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Roadmap to
Extracting Punjab Iron
Ore and Conversion to
Steel
Technical and Commercial Strategy
Two very distinct large scale reserves have awaited development for decades in
this province. The projects have not moved beyond early prospecting stage. The
availability of this mineral resource in two separate areas of the province needs to
be first authenticated through a detailed bankable geological study, separately in
each. This will be followed by development of separate mining strategies for each
area and the scale on which mining is anticipated to be undertaken because
mining strategies - and associated unit extraction costs - are often scale
dependent. Simultaneously, pilot Metallurgical extractive plants and processes
need to be developed and subsequently commercialized on a fast track.
2010
Projects Directorate,
Punjab Board of Investment & Trade
4/1/2010
Copyright 息2010 - Punjab Board of Investment & Trade
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
2
ACKNOWLEDGEMENTS
This paper is the result of intensive consultations carried out by PBIT across the range of stakeholders,
businessmen and technical experts in the field. These strategic conversations commenced in November
2009 and concluded in March 2010 and the complete transcript of proceedings is available with PBIT. In
particular, PBIT would like to acknowledge the invaluable contributions from the following members,
without whose help, this study may not have been possible.
1. Mr. Saif Ullah Chattha, Secretary, Mines & Minerals Department, Government of Punjab
2. Mr S. Ishtiaq Hussain, Manager, Mines & Minerals Department, Government of Punjab
3. Mr. Muhammad Aslam, Manager, Mines & Minerals Department, Government of Punjab
4. Mr Nadeem Babar, Chairman, Chief Ministers Task force on Energy
5. Mr. Illyas Cheema, Former Director, NESCOM
6. Dr. Waheed Butt, Chemical Engineering Consultant
7. Mr. Abdul Aziz Chan, Chairman, Rehman Steel Furnace (Pvt.) Lahore
8. Mr. Rehman Aziz Chan, Director, Rehman Steel Furnace (Pvt.) Lahore
9. M. Y. Baig, CEO, IFC
10. Mr. Hammad Baig, Director, IFC
11. Mr. Muhmmad Nasim Riaz, Consultant, IMC
12. Mr. Javed Mughal, Chairman, Mughal Steel
13. Mr. Shakeel Ahmed, General Manager, Mughal Steel
14. Mr. Ahmed Hussain, Chairman, Batala Steel
15. Mr. Tariq Sail, Country Head, Representative of Canadian Investors
16. Mr. Waqqas Asif, Hijveri Construction Company
17. Mr. Malik Anis Akbar, Chairman, Meridian Marketing
18. Mr. Asad Jaleel, Director General, EME (Pvt) Ltd
19. Mr. Sarwar Alam, Director Projects, EME (Pvt) Ltd
20. Mr. Zahoor Ahmed, Director General, Ittefaq Sons (Pvt) Ltd
21. Mr. Ali Akhtar, Principal Consultant, Metallurgicon
22. Mr. Javed Ahmad, CEO, RDC International
23. Dr. Muhammad A. Qazi, Executive Director, PCSIR Lahore
24. Mr. Mahmood Akhtar, Group Director, Nishat Group
Moazzam Husain
Director General  Projects Development
Punjab Board of Investment & Trade
23  Aikman Road, GOR I- Lahore
moazzam.husain@pbit.gop.pk
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
3
INTRODUCTION
here are 2 large iron ore reserves located in Punjab. The two have very different
geological characteristics. One located in Chichali, near Kalabagh which is low grade iron
ore is a surface deposit and other located in Chiniot/ Rajoa which is high grade iron ore
under alluvial cover. Given the very different mineralogical compositions of each, a different
development roadmap is proposed for each.
CHICHIALI RESERVES - HISTORY
his deposit is estimated around 500 million tons of low grade iron ore (Fe content 34%)
and efforts to develop it are almost as old as Pakistan itself. Initial tests conducted on
Chichali iron ore and carried out in USA, Germany and Sweden suggested this ore type is
not amenable to physical beneficiation. This was probably because the ore is in fact chemically
(as opposed to mechanically) combined with silica and poses a metallurgical challenge.
