Faiza Tehseen

Export of non-processed and non-value-added minerals in raw form deprives Pakistan of huge socio-economic benefits annually. By establishing a mining product-based value chain, a billion-dollar industry can come into being, which can not only boost the mining sector but also generate more revenue and foreign exchange for the state coffers, said Muhammad Yaqub Shah, Principal Geologist at Islamabad-based Global Mining Company, in an interview with WealthPK.

Value chains are important to open a window of opportunities for jobs, services, trade and business activities, infrastructure development, technological advancement, strategic resource utilization, and poverty alleviation, he said. Buyers from Pakistan purchase minerals in raw form and only pay for the principal ore. After taking them to their countries, they process them to separate the associated minerals. Sometimes, the associated minerals also include the rare earth elements. So, before value addition, only processing begins to generate handsome profits. The extracted associated minerals also fetch them income and value addition multiplies the profits to a great extent, he pointed out. “So, value chains concerning minerals must be established in Pakistan.

In neighbouring Afghanistan, it is mandatory that no mineral can be exported in raw form. According to the Afghan law, a mined material has to be processed and value-added before export. They have made this decree a part of their constitution. So, if they export any mined product, they extract its true benefit,” he explained. Without a mineral chain, the sale of mining commodities from Pakistan is a type of robbery and there must be laws to check it. The precious mineral sources of Pakistan hold great socio-economic value. They play a vital role for the local industrial units besides exports. “The local value-chain will also help cut the import bill of many minerals for the domestic industry. Owing to the absence of local processing units, industrialists import raw materials of multiple types to produce a variety of products,” he added.

Development of local value chains will also create a new job market and benefit entrepreneurs and small and medium enterprises (SMEs). The mineral wealth of Pakistan contributes insufficiently to its GDP. Like agriculture, this sector must be established as the second profit-generating entity. Unfortunately, lack of value addition and its proper chain causes great economic loss to the country. Many mineral-rich areas, devoid of agricultural products, harbor profitable resources underground. The income generated from mining is crucial for the residents of these barren areas. Yaqub urged the government to expedite the development of value chains, considering it a crucial step for a prosperous Pakistan.

Credit: INP-WealthPk