One-third of Pakistan’s population is impelled to live in abject poverty although the country happens to be one of the richest countries of the world in terms of mineral resources -- copper, gold, iron ore, shale gas, shale oil, marble, granite, etc. Reason: Inability to exploit the bounties of nature on fast track basis for want of a focused approach, vision, working capital, technology, inconsistent policies, non-availability of skilled labour force, corruption and, above all, necessary infrastructure for scientific mining.

Taking pity on the nation’s lacklustre performance and the pathetic condition in which it has gradually landed itself, the nature itself keeps revealing, time and again, some of the vast mineral reserves that it has blessed this nation with. Recently, new deposits of high quality coal, estimated to be over one billion tonnes, have been discovered in Badin district of Sindh province. These new deposits of coal have high heating value, as per information provided by Dr. Imran Khan, Director General (DG) of the Geological Survey of Pakistan (GSP) to the National Assembly’s Standing Committee on Petroleum and Natural Resources on May 15, 2014. With this discovery, Pakistan’s deposits of coal have increased by about 50 per cent and these now exceed three billion tonnes.

The GSP DG said there were substantial deposits of gold and copper and more than 200 million tonnes of iron ore, but these could not be exploited or utilised because of lack of infrastructure and technology. The exploration rigs being used by GSP for the survey of natural deposits had been purchased in the 1950s, he said, and since then no addition was made.

A cursory glance over the country’s natural resources shows that the coal reserves in the Sindh province alone now exceed 2.93 billion tonnes. Even before the Badin discovery, with coal reserves of around 200 billion tonnes, globally Pakistan was the sixth largest coal rich country, having an aggregate energy potential exceeding the combined energy potential of Saudi Arabia and Iran.

At Thar alone, Pakistan’s coal reserves are estimated to be over 185 billion tonnes against India’s total coal deposits of 140 billion tonnes. Six other coal fields in Sindh have 8.601 billion tonnes of coal reserves. These include: Lakhra, Sonda-Thatta, Jherruck, Oagar, Indus East, and Meting Jhimper with reserves of 1.328 billion tonnes, 3.700 billion tonnes, 1.323 billion tonnes, 312 million tonnes, 1.777 billion tonnes and 161 million tonnes respectively. Other major fields in the country contain reserves of over 533 million tonnes. These are: Khost-Sharig-Harnai, Sor-Range-Degari, Mach-Abagum, Duki and Pir Ismail Ziarat in Balochistan with reserves of 76 million tonnes, 34 million tonnes, 23 million tonnes and 12 million tonnes respectively; Salt Range and Makerwal-Gullakhel in Punjab with reserves of 234 million tonnes and 22 million tonnes respectively; and Hangu in KPK with a reserve of 81 million tonnes. In addition to these major fields, there exist minor coal deposits at Badiuzai, Bahol, Bala Chaka, Bhalgor, Johan, Kachh and Margot in Balochistan; Cherat in KPK; Choi in Punjab; Khilla (near Muzaffarabad) and Kotli in Azad Kashmir.

Presently, coal is providing 26 per cent primary energy and 40 per cent of electricity supply worldwide. Coal has gained special importance due to the growing concerns for energy security prompted by apprehensions about fast depletion of the known resources of energy and abnormal fluctuations in the international prices of oil. Currently, South Africa is the world’s largest producer of electricity from coal, accounting for 93 per cent of its total energy requirement. Other top producers of electricity from coal include: Poland 87 per cent, China 79 per cent, Australia 78 per cent, Kazakhstan 75 per cent, India 68 per cent, USA 60 per cent, Israel 58 per cent, Greece 54 per cent, Czech Republic 51 per cent, Morocco 51 per cent and Germany 41 per cent.

Though already meeting most of its energy requirement from coal, China is now turning its vast coal reserves into barrels of oil at Erdos (Inner Mongolia) where it has set up the biggest coal-to-liquid (CTL) plant outside South Africa. Pakistan also needs to exploit its vast coal reserves, both for producing electricity and for converting these into barrels of oil, if need be seeking guidance, help and assistance from China and South Africa -- the countries which are already engaged in similar ventures in a big way.

Ironically, till recently, Pakistan hardly met its energy needs from coal. The country meets 80 per cent of its energy requirements through imports, which consume some 60-65 per cent of the country’s annual foreign exchange earnings. According to authorities, the country’s needs for energy are projected to grow at a pace of 2.0 GW per year during the next four to five years. To cater to the growing demand for energy, there is need to make an investment of about $4.0 billion per annum, which would further put pressure on the country’s meagre foreign exchange resources.

