MSDL may be allowed to sell magnetite to PSM

The federal government is expected to allow M/s Metal Resource Development Limited, (MRDL) to sell its entire magnetite iron concentrate output to Pakistan Steel Mills (PSM) through amending a five year old decision.
M/s MRDL Saindak is located in Export Processing Zone (EPZ) and as per notification of the Federal Board of Revenue (FBR) No SRO 461(1) 2004 of June 12, 2004, the unit is allowed to export only 20 per cent of its total production within Pakistan while 80 per cent of its production has to be exported to other countries.
Official documents obtained from the Industries Ministry, suggest that total annual iron ore consumption of PSM is around 1.5 million tons which is met through imports involving a foreign exchange equivalent of approximately Rs 12 billion.
In order to explore the local availability of this vital raw material, PSM through Saindak Metal Ltd (SML), entered into negotiations with M/s MRD to utilise the local iron ore produced as a bye product in the extraction of copper and gold in EPZ , Saindak, Distt Chaghi, Balochistan.
M/s MRDL is involved in the production of copper blister with tails/slurry produced as bye product containing particles of iron. This bye product is not of much use. On persuasion of PSM the MRDL had agreed to separate these iron particles from slurry through magnetic separation for supplying the resultant product ie magnetite iron concentrate to PSM as alternate raw material for iron ore.
The documents further reveal that after series of meetings between the management of PSM , SML and MRDL a contract for supply of 60,000 tons of magnetite concentrate annually had been signed on January 31, 2008.
For availing opportunity of local procurement of iron ore, PSM had approached the FBR for issuing necessary amendments in the SRO to allow M/s MRDL to supply the magnetite concentrate to PSM. The magnetite concentrate is a bye product, constituting a small component of the main product (copper blister) and total cost of 60,000-70,000 M/ton magnetite is less than 20% of the total value of the over all production. PSM is the only end consumer of this bye product and through this arrangement, foreign exchange to the tune of $3.5 to 4 million per year will be saved.
In response to the PSM''s request, FBR has advised the former to approach the Economic Co-ordination Committee (ECC) of the cabinet, which is competent forum to take such key decisions.
The Industries Ministry has also clarified that in terms of rule 8(1) of the Rules of Business 1973, it consulted FBR and Petroleum Ministry, who have also supported the proposal.