Mining Reforms Pakistan

Introduction

Mining is a crucial industry in Pakistan, but one which faces a host of challenges. Regional and national governments are working to improve the regulatory and operational landscape for miners and mining companies, but with regional instability and illegal mining pervasive a history of corruption and illegal mining has deterred international investment in the mining industry. Globally, mining has a long history of operating in dangerous and underdeveloped areas, but the insecurity of assets in Pakistan continues to deter many companies from investing. Extraction of major minerals (except oil and gas) is presented as follows:

(000 tonnes)
Minerals	Magne-	Rock	Ochre	Sulphur	Soap	Baryte	Bauxite/	Iron
in 000 tonnes	site (tonnes)	Salt	(tonnes)	(tonnes)	Stone		Laterite (tonnes)	Ore (tonnes)
Reserves		Over 100		0.8	0.6	5	Over 74	Over 430
Quantity		million	..	million	million	million	million	million
		tonnes		tonnes	tonnes	tonnes	tonnes	tonnes
Years
2000-01	4,645	1,394	4,691	17,428	47	28	35,114	24,765
2001-02	4,637	1,423	5,064	22,580	39	21	37,182	4,942
2002-03	2,645	1,426	6,733	19,402	66	41	67,536	11,483
2003-04	6,074	1,640	7,861	23,873	53	44	88,044	84,946
2004-05	3,029	1,648	18,686	24,158	21	42	78,288	104,278
2005-06	1,161	1,859	34,320	24,695	21	52	60,370	131,259
2006-07	3,445	1,873	61,665	27,710	45	47	150,842	150,695
2007-08	3,940	1,849	46,215	29,485	38	54	174,223	286,255
2008-09	2,639	1,917	56,617	25,784	14	63	137,485	320,214
2009-10	5,159	1,944	55,352	26,641	54	57	190,077	447,541
2010-11	4,908	1,954	36,078	27,645	48	32	308,027	329,100
2011-12	5,444	2,136	42,107	25,560	56	49	323,848	384,893
2012-13	6,705	2,160	37,769	20,610	93	118	353,355	412,108
2013-14	4,130	2,220	32,634	35,672	89	134	480,054	197,074
2014-15	4,581	2,136	33,909	19,730	116	205	451,818	328,702
2015-16	35,228	3,553	68,352	14,869	125	158	772,692	432,156
Jul-Feb
2015-16	26,997	2,386	38,402	8,507	89	115	529,730	275,152
2016-17 P	13,794	2,347	61,548	15,288	87	39	485,071	330,089

Pakistan is a resource-wealthy country with large quantities of coal, iron and copper, as well as gold and gemstones. Currently, Pakistan hosts the world’s second-largest coal deposits with as much as 185 billion tonnes, as well as being the third-largest producer of iron ore pigments. The resource potential is presented as follows:

Resource Potential

Mineral	Reserve (In million Tons)	Grade
Baryte	14	Medium
Fire clay	Over 100	Medium to Good
Fuller’s earth	430	Medium to Good
Granite	Very Large	Medium to Good
Gypsum	4,850	Medium to Good
Limestone	Very Large	Good to very Good
Magnesite	Over 12	Medium to Good
Marble	Very Large	Good to Very Good
Phosphate	7	Medium to Good
Red Oxide	100	Medium to Good
Rock Salt	Very Large (Over 5 billion tons)	Good to Very Good
Silica Sand	20	Good to Very Good

Pakistan has only begun to scratch the surface of its resource potential. The last few years have seen large mineral deposits being unearthed, including an iron ore body in the central province of Punjab. This discovery, announced in 2015, reportedly contains an estimated 500 million tonnes (Mt) of iron ore and is owned by the Metallurgical Corporation of China. Present mining activity is presented as follows:

Sector snapshot

Category	Mineral	Annual production
Energy producing (2011-12)	Coal	3.45 million tons
	Natural Gas	4,031.76 Mmcfd
	Crude Oil	65,866.18 BOPD
Metallic minerals (2005-06) 1	Copper ore	5.1 million tons
	Iron	131,259 metric tons
	Flourite	1,966 metric tons
	Bauxite	7,831 metric tons
	Chromite	64,572 metric toms
Non- metallic minerals (2005-06)	Rock Salt	1.85 million tons
	Gypsum	601,027 tons
	Silica sand	411,047 metric tons
	Limestone	18.42 million tons
Building stones	Marble	1.83 million tons
Building stones	Granite	8,657 metric tons

The mining industry in Pakistan is possibly one of the most unregulated in Pakistan’s economy despite its considerable contribution to the GDP, estimated to be at three percent. In terms of coal reserves, while the recent discovery of the coalfield in Thar is currently being celebrated as the answer to Pakistan’s energy crisis, the country has a number of reserves of coal in different parts of the country that have been mined for generations. In Sindh, coal has been found in Thar, Lakhra, Sandra Jherruck, Meting Jhimpir, Indus East and Badin; in Balochistan in the Sor Range/Degari, Khost, Mach and Duki; in Punjab the Salt Range, and Makarwal; in Khyber Pakhtunkhwa Cherat and Hungu, and in Azad Kashmir in Kotli. In Punjab alone, there are 2,600 registered mines, and in Duki alone there are more than 380. However, the industry is characterized by fragmented ownership. Mining of major minerals is presented as follows:

Mining of major mineraks us oresented as followsMinerals	Unit of Quantity	2014-15	2015-16	2016-17	% Change FY17/FY16
Coal	M.T	3,406,851	3,749,312	4,605,807	22.84
Natural Gas	MMCFT	1,465,759	1,481,551	1,480,092	-0.10
Crude Oil	US B(000)	34,490	31,652	32,258	1.91
Chromite	M.T	100,516	69,333	98,882	42.62
Magnesite	M.T	4,611	35,228	14,890	-57.73
Dolomite	M.T	223,117	716,611	423,296	-40.93
Gypsum	M.T	1,417,007	1,871,716	2,109,152	12.69
Lime Stone	M.T	39,819,401	48,296,551	52,386,080	8.47
Rock Salt	M.T	2,136,361	3,552,984	3,491,691	-1.73
Sulphur	M.T	19,730	14,869	23,080	55.22
Barytes	M.T	118,568	157,407	42,506	-73.00
Calcite	M.T	1,694	1,610	3,837	138.32
Soap Stone	M.T	100,724	125,330	117,668	-6.11
Marble	M.T	2,520,170	4,748,715	6,179,867	30.14
Bauxite	M.T	24,689	57,024	123,316	116.25
Quartz	M.T	38,016	88,171	104,645	18.68
Ocher	M.T	33,909	68,352	109,550	60.27
Source: Pakistan Bureau of Statistics (PBS)

While there are government and privately owned and operated coal mines in Pakistan, there are also many individual, and sometimes illegal, owners of coal mines, which means that there is limited information regarding the number of mines operating in the country, and even more limited information regarding the labor involved in these mines. The potential of major metals is presented as follows:

Potential major metals

Mineral	Reserve (In million Tons)	Grade
Baryte	14	Medium
Fire clay	Over 100	Medium to Good
Fuller’s earth	430	Medium to Good
Granite	Very Large	Medium to Good
Gypsum	4,850	Medium to Good
Limestone	Very Large	Good to very Good
Magnesite	Over 12	Medium to Good
Marble	Very Large	Good to Very Good
Phosphate	7	Medium to Good
Red Oxide	100	Medium to Good
Rock Salt	Very Large (Over 5 billion tons)	Good to Very Good
Silica Sand	20	Good to Very Good

Mining shortcomings

Pakistan’s rich source of non-metallic minerals including coal and gemstones are mined by hundreds of small- and medium-size mining groups. Working conditions of mine workers, particularly coal mines, are very poor. The severe lack of safety measures in these mines cause widespread deaths every year. Government agencies have not been able to stop accidents because of very poor physical and technical standards observed by small and medium mines. Added to which the equipment is considered obsolete by modern standards.

Neither the government nor the coal mines` owners have paid heed to the vulnerability of miners. Although it is a risky job, coal miners earn scant salaries. They are given Rs1,200 per week. ‘There is no bonus Quetta`s Daily Azadi newspaper reports that scholarships allocated for the children of labourers have been embezzled.

Chief Inspector holds the coal miners responsible for the accidents. Coal miners start digging without inspection, which result in these incidents.` coal miners entering the mines and starting to pump water, as a result of which cracks appear that emit gas.

The labour department reportedly receives millions of rupees from the Mach coal mines yet the government entity doesn`t even have a footprint here. `When there is an accident, the labor department is silent; there are no doctors and other health facilities. Coal miners don`t have access to schools for their children, either, or places to live.”

The office of the Inspectorate of Mines in Mach, claims that “the owners of coal mines don`t care about their workers. We took 20 companies to court for criminal negligence and they were charged Rs10,000 to 20,000 only. In 2016, they were sent legal notices but nothing much has changed. We also provide first aid to coal miners when needed”.

Miners , however say that `We get nothing from them. The inspector comes only after accidents. Coal miners dying is a decision that is not in our hands. We can do nothing but we`d like to make a humble plea to the provincial government that families ought to be compensated when tragedies occur. Too often, even if compensation is announced, it gets embezzled”

Mining of Coal Technical Issues in Pakistan

Lack of mining equipment and machinery

With just one operational international mine in Pakistan (Saindak) and the Thar coal fields in Sindh, a mining equipment industry has not developed on a large scale in Pakistan. International exploration (junior mining) and mining companies have to employ foreign drilling contractors from Australia, EU or North America to perform exploration drilling for projects, as no in-country contractors are generally available with the expertise or equipment to perform the required exploration work. For mine development and operation, most of the stationary processing plant equipment as well as the mobile fleet for ore handling need to be imported, since such types of Equipment have not been used in Pakistan (although Saindak has some imported equipment of this type) prior to international size mining operations taking place in Pakistan.

Thar coal mining has been handled well, using large equipment and transport to move large amounts of scrapped soil, the effort is about to make operational the first mine, , there are however concerns raised on the choice of machinery which has resulted in higher mining costs that elsewhere in the world e

Locally available facilities include remote sensing operations and small drilling operators. Pakistan surveying organizations such as the Geological Research Institute (GRI) based in Lahore perform remote sensing operations, and drilling companies and Punjmin perform the hydrogeology drilling in search of water required for mining operations.

There are opportunities for local companies in mining operations in such areas as drilling, chemical reagents, steel for balls in the mills, cement, light vehicles, etc. However, other companies with technologies and skills not currently in operation in Pakistan will be required when international companies start mining operations in Pakistan.

