Editorial Feature

Pakistan: Mining, Minerals and Fuel Resources

Pakistan is located in Southern Asia between Iran and Afghanistan on the west and India on the east. China is its neighbor to the north. The total area of the country is 796,095 km2, and it has a population of 190,291,129 according to 2012 estimates, which makes it the sixth most populated country in the world. The country’s climate is mostly hot and dry desert type.

The national flag of Pakistan.
Image Credit: CIA Factbook

Pakistan’s history is one that is filled with political strive causing very little inflow of foreign investment thereby slowing down the country’s economic growth. The 2011 UN Human Development Report states that poverty in the country is nearly 50% of the population. The GDP of the country in 2011 was reported as $494.8 billion.

The natural resources of Pakistan consist of extensive natural gas reserves, but limited petroleum reserves. The country is also rich in iron ore, low-grade coal, copper, and limestone. The mineral sector is marred by poor governmental planning and reforms.

Overview of Resources

Pakistan’s mineral commodities’ production is slow-paced despite the abundance of minerals and metal deposits. Production of dolomite was estimated to have increased by 32% in 2010 compared to that of 2009. As of 2010, the country’s unexplored oil reserves and gas reserves were estimated to be 3.5 bbl and 1.76 trillion m3, respectively.

Natural gas output from large fields at Mari in Sindh Province and Sui in Balochistan Province in 2010 was estimated at 42 billion m3. The abundant lignite reserves in the Thar District in Sindh Province are expected to be used in coal-fired power plants. Tar coal gas is likely to be another power generating source as it is available in abundance.

Experts feel that the production of lead and zinc concentrates will increase gradually once the mine at Duddar begins functioning to its full capacity.

The map of Pakistan. Image Credit: CIA Factbook


In 2010, Tethyan Copper Co. Pty. Ltd. (TCC) completed a feasibility study for the $3.3 billion Reko Diq copper-gold project, which was then submitted to the local government at Balochistan Province.

TCC's feasibility study is the largest single foreign direct investment in Pakistan's history.

The study estimates the minable reserves at Reko Diq to be 2,220 million (Mt) of ore. The extracted raw ore is likely to garner at least $60 billion over the 56-year life of the mine.

However, the company is stuck in the midst of political debates about whether the project should be handled by a new public sector company so that the revenues from the mine would help pay off the country’s external debts. Experts are hoping this issue would be sorted and production of copper and gold would start by 2015.

Pakistan Steel Mills Corp. (Pvt) Ltd. (PSM) is yet another company in turmoil due to the government's lack of initiative to privatize the company and help it regain its huge financial losses due to poor management.

Industrial Minerals and Gemstones

The cement industry has played an important role in the development of Pakistan’s infrastructure. In 2010, Pakistan was mainly exporting cement to African countries, Iraq and Qatar. The estimated quantity was 13 to 14 Mt.

In the same year, Lucky Cement Ltd. produced 25,000 Mt/d of cement, of which 13,000 t/d was procured from the Pezu plant and 12,000 t/d from the Karachi plant.

To meet the increasing demand for cement, Fauji Cement Co. Ltd issued contracts to ThyssenKrupp AG of Germany and ABB Group of Switzerland in 2010 for the construction of a new production line.

Fossil Fuels

As the World Bank has not approved the financing for the Thar coal project in Sindh Province, which is considered as one of the world’s largest coal reserves containing more than 185,000 Mt, Pakistan has turned towards generating power from tar coal gas as it has one of the five leading tar coal reserves in the world. The government planned to set up plants near the tar coal deposits in 2011. These plants would help meet the power shortage in the country to a certain extent.

Pakistan imports almost 80% of its oil requirements. Oil and Gas Development Co. Ltd. (OGDC), Pakistan Petroleum Ltd., and OMV Aktiengesellschaft of Austria are reported to be producing 11.3 million m3/d. In 2010, OGDC claimed to have located new oil and gas deposits at the Rajian oilfield south of Islamabad. OMV owns seven oil exploration licenses and two oil production licenses and was considered as Pakistan’s leading foreign gas producer with a production of 14,000 bbl/d. The company plans to increase production to 25,000 bbl/d by 2014.

In 2010, the government had proposed to set up the Khalifa Coastal Oil refinery with a capacity of 250,000 bbl/d and the Byco Petroleum Pakistan refinery with a capacity of 115,000 bbl/d in the Balochistan Province.

A 25-year export deal has been signed by Iran and Pakistan wherein Iran has to supply Pakistan with 21.2 million m3/d of natural gas commencing from the end of 2014.


The Pakistani government has realized that without proper regulations, the progress of the mining sector will continue to be slow and the probable revenue from it will remain unrealized.

A new petroleum policy was initiated in 2009 to speed up the exploration process and attract more investment. The government also provided 50 concessions for both onshore and offshore oil and gas exploration via bidding in 2010. Similarly, the government had made changes to some of its policies to speed up the development of domestic gas resources in order to meet the increasing demand for energy in the country. It has also changed policies regarding gas prices and early production incentives.

This year the Punjab government has decided to spend Rs. 8.6 million on minerals and ores exploration in its province. The province will see 10 projects related to the minerals and the ore sector commence shortly.

All these efforts look very promising for the future of Pakistan’s mining sector. However, the Balochistan government’s dispute with the Canadian and Chilean joint venture company, TCC, is causing negative publicity for the country. Recent reports claim that Pakistan might face a one billion dollar penalty from the International Centre for Settlement of Investment Disputes (ICSID), as the Balochistan government is yet to give a mining lease to TCC. Global mining companies will certainly be monitoring the way in which the Pakistani government is going to settle this issue.

Disclaimer: The author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.

Sources and Further Reading

Disclaimer: The views expressed here are those of the author expressed in their private capacity and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork the owner and operator of this website. This disclaimer forms part of the Terms and conditions of use of this website.

G.P. Thomas

Written by

G.P. Thomas

Gary graduated from the University of Manchester with a first-class honours degree in Geochemistry and a Masters in Earth Sciences. After working in the Australian mining industry, Gary decided to hang up his geology boots and turn his hand to writing. When he isn't developing topical and informative content, Gary can usually be found playing his beloved guitar, or watching Aston Villa FC snatch defeat from the jaws of victory.


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