brought the

need for industrial growth into sharp focus. In the late 1970s, numerous small industrial

units, such as flour mills, or small companies engaged in handicrafts and livestock

products, auto repair, agricultural engineering workshops, shoe making, carpet weaving

and blanket making were established all over the province. A date processing plant was

established at Turbat and fish processing facilities were improved in Gwadar and Pasni.

Women produced handicrafts in their spare time and produced consumer goods and

traditional cottage - industry products, such as carpets and woven fabrics.

The establishment of these enterprises reflected the policies adopted for

industrialization in Pakistan. The private sector has been encouraged to establish small

and medium-sized, labour-intensive, import substituting and export-oriented industries.

44







4.1.5 Share in Power Generation

Uch Power Plant

Plant construction began in late 1995. The IFC financing will help to "build own

and operate a 586 megawatt gas-fired combined-cycle power plant." (IFC Annual Report

FY1996) Since the mid-1980's, the Government of Pakistan has been implementing a

broad-based structural adjustment program supported by the Bank and the Fund. The

reforms were extended to the energy sector with Bank support in the form of two Energy

Sector Loans and several investment operations. In February 1994, [Pakistan] began the

implementation of a three-pronged strategy in the power sector: (i) restructuring and

privatization of power sector entities and unbundling of their activities, including gradualdivestiture of the Water and Power Development Authority's thermal generating plants

and distribution system and privatization of the Karachi Electricity Supply Corporation;

(ii) encouragement of the construction of new thermal power plants and transmission

lines by the private sector on a Build-Own- Operate (BOO) basis; and (iii) establishment

of a regulatory body, the National Electric Power Regulatory Authority. The Bank has

supported Pakistan's efforts during this period through several operations.... The proposed

project promotes private sector participation in the power sector, and helps alleviate

electricity shortages through the efficient use of domestic resources. (World Bank Project

Information Document, Pakistan-Uch Power Project Guarantee, Project ID PKPA40547,

October 30, 1995)

Issues:

Environmental and Social Impacts: Baluchistan province is the homeland of traditionally-

independent Baluch tribal peoples. The deal was brokered in part by Robert "Bud"

McFarlane, a former national security advisor to then-President Ronald Reagan.

McFarland attempted suicide in 1987 after he acknowledged withholding information

from Congress about secret arms sales to Iran.

NGOs involved:

Notes: This project involves the construction of three gas turbine units that can burn

47





4.2 FUTURISTIC PERSPECTIVE OF ROLE OF MINERAL

BASED INDUSTRY IN THE ECONOMIC DEVELOPMENT OF

BALOCHISTAN.

One of the key initiatives by the government of Balochistan in Balochistan

Resource Management Program. Significant areas of the program are highlighted below:

Balochistan Resource Management Program (BRMP) has been conceived to

provide fiscal space for sustainable development, and improve allocation and monitoring

mechanisms for effective and transparent utilization of funds; and to create enabling

environment and supporting institutions for effective public service delivery, sustainablewater management and private sector development.

The scope of the BRMP includes actions associated with reforms in two domains;

Policies, laws and regulations;

Institutional strengthening and capacity building.

BRMP is structured around two Policy Outcomes, each with corresponding result

areas and supporting agreed actions judged essential for the reform process: (i) enhanced

provincial finances through fiscal restructuring and financial management; and (ii)

enhanced processes and adequate institutions for public and private service delivery.

The program activities encompass seven thematic areas mentioned below:

Rationalize poorly designed, untargeted subsidies;

Broaden the tax base, expand coverage and rationalize user charges;

Establish reliable, transparent and accountable financial management systems;

Establish and implement transparent, rule-based systems of local government funding;

Improve administrative frameworks for effective public service delivery;

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consumer products and ports for export oriented industries. The potential for the

establishment of resource-based industries was not exploited during the first 30 years of

the province's history due to the absence of a strategy and guidelines for setting up a

self-reliant, economically viable, sustainable industrial sector.

Step-sisterly treatment

Natural resources (minerals) and agriculture both have their roots with the earth.