Since mining operations are not highly mechanized and the process is slow there is not too much dust .Mining labor is migratory therefore the health effect is intermittent. The major causes of accidents (in Baluchistan) have been cave-ins and ground falls. This causes about 50% of the accidents, about 30-60 per year for a work force if 31000. Haulage and transportation is the next major cause of accidents, especially in the Punjab. Up to 15% accidents were a result of transportation and haulage. In Punjab 131 fatal accidents were reported in this regard during the period 1969 to 1993.

.Miners complains “We are not given any safety equipment. Our manager comes here once a month, although it`s his duty to take care of the workers and come here regularly. He`s supposed to inspect the coal mine every day before letting us in, but that doesn`t happen either.”

The mining industry in Pakistan is possibly one of the most unregulated in Pakistan’s economy. There are no discernible rules for how a mine can be run, what qualifications a contractor must meet before obtaining permission, and what safety training must be given to workers. All around the world, extraordinary care is taken by mining companies to ensure that no open flame is allowed anywhere near a coalmine, let alone inside it. But here it is common to see kerosene lanterns being used to light up mining shafts. This is just one example of the hazards to which workers are routinely exposed. There is, of course, hardly any concept of compensation that must be paid in the event of the death of or injury to miners. The sector is one of the most dangerous in Pakistan, and provincial governments need to give more attention to it.

The government at Lakhra has been taxing coal at Rs475 per tonne from the contractors. But the only rescue centre established years ago by the Sindh government have been shut for a long time, while the hospital is dysfunctional, too. “If there is an accident, or any other health issue, we have to take laborers to Hyderabad,” explains a miner’s representative.

The mine itself is a different world. Laborers — 18 in one particular part of the mine — are cutting coal. Despite the dangerous work they are doing, there are no safety precautions. Some are digging up coal, while others put it in sacks.

Meanwhile, Abid Yaar says that about 100 labourers have died from just his Pirabad village because of lung disease. “You can imagine how high the number is for all the 28 union councils of Shangla,” he says.

Even so, the mines in Hyderabad are slightly better off in terms of safety compared to those in the other provinces. “Around 200 laborers die every year because of gas leakage, explosion, coal blasting, and the lack of safety,” says , general secretary of the Pakistan Mine Workers’ Federation (PMWF). “The safety laws have not been implemented, while mine inspectors and supervisors are not performing well.”

According to the PMWF, deadly incidents have increased during the last eight years but mine authorities are still unwilling to close them down. “In 2012, at the Quetta sewerage line mine, incident 43 labourers — all hailing from Shangla — were killed, and dozens others were permanently disabled Most of them were from the same family.”

Today, there are around 270,000 miners working in mines across the country, most of them without any safety. For families such there is still someone to feed their children. But hundreds of families have lost all their breadwinners

The rights of Pakistani coal miners

As well as being signatory to a number of global treaties on human rights relating to labour, Pakistan has four national level laws related to health, safety and welfare of workers engaged in mining and quarrying, specifically the Mines Act 1923, Mines Maternity Benefits Act 1941, Coal Mines (Fixation of Rates and Wages) Ordinance 1960, and the Excise Duty on Mineral (Labour) Welfare Act 1967. However, due to a lack of implementation of these laws and the unregulated nature of the mining industry, between January 2010 and March 2016, over 228 miners have been killed in mining accidents in Pakistan, with limited data on the number of injured people in these incidents. This is coupled with numerous health considerations; a study of Pakistani miners health in Cherat, Nowshera district states that 71 percent of miners suffer from respiratory health issues, whilst 49.5 percent have pneumoconiosis (Journal of Postgraduate Medicine Institute).

Many of these coal miners are ethnic Pashtuns, and since most of Pakistan’s coal is situated in Sindh and Balochistan, these workers, including children in some cases, migrate far from their homes from rural Khyber Pakhtunkhwa to earn a living. However, a 2015 study on the State of Human Rights stated that a large number of miners, according to the Pakistan Standard of Living Measurement survey, earned less than the minimum wage per month, which is Rs 13,154, while 41.31 percent of workers earned between Rs. 5,000 and 10,000 per month.

Working mostly in poorly developed coalmines, and due to the use of outdated procedures, rudimentary or inefficient manual and semi-mechanised mining methods workers are exposed to the risk of fatal and non-fatal accidents. In February 2015, eight miners were killed and 14 injured when a coalmine in Dukki, Loralai, collapsed after a methane gas explosion. While a senior official at the time claimed that a mines inspector had already warned the coalmine owner that there was a high concentration of methane in the mine that could lead to a deadly incident, it is unknown why the mine was not shut down as soon as that was discovered. Similarly, during an inspection by the Chief Inspectorate of Mines of the 2,600 mines in the Punjab, where 784 inspections had been conducted, it was discovered that mine workers were not provided with even basic protective gear. Accommodation provided to mine workers is also usually of substandard quality, as is the occasional healthcare.

Besides industrial accidents, coal miners have also been plagued by acts of violence. In January 2015, unknown armed men kidnapped five miners from a coalmine operated by the Pakistan Minerals Development Corporation in Sor Range, near Quetta. Moreover, 23 workers were arrested from the Lakhra coalmines during a campaign against illegal immigrants under Pakistan’s National Action Plan. It is clear that not only are owners of coalmines failing to protect the rights of their workers — be it health, safety and security — but also that government is failing to adequately inspect and take action against unsafe practices in the industry.