The Krupp-Renn process, a direct reduction process was developed in Germany during the
1930s. By the end of World War II, 38 kilns with an annual capacity of 1 m tons were in
operation in several countries. In 1956, PIDC, in consultation with Krupp proposed a Steel Mill
based on Chiciali iron ore with a production capacity of 50-70,000 tons of billets to be located
at Piran Ghaib near Multan. The proposal was shot down by the Planning Board (predecessor to
the Planning Commission) on the grounds that the Krupp - Renn process was not industrially
sound and feasible and the scheme was not economically viable.
In 1959, the Government retained the services of J.C Austen of the World Bank to chart out a
roadmap to develop the Chichiali reserves. His output, led to investigations being assigned to
M/S Kellog of USA. Kellog also maintained at the time, that the ore was not suitable for direct
reduction and in fact was averse to the Krupp-Renn process.
Between 1961 - 63, geological studies sponsored by the United Nations Special Aid Fund
confirmed the following deposits:
1. 250 m tons of uniform quality iron ore in one block on both sides of Chichali pass
2. 150 m tons in Kutch, Ghughlan and Makerwal mines
Encouraged by this finding, in November 1964, a pilot plant trial was carried out on 1500
tonnes of Chichali iron ore after blending it with high grade imported ore. It was conducted by
the Institute de Recherches de la Sierrugi Francaise (IRSID) at a conventional blast furnace at
Ougree near Liege, Belgium. The trial suggested this ore could be beneficiated through the Acid
T
T
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
4
Blast Furnace Process. This was further confirmed by a full scale industrial test on 15,000 tons
Chichali iron ore at Salzgitter, West Germany in June 1966, which according to international
experts was a complete success. As a result of this breakthrough, in August 1967 a German
company reportedly offered to set up Kalabagh Steel Mill of over 0.8 million tonnes per year
(mtpy) capacity based on Kalabagh iron ore and imported coal at a then estimated cost of Rs.
1.542 billion (including foreign exchange cost of Rs. 878 million). It is claimed that some
European banks also offered loans for this project and that PIDC selected a site with about 80%
raw materials available within 11 miles but unfortunately, this project was also shelved.
In April 1968, President Ayub Khan accepted an offer from Premier Kosygin of USSR, during his
visit to Pakistan, for the Kalabagh Steel Mill project. Within a month an agreement was signed
between PIDC and M/s Tiajpromexport of Moscow. Subsequently, it transpired that Russia did
not have the technology, and could not develop a feasibility to produce steel from the Kalabagh
iron ore. Instead of reviving the German offers based on local raw materials, the project was
converted into a coastal plant design and transferred to Karachi. Pakistan Steel was established
with comparatively inferior machinery and based on imported iron ore and coal. Chichiali iron
ore reserves were forgotton.
WAY FORWARD  CHICHIALI
n the aftermath of the Oil shock of 1974, both extraction technologies and energy
economics have both travelled a long way. Today presents a new paradigm from the time
when earlier engineering efforts were made on Chichiali ore. In the view of present day
experts, Chichiali ore would require a 2 stage process: 1) Beneficiation (enrichment) of iron ore
and 2) smelting in a blast furnace. Accordingly, this roadmap envisages an onsite mouth of
mine beneficiation plant. It will produce beneficiated iron ore for use in integrated steel mills.
We propose to materialize this initiative in stages. In terms of specific action steps:
1. Punjab Mineral Development Corporation (PUNJMIN) will be asked to assist in
providing drilling/ excavation services to obtain fresh samples of iron ore. The area and
excavation will be selected in conjunction with a panel of mining and geological experts
from University of Engineering and Technology (UET), Lahore, with whom, preliminary
discussions have been held.
2. These samples will then be taken to UET laboratory for complete investigation.
3. Based on these findings, an appropriate metallurgical process and technology will be
developed leading to the design of an extractive metallurgical pilot plant. The plant and
the extraction process need to be engineered simultaneously and tailored to cater to
I
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
5
the mineralogical composition of Chichali iron ore. The basic process of beneficiation is
physical separation and chemical sintering. Its output is ready-mix charge.