It is amazing that a flat rate of electricity is charged from tube wells needed for growing

the crops, but no such system is applied in mining or value added mineral resources. The

marble industry owners are very small investors, having cutters, grinders and polishing

machines, and the electricity rates are charged on commercial basis. Pakistan got green

revolution due to the incentives provided by the-Government, same is needed to be that

site resulting in closure of mine since then, and settlement to issue is still not in sight.

Meanwhile Khost town business activity has gone to a minimal level, and it is giving an

impression of a ghost town. Same applies to the energy lifeline of country. Sui gas plant and pipe

lines have recently been damaged by these elements.

Difficult terrain remote location

Balochistan Plateau is a hard area. Geological evidences coincides with remote

areas, and difficult terrain, where social sector development programs are hardly

addressed being low population density zone, non availability of water, electricity and

infrastructure- A big difference between living in cities and bringing city life at mines is

hardly realized & understood. Shift planning premises at national level to mining areas.

Development of infrastructure will expose minerals and generate employment in remote

areas, help poverty alleviation, suppress tendency of urbanization. Over urbanization,

over taxation of Quetta aquifer can be arrested if basic amenities be provided at those

sites.

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Regional aspirations in case of grant of mineral concessions may not be in line

with economic viability of the project, or overall national interest. The potential investors

shy away from such ventures if setting up of downstream unit in Balochistan is not

viable. As a result, the mineral wealth may remain unexplored and unexploited.

The points agreed at the time of inception of policy regarding cine window

operation & no more new taxes has been defied at the time of implementation.

Regulatory regime only implemented to the extent of creation of departments of Mines &

Minerals. Ordinary lessee/licensee still is not facilitated on free access to mineral

potential regions, geo-data, maps, mineralogy and geochemistry, info on infrastructure

extent of value addition required & ware houses where such facilities are locally

available.

A vibrant mining sector contributes to employment generation and reduction in

poverty. The most sensitive elements in maintaining social sustainability of modem

mining are the communities that exist at a potential mining site, the communities which

come to live around the mining site during its active phase of the mine and finally the

state of the community after closure of the mining operations. In Pakistan, surface rights

belong to the Province, individual or communities. While the communities get

compensated under law for handling over such rights to provide access to the mineral

underneath, normally they do not have any stakes or sense of participation in the eventual

mining venture. In mineral rich areas in particular, the economically marginalized

communities who have the surface rights generally do not have the bargaining power to

get mining Companies to invest in development of social infrastructure like schools,

hospitals and sanitation in the mining area. In this background, the Province could

consider earmarking a portion of the mining dues received in the State Exchequer for

local area development in mining areas.

The officers and staff of Mines and mineral Department of this province appear to

be frustrated due to partial implementation of the National Mineral Policy. Recently (6th

January 2005) a Director General has been appointed, but the regulation wing has no

grade-19 officer. Similarly Exploration wing requires well trained staff and latest

55







changed in a race to generate revenue earning and derive importance on this basis

disregarding the envisaged charter, at the cost of non conservation of minerals,

overlapping roles, low productivity and poor safety. The original charter revival will help

in boosting the private mineral sector, and in turn boost the economy of the country. It is

worth to mention that entry of foreign firms in metallic mining will not only help in

human resources development upto international level but also set a mining tradition in

the country which is presently missing in private sector.

4. Neither fiscal Regime as a whole is investment friendly nor development oriented

but highly commercial from government point of view. High rate of taxes/ tariff have

eroded the commercial viabilities of the minerals for the domestic and global market.

Sale Tax as a whole is one of the sore point which has suppressed the tendency of honest

reporting of mineral production. Despite assurance in the Mineral Policy at the time of its

inception; subsequent levy of Sale Tax has shattered the faith and confidence of the Mine

Operators as a result there is no choice left except)o withdraw it. There should be no

GST, Custom Duty on mining related machinery and the tax holidays may be granted on

new projects for at least for 5 years.