The build-up to the COP 21 in Paris last year, as well as at the conference itself, saw what might be one of the largest movements of human rights activists advocating for the inclusion of human rights into the final text of the agreement. The final text was disappointing for most advocates of human rights, who feel that it does not adequately address concerns raised by civil society and indigenous communities on how the changing climate will impact their basic human rights, particularly those relating to health, access to resources and clean water, among others. Although many countries have pledged to divest from coal, few have linked their continued investment in coal with human rights, particularly of the labour involved in mining. The arguments supporting divestment from coal in Pakistan are no longer confined to just the climate implications but also human rights.

As a first step, it is crucial for Pakistan to commit to and ratify the ILO’s Safety and Health in Mines Convention 1995, as well as following the 2006 ILO Code on Safety and Health in underground Coal Mines. Government must also commit to a more stringent and thorough implementation of the existing policies relating to mining in Pakistan, including stricter inspections by qualified inspectors and ensuring that minimum wage is met. Action must be taken against those who are not ensuring the safety of their workers, whilst the LEAs must support the industry in the prevention of violence against its workers.

As Pakistan races towards the finish line in developing its mega coal plant in Thar, under the China Pakistan Economic Corridor, there is little hope that it will reconsider the projects based on its impacts on the climate and potential impacts on human rights. While the developers of coal plants have promised to generate employment through the construction of these coalmines and then through the extraction process of the coal, not enough attention has been paid to the conditions in which these workers will be working. The project is already being criticised as many feel that China is simply offloading its outdated technologies to Pakistan. Whether or not that is the case, the time is right for Pakistani human rights activists to push for better conditions for mine workers in Thar.

Lakra

Lakra coal exists all over the 110-kilometre area of Lakhra and around 10,000 tonnes of coal is sent daily from Lakhra to Punjab and other parts of the country; 35 companies are working there. In one mine at a time, some 15 to 20 laborers are at work. Each earns between Rs2,500 and Rs5,000 daily. While Sindh is the largest coal producer, Balochistan follows close behind, and after that is Khyber Pakhtunkhwa and Fata.

Mining accidents and deaths

Details of various mining accidents, from press releases, are randomly presented as follows:

. Previous record of last five years was suggesting that 04 deaths happened due to roof fall, 03 fatalities occurred through suffocation by inhaling toxic gases, one causality happened via rope haulage pulley, and also one death due to stone fall down from mine shaft. 121 workers injured in different kinds of accidents within five years. It has been learnt from in-depth analysis that maximum of health risk and subsequent health damages are triggering due to lack of awareness, non-compliance of labor as well as mines laws. Thus, it is recommended that government should not allow coal mining contractors and companies, those which are failing in compliance with the suggested standards.

, coal miners die from poisonous gas. In Mach, the mountains are weak coal miners die because of avalanches, or are suffocated by gas.

Recently, three coal miners died because of gas suffocation in Harnai district. A local leader of the coal miner’s informal association, says that as many as 80 miners die annually in the province.

Miners’ deaths in coal mines and the dangerous work they do are nothing new. Most of Shangla sends its men as coal miners to different places in Punjab, Sindh and Balochistan.

This is not the first time that we are seeing miners die in a coalmine accident, in this case in the Sanjdi area of Balochistan. Neither, unfortunately, will this be the last such incident. After a three-day rescue effort launched largely by volunteers, the bodies of all 13 workers in the hellish mine have been retrieved; two rescue volunteers also died of suffocation while trying to retrieve the bodies, bringing the total death count to 15. Like all those who have lost their lives in previous mining accidents in the country, the dead coalminers and rescuers will now be forever a statistic. And there have been many over the years who still lie buried in the mines after an accident.

Such fatalities are becoming far too common now, and perhaps it is time to place some sort of a ban on mining if contractors cannot put in place proper security procedures. In the latest instance, the explosion that caused large sections of the mine to collapse, burying the workers inside was triggered by a pocket of methane gas. In fact, this is a common trigger for such accidents but not the only one. Yet despite numerous such incidents,

8 13 2108

Police in Pakistan say a methane gas explosion in a coal mine has killed at least four miners and trapped 13 others. Local police official Wajeet Khan says the blast happened Sunday in the village of Sanjdi, about 50 kilometers (30 miles) east of Quetta. He says rescuers have retrieved four bodies and that 13 other miners are missing and feared dead, with rescue operations hindered by the gas leak. Cave-ins and other mining accidents in Pakistan are often attributed to the poor enforcement of safety regulations.

Rehmatullah’s death occurred last month, but by early May, around 25 people were killed in a mine in Quetta; many others were injured. Of the deceased, 16 were from the Zara village of Alpuri Shangla. And earlier, in April, coal mine labourers from Shangla lost their lives while eight were injured in two separate incidents at Darra Adam Khel, Fata, and in Jhelum, Punjab.

“Every month, the people of Shangla receive the bodies of their loved ones because about 70 per cent of the coal miners belong to this area,” says Abid Yar, an activist working on coal mine labourers’ welfare.

A total of 16 person were trapped after a gas explosion in Pir Ismail, Marwar (45 km from Quetta) at around noon. Their bodies were later recovered after hours-long rescue operation. The Quetta deputy commissioner, Provincial Disaster Management Authority (PDMA) rescue team, local labourers, the inspector mines, Frontier Corps (FC) personnel and District Administration Levies force QRF were also present at the site.