4. On a parallel track, a full blown study will need to be urgently undertaken to re
authenticate the reserves and recommend an appropriate, large scale mining
methodology. In this, all existing available data will be re examined so that minimal
additional drilling and excavation is required. UET has mining, metallurgical and
geological engineers. PUNJMIN has the machinery for drilling. Working under the overall
supervision of an International geological/ mining consulting company, these three may
be asked to develop a scope of work/ working plan and TORs for this scoping study and
then implement this at minimum cost and in the shortest possible time.
5. Finally a feasibility study for commercial production will be prepared.
PROPOSED ONE BILLION DOLLAR KALABAGH STEEL MILLS PROJECT
he successful pilot will be commercialized and in all probability will require the local ore
to be blended with high grade imported ore in some proportion. Based on this newly
designed process and a bankable study of the reserves, a 1.5m T steel mill in Kalabagh is
envisioned.
Location: Mouth of Mine  Minehead. Water availability, gas, energy, labor access, transport
and infrastructure.
Size: Minimum 1.5m MT
Energy: Approx. 200 MW pulverized coal based captive power plant at mouth of mine located
at Makarwal, 20-30 km from beneficiation plant.
Water: Available
Products/ Byproducts: Beneficiated iron ore. Direct reduced iron (DRI), Pig Iron, Steel, slag
cement, tar etc.
Infrastructure: This is a capital intensive integrated continuous process plant, 24 x 7, round the
year. As such highly skilled manpower such as technicians, engineers and labour will be
required and a custom housing colony will need to be developed. The area is already well
connected with roads. In addition a railway track to the nearest railhead will be laid so Kalabagh
Steel Mills freight wagons can operate under Pakistan Railways open track policy.
T
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
6
CHINIOT RAJOA RESERVES
n the 1970s, OGDC conducted an aeromagnetic survey over the pre Cambrian shield area
near Sargodha  Chiniot. Subsequently, in 1989 the Geological Survey of Pakistan (GSP)
discovered iron ore deposits near Chiniot, in district Jhang after conducting a geophysical
survey. Eleven years later, in 1999-2000, PUNJMIN commissioned RDS consultants to carry out
a detailed exploration over a small area in which 14 boreholes were dug. Each borehole struck
iron ore at depths between 120  160 m below the surface. According to the assessment of this
survey, and extrapolations and inferences there from, the following reserves were indicated.
 12m MT proven
 100m MT estimated
 500m MT anticipated
The study however stopped short of developing or recommending a mining strategy.
I
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
7
However, because the iron quality is good
(hematite), it has high ferrous content and is
therefore of smelting grade, commercial
exploitation appears feasible. A detailed techno-
economic feasibility study for the wider area
(from the earlier PUNJMIN study) must now be
undertaken to re authenticate the reserves. The
study must also recommend an appropriate, large
scale mining methodology. In this, all existing
available data will be re examined so that minimal
additional drilling and excavation is required.
This is a mega mining project. The challenge is to
tap the reserve bed which is located beneath a
70-170m alluvial overburden and a water bed. A
good reference to follow for a technical solution is
the Oilsands project in Alberta Canada. This is a
similarly challenging project and based on a
methodology termed strip mining from top down
and mining is in progress in full swing.
WAY FORWARD  CHINIOT/ RAJOA
o drive this forward one step further,
mining samples need to be obtained and a
pilot plant set up on immediate basis so
that an economical extractive metallurgical
process can be devised for commercial
production.
A private steelmaker/ fabricator has proposed to
build a pilot plant based on the new ITmK3
technology. This initiative is being encouraged by
PBIT and the Department of Mines and Minerals.
