Afghan iron ore: FPCCI explains how to revive MSPs – Markets
ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the federal government to exploit the Afghan iron ore mines of Hajigak to revive Pakistan Steel Mills (PSM).
In a letter to Minister of Industries and Production Khusro Bakhtiyar, FPCCI Chairman Mian Nasser Hyatt Maggo urged the GoP to engage in the much needed commissioning of the detailed feasibility study to be conducted to evaluate profitable and long-term iron ore. supply potential of the Pakistani steel industry; which is set to grow at a rapid pace given its growing domestic steel consumption.
He said Pakistan could greatly benefit from next-door supplies for decades to come and, on the face of it, would be a multi-billion dollar geo-economic prospect to be cost competitive.
According to the FPCCI, no other country benefits from the land route as short as Pakistan – as Hajigak and Peshawar are only 400 kilometers apart, which adds considerably to its geo-economic value and will help maintain Pakistan’s economic security. .
Maggo believes that Prime Minister Imran Khan’s vision for low-cost affordable housing for every household, coupled with soaring steel prices, justifies an immediate need to secure the country’s iron ore supply. from Afghanistan for PSM and future expansion of the steel industry. .
Iron ore from Afghanistan will change the cost matrix of locally made steel; which remained dependent on higher logistics costs than the material itself when importing from countries i.e. Australia, Canada, South Africa etc.
The FPCCI recommended that Pakistan take the initiative and sign a memorandum of understanding with the Afghan government; before any other regional or sub-regional country gets first mover advantage to explore large-scale iron ore reserves. The mines can hold up to 2,100 million metric tons and more of high-grade iron ore (61-69%) and would translate to $450 billion in today’s market. This effectively makes Hajigak Mines the largest in Asia and makes Afghanistan one of the top ten countries in terms of iron reserves.
Maggo argued that this long-term mining and import deal with Afghanistan would be a win-win mechanism for Pakistan and Afghanistan, as it would create a sustainable revenue stream for the resource-constrained brotherly neighbor and create thousands of jobs there. Furthermore, mining Hajigak iron at a competitive price may soon prove to be a lease of life for the dysfunctional PSM and expanding steel industry in Pakistan.
Copyright Business Recorder, 2022