Two killed, five still trapped at PMDC mine in Quetta

Meanwhile, rescue sources say nine more workers were reportedly trapped in another mine due to gas inhalation at the Pakistan Mineral Development Corporation (PMDC) mine in Quetta.

Two bodies have been recovered and as many injured labourers evacuated, they said, adding that at least five more miners were still trapped in the mine.Rescue efforts were underway.

Illegal Mining

A moratorium on mining excavation in the northern Khyber Pakhtunkhwa province was introduced eight years ago, but this has been repealed by an ordinance in August 2016. The ordinance brings in a series of regulations that the local government claims will increase international investment, but some have reacted with anger. The province, which has been plagued by illegal mining, highlights the widespread problems affecting the country as a whole.

Illegal mining has flourished in Khyber Pakhtunkhwa since the ban; as legitimate mining efforts have ceased, mafia groups and other gangs have taken over. Global Data head of research and analysis for mining Clifford Smee says the mafia’s presence is unsurprising, as “mining needs a somewhat sophisticated organisation to successfully operate”.

“Illegal mining is always an issue in developing countries, We see large illegal mining in major producing countries such as Indonesia (100Mt of coal is illegally mined), and we have seen issues with illegal mining in neighboring India.”

“Typically, illegal mining flourishes in periods of high prices, such as the high coal and iron ore prices which drove illegal mining of these commodities in South East Asia during the Chinese mining super cycle,” .

Khyber Pakhtunkhwa is an area rich in gems and semiprecious stones, with Swat alone boasting 70 million carats of emerald reserves. The Mardan district has nine million carats of pink topaz reserves while Kohistan has ten million carats of peridot, all of which are currently being illegally traded by organised gangs.

The presence of illegal mining has been facilitated by corruption within the government. There have been a string of scandals involving government officials being arrested for profiting from mining. Both former Mining Minister Ziaullah Afridi and director general of the Directorate of Mines and Minerals Dr Liaquat Ali were arrested in 2015 for misuse of power, allowing illegal mining and misappropriation of millions of rupees in profit. Such arrests have not only hampered the legitimacy of the government’s offensive against illegal mining but also led to in-fighting within political parties.

The ordinance in Khyber Pakhtunkhwa will lift the ban on mining, but will also bring into effect new regulations to manage the industry. These will include truck checks at mine sites rather than on the road in order to streamline the process, and provision of heavy and modern machinery by the local government to minimize waste.

Khyber Pakhtunkhwa’s ex Chief Minister Pervez Khattak presented the ordinance and its terms at a conference in 20 17 “We also amended rules to improve [the] existing system and it will enhance our province’s revenue up to Rs2bn [from] Rs1.2bn,” he said.

The economic benefits of a strong mining industry are crucial to Pakistan as fuel for its ongoing development, but it must first overcome its reputation as a dangerous investment.

“Pakistan is viewed as a high-risk country, and mining companies and equity are wary of investing in developing countries,Two examples being Mozambique and Mongolia, in which Rio Tinto and other western companies have experienced difficulties.”

MINERAL POLICY AND REGULATIONS

National Mineral Policy

The implementation of the First National Mineral Policy (NMP 1995) at both Federal and Provincial levels paved the way for an expansion of mining sector activity in Pakistan. The implementation, as well, proved to be a pivotal step toward attracting investment in the mining sector. Although the mining sector currently contributes less than 1% to Pakistan’s GDP, recent discoveries have provided strong evidence of significant mineral deposits and a great potential for the sector to contribute to the national and local economies.

Pakistan has a large base of industrial minerals, and the growing interest from international mining companies carries great potential for the rapid development of the sector. As the government is looking to enhance the contribution of the mining sector to Pakistan’s economic development, it becomes even more imperative for the Policy to reflect developments in the global mining sector since 1995, including legal, fiscal and environmental developments.

In view of these developments, a review of the NMP became necessary in order to ensure its alignment with contemporary practices, and enhance the international competitiveness of Pakistan’s mining sector.

The main challenges the new National Mineral Policy (NMP-2) seeks to address revolve around the following five broad themes:

· Increasing the economic contribution of the mining sector to Pakistan’s economy by attracting more private investment;

Being competitive for scarce and mobile international capital for investment in the mining sector through a stable and enabling environment;

· Ensuring smooth operational and effective coordination between Federal and Provincial institutions in the implementation of the regulatory and legislative regime for the mining sector;

· Ensuring that the exploration for, and development and production of, Pakistan’s mineral resources are environmentally sustainable; and

· Encouraging small scale mining and local private participation in the development of the sector.

The new policy is intended to serve as a clear and detailed representation of governments’ objective of improving the international competitiveness of the mineral sector in Pakistan. NMP-2 seeks to provide the basis for addressing these and other challenges, as well as responding to important government priorities and commitments. For example, policy provisions to cater for research and development, human resource development, as well as promotion and marketing, are included in NMP-2.

The main features of the policy are highlighted below.

Section 1 defines the objectives of the NMP-2 as follow:

i) Enhancement and sustenance of revenue flow to the Provincial and Federal Governments.

ii) Creation of an investment-friendly climate to enhance Pakistan’s international competitiveness;

iii) Optimization of exploration, development and exploitation

of minerals;

iv) Mitigation of adverse environmental effects of mineral development;

v) Generation of mass scale employment and socio-economic

vi) uplift through enhanced skills, sustainable mineral development, technology transfer and regional infrastructure development; Administrative restructuring of relevant federal and provincial mineral sectors;

vii) Generation of geological data, development of a national Cadastre and provision of online accessibility to such data; and

viii) Ensuring safe mining operations and safety and security of investors.