The ITmK3 process uses a rotary hearth furnace in
which fine iron ore is reduced using pulverized
coal. It requires less energy, low capital and O &
M costs. Recently, in Minnesota, a pilot
demonstration plant of 25,000 tons per year
capacity cost $ 16m to build and has completed successful trials. A 500,000 ton Commercial
T T
The Geology of the Indian Shield
Zone
Pre-Cambrian basement rocks are
considered important source rocks
for metalliferous ore deposits all
over the world. The Sargodha-
Chiniot-Shahkot-Sangla hill belt
constitutes the northern outcrops of
the Indian shield zone.
The Kirana area spreading over
Sargodha-Chiniot comprises of two
geomorphic features: scattered hills
and flat alluvial plains.
The scattered hills represent meta
sedimentary rocks i.e. quartzite,
slates, tuff etc, and igneous rocks
i.e. rhyolite, andesite and sills/dykes
of basaltic composition
The Kirana Range starts from
Sargodha and travels east passing
through the localities of Lalian,
Chenab Nagar, Rajoa, Sangla Hills &
Shahkot. From here it goes the
earths surface & crosses the
localities of Hafizabad, Sheikhpura,
Lahore & before entering India
where it makes its exposure once
again at Hyderabad Deccan.
These basement rocks are of
magmatic origin and contain
economical proved deposits of
Noble/ Precious Elements, like Gold,
Silver, Platinium, Copper & tungsten.
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
8
plant is estimated to cost $ 150m. In this way the investment works out to US $ 300 per ton of
installed capacity.
Similarly UET will also be asked to design a technology and build a pilot plant to make steel
from Chiniot Iron ore. In both cases PUNJMIN will be asked to provide sample of the ore which
these pilot plants at UET and the private one will convert to steel.
Additionally, samples will be sent to relevant institutes in China and Malaysia with a request to
help identify the most appropriate technology for conversion to steel. These recommendations
together with results of the above pilot plant would help identify the most appropriate and
economic technology for the conversion process.
MARKETING
Karachi based Pakistan Steel and Al Tawarqi are also immediate potential buyers of this high
grade ore. In addition, Punjabs series of induction and electric arc furnaces have shown
interest and willingness to invest in modifying their furnaces to utilize the indigenous ore
(together with a proportion of scrap) instead of pure scrap as at present. One such process is
the oxy cup process that utilizes 10-30% scrap and 70-90% iron ore. Finally there is an
international market for iron ore. .is
ROADMAP FOR MINING
ET has mining, metallurgical and geological engineers. PUNJMIN has the machinery for
drilling. Working
under the overall
supervision of an
international geological/
mining consulting
company, the three should
sit together and develop a
scope of work/ working
plan and TORs for this
scoping study which will be
completed at minimal cost.
Pak Steel Mill will be
encouraged to develop a
suitable technology, in
collaboration with the
PCSIR and other research laboratories, to utilize local iron ore. This can even be done in a win -
U
Roadmap to Extracting Punjab Iron Ore and Conversion to Steel
57.791
500.312
0
100
200
300
400
500
600
India China
ANNUAL STEEL PRODUCTION MT 2008
Million Metric Tons *Source: World Steel Association
win partnership collaboration with the Punjab Government once a
structure is mutually worked out.
CONCLUSION
Steelmaking is a basic industry, and its primary ingredient, iron ore is available in Pakistan. Had
these reserves been developed a few decades earlier, Pakistan t
middle income country with a smaller population
roadmap has been prepared in consultation with the leading
and businessmen mentioned in the acknowledgement earlier. Its implementation by the Pun
Government will lead to noticeably
and greater self reliance and exports.
oadmap to Extracting Punjab Iron Ore and Conversion to Steel
53.625
1
South Korea Pakistan
ANNUAL STEEL PRODUCTION MT 2008
*Source: World Steel Association
partnership collaboration with the Punjab Government once an appropriate
structure is mutually worked out.
, and its primary ingredient, iron ore is available in Pakistan. Had
these reserves been developed a few decades earlier, Pakistan today may well have been a
ncome country with a smaller population and a larger industrial base
roadmap has been prepared in consultation with the leading government and private
and businessmen mentioned in the acknowledgement earlier. Its implementation by the Pun
noticeably improving prosperity, increasing industrial competitiveness,
and greater self reliance and exports.
