According to an exclusive Business Recorder report, the federal government is inclined to help Metal Resource Development Limited (MRDL) sell its entire magnetite iron concentrate output to Pakistan Steel Mills (PSM) by amending a five-year old decision. This has reference to MRDL's location in an Export Processing Zone (EPZ).
Hence it was allowed to export 80 percent of its production to other countries, leaving bare 20 percent of it for use within the country. It will be noted 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. That must have been the reason to explore the local availability of this vital raw material.
PSM through Saindak Metal Limited (SML) entered into negotiations with M/s MRD to utilise the local iron ore produced as a byproduct in the extraction of copper and gold in EPZ, Saindak, Balochistan. Of course, a hard nut to crack, the shift appears to have been made possible from the compelling facts that PSM happens to be the only end consumer of this byproduct, and that the contemplated arrangement can ensure the country the huge saving of $3.5 to 4 million per year in foreign exchange.
But it is not just as simple as that, for the conclusion now drawn must have resulted from an unfailing approach, based on close and dispassionate comprehensions of all the factors involved. For, as it is, MRDL is involved in the production of copper blister with tails/slurry produced as byproduct, containing particles of iron. More to this, the byproduct is not of much use either.
Hence, on persuasion of PSM, the MRDL agreed to separate the iron particles from slurry through magnetic separation for supply of the resultant product ie, magnetite iron concentrate, to the PSM as alternate raw material for iron ore. Small wonder, consequent upon a series of meetings between the management of PSM, SML and MRDL, a contract for supply of 60,000 tons of magnetite concentrate annually was reportedly signed on January 31, last year.
Hence, to avail of the opportunity of local procurement of iron ore, PSM approached the FBR for necessary amendments in the related SRO to allow the MRDL to supply the magnetite concentrate to PSM. The magnetite concentrate is a byproduct, 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 overall production.
Now that FBR has advised the PSM to approach the Economic Co-ordination Committee (ECC) of the Cabinet, and the Industries Ministry has also clarified that it had consulted FBR and Petroleum Ministry, who have also supported the proposal, one can look forward to an early finalisation of the imaginative plan.
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