In addition to defining the federal and provincial jurisdictions and their respected roles and responsibilities, in addition to various administrative mechanisms, to promote the mineral and mining section, the NMP-2 provides the necessary

Evidently, the goal is to create a business friendly environment in which potential investors are helped to make informed decisions as related to the laws and regulations governing the mineral titles, licenses, lease agreements, environmental protection obligations, taxes and royalties.

An important feature of the policy is the recognition of the need to promote research and development and to undertake detailed geological survey of Pakistan as well as creating the Geo-Data Bank of Pakistan

Regulatory Regime

Grant and management of mining concessions in Pakistan are regulated by the Regulation of Mines & Oil-fields and Mineral Development (Government Control) Act, 1948 and the related rules made under the Act. The Act and the rules are the main instruments of administration, compliance and dispute resolution in respect of Pakistan minerals.

There is substantial scope for improving the regulatory environment. For example, variances between formal leases and traditional land rights, based on communal holdings, are a source of uncertainty, as is the need for security clearances in some areas. A key requirement to attract investment in mining is the provision of geo-data at the precompetitive stage. Pursuant to the NMP, this involves the government carrying out surveys and systematically compiling geo- data from existing operators. Several agencies have been engaged in geological mapping and exploration, including the GSP. Accessing the findings, however, is difficult.

Under the GB Mineral Concession Rules, the DoMD grants licenses and leases upon the recommendations of a Mines Committee and Sub-Committee. In the absence of other services, this is the core function of the department. However, the needed committees have not been constituted, and applications are processed by the Deputy Director and granted with the approval of the Chief Secretary. This is in contravention of the rules and coupled with weak accountability mechanisms, the scope for malpractice is unduly hi

Steps needed to reform mining Sector

For mining to reach its potential in Pakistan, the government must quash illegal mining and secure international investments. Previous efforts have been made with varied levels of success, and last year, five key figures were arrested at the outset of a renewed crackdown on illegal mining.

Across Pakistan incentives are being created to promote international investment in mining. In Punjab, Minister for Mines & Minerals Chaudhry Sher Ali Khan has introduced reforms that will increase royalties on certain minerals, as well as revise application fees and rents. These changes are designed to encourage international investment in particular and may be seen in other provinces, such as neighbouring Khyber Pakhtunkhwa, should they prove successful.

Despite efforts to increase investment and tackle gangs, there are still many hurdles to overcome, not the least of which is how to win over the mining companies at home and internationally. “The government is responsible for the current illegal mining of precious gems and semi-precious stones and other minerals as the ban slapped in 2008 encouraged organised gangs to continue their illegal business,” Frontier Mine Owners’ Association (FMOA) president Sher Bandi Khan Marwat told The Express Tribune at the end of last year.

The eight-year ban has taken its toll upon Khyber Pakhtunkhwa and the government is often blamed for allowing the mafia to become so well-established. A shift to legal mining will be challenging and the ordinance has not necessarily made it easy. For instance, the FMOA’s Khyber Pakhtunkhwa branch has claimed that, of the 1,300 mines in the province, 80% are on the verge of collapse.

Also, regulations brought in by the ordinance are being called unworkable by mining companies in the Khyber Pakhtunkhwa area, which has led the FMOA to obtain a stay order from the high court. With competition from illegal mining gangs, conforming to the regulations is impossible and puts off foreign investment, argues the FMOA.

The government has argued that the ordinance’s sanctions are designed to remove the monopoly of mining companies and benefit the province as a whole. Whether or not this is possible, an agreement will need to be reached between the government and mining firms for the benefit of Khyber Pakhtunkhwa. In any case, it seems that illegal mining will need to be significantly curtailed for the new regulations to be effective and to avoid putting the cart before the horse.

Pakistan’s mining future remains hampered by insecurity, but as provinces such as Punjab instigate effective regulations and gain international investment, the industry’s prospects are brightening. Its success remains dependent on the ability of the government to deter, rather than enable, illegal mining operations in the country.

Aid Agency Support requirements

The international development organizations in Pakistan are unanimous that a more aggressive development of mining sector would be pivotal to economic growth and prosperity.To be effective, a mining development plan is dependent upon a number of prerequisites, namely:

· A national mineral policy that helps create a business friendly atmosphere, promotes an environmentally responsible mining practices, encourages technology and human resources development;

· A legal system, and the subordinate regulations and administrative bodies, that ensures the rights of all parties are clearly defined and protected;

· An adequate infrastructure consisting of transportation and communication systems, health and other civic services and facilities; and

· An able bureaucracy that facilitates, rather than inhibiting, economic activities.

Pakistan needs the development community’s assistance in all four points mentioned above, which translates into a need to undertake a comprehensive, integrated approach to mining development in Pakistan. Such an approach encompasses all sectors of the economy, and if managed effectively, the mining sector would jumpstart an economic growth and prosperity unprecedented in Pakistan. The focus of the development organizations is on capacity building and technical assistance.