9
n appropriate transaction
, and its primary ingredient, iron ore is available in Pakistan. Had
oday may well have been a
and a larger industrial base. Now this
government and private experts
and businessmen mentioned in the acknowledgement earlier. Its implementation by the Punjab
industrial competitiveness,

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roadmapforpunjabironore

  • 1. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel Technical and Commercial Strategy Two very distinct large scale reserves have awaited development for decades in this province. The projects have not moved beyond early prospecting stage. The availability of this mineral resource in two separate areas of the province needs to be first authenticated through a detailed bankable geological study, separately in each. This will be followed by development of separate mining strategies for each area and the scale on which mining is anticipated to be undertaken because mining strategies - and associated unit extraction costs - are often scale dependent. Simultaneously, pilot Metallurgical extractive plants and processes need to be developed and subsequently commercialized on a fast track. 2010 Projects Directorate, Punjab Board of Investment & Trade 4/1/2010 Copyright 息2010 - Punjab Board of Investment & Trade
  • 2. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 2 ACKNOWLEDGEMENTS This paper is the result of intensive consultations carried out by PBIT across the range of stakeholders, businessmen and technical experts in the field. These strategic conversations commenced in November 2009 and concluded in March 2010 and the complete transcript of proceedings is available with PBIT. In particular, PBIT would like to acknowledge the invaluable contributions from the following members, without whose help, this study may not have been possible. 1. Mr. Saif Ullah Chattha, Secretary, Mines & Minerals Department, Government of Punjab 2. Mr S. Ishtiaq Hussain, Manager, Mines & Minerals Department, Government of Punjab 3. Mr. Muhammad Aslam, Manager, Mines & Minerals Department, Government of Punjab 4. Mr Nadeem Babar, Chairman, Chief Ministers Task force on Energy 5. Mr. Illyas Cheema, Former Director, NESCOM 6. Dr. Waheed Butt, Chemical Engineering Consultant 7. Mr. Abdul Aziz Chan, Chairman, Rehman Steel Furnace (Pvt.) Lahore 8. Mr. Rehman Aziz Chan, Director, Rehman Steel Furnace (Pvt.) Lahore 9. M. Y. Baig, CEO, IFC 10. Mr. Hammad Baig, Director, IFC 11. Mr. Muhmmad Nasim Riaz, Consultant, IMC 12. Mr. Javed Mughal, Chairman, Mughal Steel 13. Mr. Shakeel Ahmed, General Manager, Mughal Steel 14. Mr. Ahmed Hussain, Chairman, Batala Steel 15. Mr. Tariq Sail, Country Head, Representative of Canadian Investors 16. Mr. Waqqas Asif, Hijveri Construction Company 17. Mr. Malik Anis Akbar, Chairman, Meridian Marketing 18. Mr. Asad Jaleel, Director General, EME (Pvt) Ltd 19. Mr. Sarwar Alam, Director Projects, EME (Pvt) Ltd 20. Mr. Zahoor Ahmed, Director General, Ittefaq Sons (Pvt) Ltd 21. Mr. Ali Akhtar, Principal Consultant, Metallurgicon 22. Mr. Javed Ahmad, CEO, RDC International 23. Dr. Muhammad A. Qazi, Executive Director, PCSIR Lahore 24. Mr. Mahmood Akhtar, Group Director, Nishat Group Moazzam Husain Director General Projects Development Punjab Board of Investment & Trade 23 Aikman Road, GOR I- Lahore moazzam.husain@pbit.gop.pk
  • 3. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 3 INTRODUCTION here are 2 large iron ore reserves located in Punjab. The two have very different geological characteristics. One located in Chichali, near Kalabagh which is low grade iron ore is a surface deposit and other located in Chiniot/ Rajoa which is high grade iron ore under alluvial cover. Given the very different mineralogical compositions of each, a different development roadmap is proposed for each. CHICHIALI RESERVES - HISTORY his deposit is estimated around 500 million tons of low grade iron ore (Fe content 34%) and efforts to develop it are almost as old as Pakistan itself. Initial tests conducted on Chichali iron ore and carried out in USA, Germany and Sweden suggested this ore type is not amenable to physical beneficiation. This was probably because the ore is in fact chemically (as opposed to mechanically) combined with silica and poses a metallurgical challenge. The Krupp-Renn process, a direct reduction process was developed in Germany during the 1930s. By the end of World War II, 38 kilns with an annual capacity of 1 m tons were in operation in several countries. In 1956, PIDC, in consultation with Krupp proposed a Steel Mill based on Chiciali iron ore with a production capacity of 50-70,000 tons of billets to be located at Piran Ghaib near Multan. The proposal was shot down by the Planning Board (predecessor to the Planning Commission) on the grounds that the Krupp - Renn process was not industrially sound and feasible and the scheme was not economically viable. In 1959, the Government retained the services of J.C Austen of the World Bank to chart out a roadmap to develop the Chichiali reserves. His output, led to investigations being assigned to M/S Kellog of USA. Kellog also maintained at the time, that the ore was not suitable for direct reduction and in fact was averse to the Krupp-Renn process. Between 1961 - 63, geological studies sponsored by the United Nations Special Aid Fund confirmed the following deposits: 1. 