The fact that the country’s massive reserves of coal have largely remained untapped till now, denying employment and enormous economic opportunities to the people, speaks volumes about the priorities and lack of focused approach of the successive governments in Pakistan. Whenever the government showed its willingness to exploit these vast reserves, certain lobbies and their moles became active to scuttle the move.

Unless the country curtails its energy import bill through optimum exploitation of indigenous resources, it would remain mired in energy crisis and ever-increasing debt trap. Given the situation, one would appreciate the decision of the government to use indigenous resources of coal to overcome the lingering energy crisis. According to experts, Pakistan has also gas reserves of 32 trillion cubic feet, but these are not being expeditiously exploited for one reason or the other.

It was, therefore, the need of the hour to fully exploit the national mineral reserves and, apparently, the government is now undertaking practical steps to set up coal-based power plants, using both the imported and domestic coal. However, for optimum utilization of the country’s coal reserves, the nation needs to upgrade and modernise the quarrying techniques, which might involve inviting foreign capital and expertise, and also training of the local manpower for this job.

To encourage fresh investment in coal-based thermal power plants, National Electric Power Regulatory Authority (NEPRA) increased, on May 20, 2014 upfront tariff for coal-based power projects by 12-20 per cent, making it "the most attractive upfront tariff for coal-fired power projects in the world." NEPRA has taken this step on prodding from the government although some circles believe that the upfront tariff already granted by NEPRA was quite high. Perhaps, the authorities have taken this step to encourage the private sector to install state-of-the-art coal power plants with high efficiency (over 45 per cent) and zero mercury emissions, using less than 320 grams of coal to generate one unit of electricity!

The revised tariff would enable the investors to recover their full equity investment in less than three and a half years. According to an official, for the first time about 30.65 per cent rate of return (i.e. highest ever return on any investment in Pakistan’s history) has been offered in the upfront tariff for power projects based on Thar coal. For projects, based on imported coal or domestic coal other than Thar, the offered rate of return would up to 24.5 per cent of equity, depending on different project capacities. Earlier, NEPRA had offered to investors, in May last year, a maximum rate of return of 20 per cent as a special case to attract investment in coal-based plants.

Gold and copper deposits:

The world’s second biggest gold and copper reserves are reportedly located at Reko Diq in Chaghai (Balochistan). However, these reserves yet remain to be exploited, on fast track basis, due to political inexpediency, wavering decisions and bureaucratic wrangling. With mineral resource estimated at 5.9 billion tonnes, Reko Diq has the potential to showcase Pakistan as a world class mining destination, where it is safe for companies to invest in mining projects to explore precious natural resources, like gold and copper.

This resource (an estimated 2.2 billion tonnes of economically mineable ore, with an average copper grade of 0.5 per cent and an average gold grade of 0.3 grams per tonne) can be processed to produce 2.2 billion pounds of copper and 13 million ounces of gold in about 56 years of mine life. In other words, the estimated annual production of the Reko Diq project is expected to stand around 200,000 tonnes of copper and 250,000 ounces of gold contained in 600,000 tonnes of concentrate.

The copper and gold reserves discovered in Balochistan have been evaluated at 273 billion dollars. According to Dr Samar Mubarakmand, the same kind of reserves has also been discovered in North Waziristan. Due to these discoveries, Dr Samar Mubarakmand (addressing at Government College University Lahore, on December 3, 2010) termed Pakistan "one of the richest countries of the world in terms of mineral resources and copper and gold reservoirs."

In the Northern Areas, at Gilgit people are collecting gold particles from the sand on the banks of the river Indus since ages, but the location of the source - the mine - has not been discovered so far as the concerned department (GSP) is ill-equipped to undertake such jobs in difficult terrain.

In addition to gold, copper and coal, Pakistan has some 117 types of marble and granite, stretching from Las Bela (Balochistan) to Siachin (Northern Areas) whereas other countries in the region, including China and India, do not have more than 20 types of stones. But, Pakistan’s exports of marble and granite are far less than the exports of both China and India in this sector.

Pakistan, therefore, needs to exploit its vast mineral resources expeditiously to curtail its energy import bill drastically and to provide gainful employments to its citizens.