A review of recent policy documents of government of Pakistan (GoP), demonstrates that GoP is conscious of the need to address the issues enumerated above expeditiously. Although the Planning Commission of GoP did not specifically address the mining sector, presumably to avoid crossing the federal/provincial jurisdictional boundaries, in discussing every sector, the need to create a business friendly environment has been emphasized. In every sector, from agriculture to manufacturing to service sectors the shortcomings of the status quo are common as above. The donors’ support, solicited in this paper, not only would be beneficial to the mining sector, but also will contribute to other sectors of the economy. In addition, it will contribute to improvement of the capacity of federal and provincial governments. At the provincial level, the study group has witnessed the government officials’ commitment to address those shortcomings as an unavoidable prerequisite to bring the mining industry in Pakistan to international standards with all its potential economic and social benefits.

The following table captures the specific areas, discussed in this paper, that need to be addressed by the donors’ community.

Technical assistance requirements of various governments are as follows

S. #	Province / Federating Unit	Major Minerals Potential (Million Tons)	Requirements
1.	Federal Government	---	Technical assistance for national Cadastre and national mineral development plan. Assistance for institutional capacity building of federal agencies through short and long term training courses and logistic support. Details already provided in the meeting dated 05.4.2012. Technical assistance to attract investors and prepare for international events; Technical assistance to advance the economic, environmental and social conditions considering the cultural factors of mining communities.
2.	A.J.& K.	Gemstone (Ruby: 200 million crt) Marble (2000), Coal (9)	Capacity building through short and long term training courses and logistic support. Technical assistance for evaluation of gemstone potential
3.	Balochistan	Copper-gold (6000) Chromite (1.88) Lead-zinc (23) Marble & Granite (Above 500) Iron Ore (335), Coal (217)	Capacity building through short and long term training courses. Technical assistance in form of expert to upgrade mining concession rules. Institutional capacity building of Directorate General Mines & Minerals, Balochistan through logistic support.
4.	Gilgit- Baltistan	Gemstone (tourmaline, topaz, garnet, aquamarine and quartz: 200 million crt)	Capacity building through short and long term training courses and logistic support. Technical assistance for evaluation of gemstone potential.
5.	Khyber Pakhtoonkh wa	Iron Ore (283) Coal (90) Gemstone (Emerald & gemstones: 70 M crt) Marble & Granite (3,000) Rock Salt (2,000)	Capacity building through short and long term training courses. Technical assistance for evaluation of gemstone potential.

Training Schools, Centers and Polytechnics

Table Universities with Mining Engineering Department in Pakistan

Discipline – Mining engineering	Website address
University of Engineering and Technology, Lahore,	http://www.uet.edu.pk/
Mehran University Of Engineering and Technology, Jamshoro	http://www.muet.edu.pk/
NED university	http://www.neduet.edu.pk/
University of Engineering and Technology, Peshawar	http://www.nwfpuet.edu.pk/
Discipline- Geology
Karachi University	http://www.uok.edu.pk/
Sindh University, Jamshoro	http://www.usindh.edu.pk/
Balochistan University, Quetta	http://www.uob.edu.pk
Punjab University, Lahore	http://www.pu.edu.pk/
Sargodha University, Sargodha	http://www.uos.edu.pk/
Peshawar University	http://www.upesh.edu.pk/
Malakand University	http://www.uom.edu.pk/
Muzafarabad University	http://www.ajku.edu.pk/
Discipline- Geophysics
Qauid-i-Azam University	http://www.qau.edu.pk/

4.4.1 Local Mining companies

Local mining and drilling companies (mostly government controlled) play an important role in making immediate availability of key services and expertise/equipment.

A list of important local mining corporations is as follows:

Pakistan Mineral Development Corporation

http://www.pmdc.gov.pk/pmdc-final/

The Pakistan Mineral Development Corporation (PMDC) is an autonomous corporation attached to the Ministry of Petroleum and Natural Resources, Government of Pakistan. It was created in 1974 with an authorized capital of Rs 1,000 million to expand and help mineral development activities in the country. The Pakistan Mineral Development Corporation was previously known as Resource Development Corporation. PMDC operates four coalmines, four salt mines/ quarries and a silica sand quarry. PMDC produces 10% of the coal and 45% of the total salt production in the country. Its annual turnover during the year 2003-2004 was Rs.584.864 million.

Pakistan Gemstone and Jewelry Development Company

http://www.pgjdc.org

The Company was established to develop the gem and jewelry industry of the country from mine to market, and to enhance its competitiveness internationally by facilitation, technology up- gradation and skill development. The centre-point of the gemstone industry in Pakistan is Khyber-Pakhtoonkhwa. Gems and precious stones, which are mined and polished in Pakistan, include actinolite,

hessonite, rodingite, agate, idocrase, rutile, aquamarine, jadeite, ruby, amazonite, kunzite, serpentine, azurite, kyanite, spessartine (garnet), beryl, marganite, spinel, emerald, moonstone, topaz, epidote, pargasite, tourmaline, garnet (alamandine), peridot, turquoise, grossular, quartz (citrine & others) and vesuvianite. The export value of these gems is estimated locally at more than 200 Million dollars per year.

PGJDC provides training in gemstones and jewelry making. It has worked to seek affiliation with different technical boards. Courses taught at Karachi training center have been obtained from the Sindh Board of Technical Education. PGJDC affiliation with TEVTA Punjab is in the process. One-year postgraduate diploma programs in jewelry designing and manufacturing have started at Karachi and Lahore.