250 m tons of uniform quality iron ore in one block on both sides of Chichali pass 2. 150 m tons in Kutch, Ghughlan and Makerwal mines Encouraged by this finding, in November 1964, a pilot plant trial was carried out on 1500 tonnes of Chichali iron ore after blending it with high grade imported ore. It was conducted by the Institute de Recherches de la Sierrugi Francaise (IRSID) at a conventional blast furnace at Ougree near Liege, Belgium. The trial suggested this ore could be beneficiated through the Acid T T
  • 4. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 4 Blast Furnace Process. This was further confirmed by a full scale industrial test on 15,000 tons Chichali iron ore at Salzgitter, West Germany in June 1966, which according to international experts was a complete success. As a result of this breakthrough, in August 1967 a German company reportedly offered to set up Kalabagh Steel Mill of over 0.8 million tonnes per year (mtpy) capacity based on Kalabagh iron ore and imported coal at a then estimated cost of Rs. 1.542 billion (including foreign exchange cost of Rs. 878 million). It is claimed that some European banks also offered loans for this project and that PIDC selected a site with about 80% raw materials available within 11 miles but unfortunately, this project was also shelved. In April 1968, President Ayub Khan accepted an offer from Premier Kosygin of USSR, during his visit to Pakistan, for the Kalabagh Steel Mill project. Within a month an agreement was signed between PIDC and M/s Tiajpromexport of Moscow. Subsequently, it transpired that Russia did not have the technology, and could not develop a feasibility to produce steel from the Kalabagh iron ore. Instead of reviving the German offers based on local raw materials, the project was converted into a coastal plant design and transferred to Karachi. Pakistan Steel was established with comparatively inferior machinery and based on imported iron ore and coal. Chichiali iron ore reserves were forgotton. WAY FORWARD CHICHIALI n the aftermath of the Oil shock of 1974, both extraction technologies and energy economics have both travelled a long way. Today presents a new paradigm from the time when earlier engineering efforts were made on Chichiali ore. In the view of present day experts, Chichiali ore would require a 2 stage process: 1) Beneficiation (enrichment) of iron ore and 2) smelting in a blast furnace. Accordingly, this roadmap envisages an onsite mouth of mine beneficiation plant. It will produce beneficiated iron ore for use in integrated steel mills. We propose to materialize this initiative in stages. In terms of specific action steps: 1. Punjab Mineral Development Corporation (PUNJMIN) will be asked to assist in providing drilling/ excavation services to obtain fresh samples of iron ore. The area and excavation will be selected in conjunction with a panel of mining and geological experts from University of Engineering and Technology (UET), Lahore, with whom, preliminary discussions have been held. 2. These samples will then be taken to UET laboratory for complete investigation. 3. Based on these findings, an appropriate metallurgical process and technology will be developed leading to the design of an extractive metallurgical pilot plant. The plant and the extraction process need to be engineered simultaneously and tailored to cater to I
  • 5. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 5 the mineralogical composition of Chichali iron ore. The basic process of beneficiation is physical separation and chemical sintering. Its output is ready-mix charge. 4. On a parallel track, a full blown study will need to be urgently undertaken to re authenticate the reserves and recommend an appropriate, large scale mining methodology. In this, all existing available data will be re examined so that minimal additional drilling and excavation is required. UET has mining, metallurgical and geological engineers. PUNJMIN has the machinery for drilling. Working under the overall supervision of an International geological/ mining consulting company, these three may be asked to develop a scope of work/ working plan and TORs for this scoping study and then implement this at minimum cost and in the shortest possible time. 5. Finally a feasibility study for commercial production will be prepared. PROPOSED ONE BILLION DOLLAR KALABAGH STEEL MILLS PROJECT he successful pilot will be commercialized and in all probability will require the local ore to be blended with high grade imported ore in some proportion. Based on this newly designed process and a bankable study of the reserves, a 1.5m T steel mill in Kalabagh is envisioned. Location: Mouth of Mine Minehead. Water availability, gas, energy, labor access, transport and infrastructure. Size: Minimum 1.5m MT Energy: Approx. 