5. Drastic changes are required in educational curriculum at educational institutions

by considering the requirements of up to date mineral industries of the world. The

universities should have applied courses in the field of mineral exploration, mining and

mineral processing. Technical education and vocational training institutes (TEVTI) of the

province should have resource based industrial training progress. Marble & Granite

Cutting and dressing at Quetta, establishment of Rock cutting units at Naushki will help

the local students to install small cutting units at their respective areas. Establishment of

Gem & Gemology centre at Women University will strengthen and develop the

craftsmanship of ladies of this province, there is need to establish gem carving section at

Noshki technical center, and at High Tech training center, Sariab for male trainees.

6. As already proposed TRYSEM (Training of Rural Youth for Self employment).

programme should be launched in the province with the collaboration of GoB, SMEDA,

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a grouping of small coal mine holders in an area be made and encouraged to use the latest

technology in a group, then not only wastage be minimized, but also it will become more

viable for the share holders in that block. The foxhole coal mining culture of the small

coal mine owners will come to an end and it will encourage in utilization of skilled man

power, and eliminate the risk of the lives of mine workers. Non development of coal

mines on scientific lines leads to inappropriate extraction of coal; thereby this natural

resource. is being mercilessly destroyed for a short term gain. Appropriate detailed

geological survey leading to a sound mining planning, and then utilizing longwall mining

practice with mechanized transport system is a call of the hour in coal mining. Similarly

70% loss of Granite and Marble at the mining site due to blasting in Balochistan can be

minimized and brought a par with the developed world, where it is under 25% by

encouraging Grouping culture. Stone Engineering experts have indicated that the present

day international market is geared only to standard blocks measuring 4 to 8 meters, and

diamond wire be used for quarrying the raw blocks in situ.

6. It will be appropriate if a Mineral Advisor/Mineral Specialist be assigned for

coordination, implementation and dissemination of information on this vital subject in the

provincial cabinet.

Mineral deposits are irreplaceable wealth. Once taken out of ground, they are lost.

Conservation of mineral resource is, therefore highly obligatory, and can be achieved by

preventing waste during production, processing and utilization. Foxhole coal mining,

blasting for quarrying minerals or leaving pillars of coal or ore left behind in mines, that

they become unmineable should be condoned.

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5.3 Conclusion

The mining and mineral industry is suffering from wasteful mining practices, poor

infrastructure, lack of education, partial implementation of National MineralPolicy and a host of other issues particularly the law and order situation in the

province as well as lack of will to improve this important sector, which is

undoubtedly most crucial for economic development of Balochistan. Unless

concerted efforts are made to improve the overall mineral based industry, the

resources of Balochistan will be brutally exploited by developed countries with

very little benefit to the province itself.

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References

1. THE MINERAL INDUSTRY OF PAKISTAN—1998

Mining Journal, 1998, Chinese agree to help restart Saindak: Mining Journal, v.

330, no. 8462, January 9, p. 22.

2. Balochistan Conservation Strategy Background Paper by Dr. Mahmood Siddiqui,

Shah S. Saad Hussain & Dr. M.A. Mirza. IUCN Report.

3. Economic uplift through Minerals & Mineral Based Industrial Development in

Balochistan, Muhammad Hafeez Butt, February 2005.

4. Investment Oriented Study on Minerals and Mineral Based Industries Vol. I –

Expert Advisory Cell April-2004.

5. Investment Oriented Study on Minerals and Mineral Based Industries Vol. II –

Expert Advisory Cell April-2004.

Websites cited

www.balochistan.gov.pk

www.minerals.usgs.gov/minerals/pubs/country.

www.bcs.iucnp.org

www.gsp.com.pk/program/index.html

Departments:

Balochistan Development Authority Quetta, Pakistan

Geological Survey of Pakistan Quetta, Pakistan

Oil and Gas Development Corp. Islamabad, Pakistan

Pakistan Mineral Development Corp. Karachi, Pakistan

Pakistan Petroleum Limited Islamabad, Pakistan

W d P D l A h i L h P ki

http://www.balochistan.gov.pk/

http://www.minerals.usgs.gov/minerals/pubs/country

http://www.gsp.com.pk/program/index.html

http://www.balochistan.gov.pk/

http://www.minerals.usgs.gov/minerals/pubs/country

http://www.gsp.com.pk/program/index.html

Documents

IRP of Mr. Saeed Jamali