200 MW pulverized coal based captive power plant at mouth of mine located at Makarwal, 20-30 km from beneficiation plant. Water: Available Products/ Byproducts: Beneficiated iron ore. Direct reduced iron (DRI), Pig Iron, Steel, slag cement, tar etc. Infrastructure: This is a capital intensive integrated continuous process plant, 24 x 7, round the year. As such highly skilled manpower such as technicians, engineers and labour will be required and a custom housing colony will need to be developed. The area is already well connected with roads. In addition a railway track to the nearest railhead will be laid so Kalabagh Steel Mills freight wagons can operate under Pakistan Railways open track policy. T
  • 6. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 6 CHINIOT RAJOA RESERVES n the 1970s, OGDC conducted an aeromagnetic survey over the pre Cambrian shield area near Sargodha Chiniot. Subsequently, in 1989 the Geological Survey of Pakistan (GSP) discovered iron ore deposits near Chiniot, in district Jhang after conducting a geophysical survey. Eleven years later, in 1999-2000, PUNJMIN commissioned RDS consultants to carry out a detailed exploration over a small area in which 14 boreholes were dug. Each borehole struck iron ore at depths between 120 160 m below the surface. According to the assessment of this survey, and extrapolations and inferences there from, the following reserves were indicated. 12m MT proven 100m MT estimated 500m MT anticipated The study however stopped short of developing or recommending a mining strategy. I
  • 7. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 7 However, because the iron quality is good (hematite), it has high ferrous content and is therefore of smelting grade, commercial exploitation appears feasible. A detailed techno- economic feasibility study for the wider area (from the earlier PUNJMIN study) must now be undertaken to re authenticate the reserves. The study must also recommend an appropriate, large scale mining methodology. In this, all existing available data will be re examined so that minimal additional drilling and excavation is required. This is a mega mining project. The challenge is to tap the reserve bed which is located beneath a 70-170m alluvial overburden and a water bed. A good reference to follow for a technical solution is the Oilsands project in Alberta Canada. This is a similarly challenging project and based on a methodology termed strip mining from top down and mining is in progress in full swing. WAY FORWARD CHINIOT/ RAJOA o drive this forward one step further, mining samples need to be obtained and a pilot plant set up on immediate basis so that an economical extractive metallurgical process can be devised for commercial production. A private steelmaker/ fabricator has proposed to build a pilot plant based on the new ITmK3 technology. This initiative is being encouraged by PBIT and the Department of Mines and Minerals. The ITmK3 process uses a rotary hearth furnace in which fine iron ore is reduced using pulverized coal. It requires less energy, low capital and O & M costs. Recently, in Minnesota, a pilot demonstration plant of 25,000 tons per year capacity cost $ 16m to build and has completed successful trials. A 500,000 ton Commercial T T The Geology of the Indian Shield Zone Pre-Cambrian basement rocks are considered important source rocks for metalliferous ore deposits all over the world. The Sargodha- Chiniot-Shahkot-Sangla hill belt constitutes the northern outcrops of the Indian shield zone. The Kirana area spreading over Sargodha-Chiniot comprises of two geomorphic features: scattered hills and flat alluvial plains. The scattered hills represent meta sedimentary rocks i.e. quartzite, slates, tuff etc, and igneous rocks i.e. rhyolite, andesite and sills/dykes of basaltic composition The Kirana Range starts from Sargodha and travels east passing through the localities of Lalian, Chenab Nagar, Rajoa, Sangla Hills & Shahkot. From here it goes the earths surface & crosses the localities of Hafizabad, Sheikhpura, Lahore & before entering India where it makes its exposure once again at Hyderabad Deccan. These basement rocks are of magmatic origin and contain economical proved deposits of Noble/ Precious Elements, like Gold, Silver, Platinium, Copper & tungsten.
  • 8. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 8 plant is estimated to cost $ 150m. In this way the investment works out to US $ 300 per ton of installed capacity. Similarly UET will also be asked to design a technology and build a pilot plant to make steel from Chiniot Iron ore. In both cases PUNJMIN will be asked to provide sample of the ore which these pilot plants at UET and the private one will convert to steel. Additionally, samples will be sent to relevant institutes in China and Malaysia with a request to help identify the most appropriate technology for conversion to steel. These recommendations together with results of the above pilot plant would help identify the most appropriate and economic technology for the conversion process. MARKETING Karachi based Pakistan Steel and Al Tawarqi are also immediate potential buyers of this high grade ore. In addition, Punjabs series of induction and electric arc furnaces have shown interest and willingness to invest in modifying their furnaces to utilize the indigenous ore (together with a proportion of scrap) instead of pure scrap as at present. One such process is the oxy cup process that utilizes 10-30% scrap and 70-90% iron ore. Finally there is an international market for iron ore. .is ROADMAP FOR MINING ET has mining, metallurgical and geological engineers. PUNJMIN has the machinery for drilling. Working under the overall supervision of an international geological/ mining consulting company, the three should sit together and develop a scope of work/ working plan and TORs for this scoping study which will be completed at minimal cost. Pak Steel Mill will be encouraged to develop a suitable technology, in collaboration with the PCSIR and other research laboratories, to utilize local iron ore. This can even be done in a win - U
  • 9. Roadmap to Extracting Punjab Iron Ore and Conversion to Steel 57.791 500.312 0 100 200 300 400 500 600 India China ANNUAL STEEL PRODUCTION MT 2008 Million Metric Tons *Source: World Steel Association win partnership collaboration with the Punjab Government once a structure is mutually worked out. CONCLUSION Steelmaking is a basic industry, and its primary ingredient, iron ore is available in Pakistan. Had these reserves been developed a few decades earlier, Pakistan t middle income country with a smaller population roadmap has been prepared in consultation with the leading and businessmen mentioned in the acknowledgement earlier. Its implementation by the Pun Government will lead to noticeably and greater self reliance and exports. oadmap to Extracting Punjab Iron Ore and Conversion to Steel 53.625 1 South Korea Pakistan ANNUAL STEEL PRODUCTION MT 2008 *Source: World Steel Association partnership collaboration with the Punjab Government once an appropriate structure is mutually worked out. , and its primary ingredient, iron ore is available in Pakistan. Had these reserves been developed a few decades earlier, Pakistan today may well have been a ncome country with a smaller population and a larger industrial base roadmap has been prepared in consultation with the leading government and private and businessmen mentioned in the acknowledgement earlier. Its implementation by the Pun noticeably improving prosperity, increasing industrial competitiveness, and greater self reliance and exports. 9 n appropriate transaction , and its primary ingredient, iron ore is available in Pakistan. Had oday may well have been a and a larger industrial base. Now this government and private experts and businessmen mentioned in the acknowledgement earlier. Its implementation by the Punjab industrial competitiveness,