The Company has established fully functional Training Centers in Karachi, Lahore, Quetta, Peshawar and Gilgit; Gem Exchanges in Peshawar and Quetta; and Gem Labs in Karachi, Lahore, Gilgit, Peshawar and Quetta. More than 5000 individuals were trained across the country in the areas of gems and jewelry through more than 350 training programs. The Company is also playing a vital role in promoting the gems and jewelry industry through participation in different international shows in major countries including USA, Germany, UAE, Hong Kong and Thailand. It has also organized 24 Gem Bazaars in Islamabad, Peshawar and Quetta to create an enabling environment for gems and jewelry trade and exports. The USAID Pakistan Initiative for Strategic Development and Competitiveness (PISDAC) has helped PGJDC in a number of activities and facilitated dialogue and coordination through a strategic working group.

PGDJC future plans include

· Setting up of training centers in Sargodha, Azad Kashmir, Bahawalpur, Faisalabad, Multan and Sukkur;

· Setting up of Gem Processing, Mining and Training Centers in Abbottabad, Chillas, Chitral, Gizir and Skardu;

· Setting up of Assaying and Hallmarking Centers in Karachi, Lahore, Faisalabad and Multan;

· Setting up of Business Development Centers in Karachi, Islamabad and Gilgit;

· Setting up a Gem Exchange in Karachi; and

· Setting up a Diamond cutting and faceting facility in the country.

Punjab Mineral Development Corporation (PUNJMIN)

www.punjmin.com

PUNJMIN is the state mining corporation of Punjab and exploits nearly all minerals found in the Province. In 2011-12, the Corporation had sales in excess of PKR 550 million with profits of PKR142 million. The Corporation has a number of drilling rigs and owns 27 mining leases in the province, which produce coal, salt, bauxite, silica sand and gypsum. It is one of the largest producers of Gypsum and Salt in the country. Investors can partner with PUNJMIN for mining operations in the Province.

Lack of mining equipment and machinery

With just one operational international mine in Pakistan (Saindak) and some work on the Thar coal fields in Sindh, a mining equipment industry has not developed on a large scale in Pakistan. International exploration (junior mining) and mining companies have to employ foreign drilling contractors from Australia, EU or North America to perform exploration drilling for projects, as no in-country contractors are generally available with the expertise or equipment to perform the required exploration work. For mine development and operation, most of the stationary processing plant equipment as well as the mobile fleet for ore handling need to be imported, since such types of

equipment have not been used in Pakistan (although Saindak has some imported equipment of this type) prior to international size mining operations taking place in Pakistan.

UPDATE Mining Issues

The annual death toll of mine accidents was between 100 to 200 but a remarkable increase in these incidents has been observed in the first half of 2018, and due to the lack of resources and heavy rescue machinery, it is very unlikely that a worker could survive once trapped inside the coal mine. Accompanied by a handful of mine workers Most of these workers hail from Swat, Dir and other areas of K-P with a large proportion being illiterate and inexperienced, who do not take proper precautions for their own safety.”

Many of Baluchistan’s coal mines have such poor ventilation systems that a mere methane gas exposure can shut them down, resulting in an explosion and collapsing of the coal mine roof. Moreover, another main reason behind the current series of accidents in various rural parts of Baluchistan is the insufficient build-up of coal mine roof. In most parts of the world, these roofs are maintained by a hydraulic support known as the “chocks”. These hydraulically-powered roves support the advance to give protection and do not allow the roof behind the support to fall. But unfortunately, here in Baluchistan, the coal mine owners are illiterate, greedy and do not care about the fact that roof and ground control are the major factors of safe mining. Most of the coal mines of Baluchistan are found in a dangerous zone where methane gas liberation (produced) limits the coal production and depletes the thick seams of coal, which is the main reason behind the rapid increase in accidents. In spite of these obvious facts, most of Baluchistan’s coal mine owners are still running their businesses on the same decade-old patterns of mining and eventually putting the lives of thousands of mine workers and residents of neighborhood in danger

A more sophisticated mining techniques are the need of the hour. All underground coal mines should be properly equipped with large fans approximately 300hp each. This well-designed ventilation system will dilute a huge amount of fresh air with leaked toxic gases and dust particles. Also, these fans should be carefully maintained and checked before mining starts for the day. Moreover, the mines that are 800 to 1,000 feet deep and where workers have to move on to deeper and gassier regions, the toxic gases should be removed using pipe drainage so that there is fresh air for ventilation.

Meanwhile, to reduce the hazards and safety problems of coal miners, a couple of years ago, a group of three students from the Computer Science Department of BUITMS worked on cost effective miners’ supervising system. They developed an empirically tested sensor-based head gear or helmet that can protect coal mine workers from the accidental gas leaks by offering a real time surveillance signal or early warning. The head gear consists of various sections like gas, collision and helmet sensors and a highly sensitive location identifier. That helmet is equally equipped with a heartbeat monitor and a communication system to the base station outside the mine. Furthermore, working on the same gas sensor technology, a cheap hand-held sensor can also be developed as an early warning for the sudden toxic gas exposure. Unfortunately, neither the government of Baluchistan nor the coal mine association or federations widely projected these inventions.

Update

November 25, 2018. Three coal-miners have died after inhaling poisonous gas in a coal mine in Chamalang area of Duki district on Sunday. Official sources said that around five coal miners, who were working hundreds of feet deep inside the mine fell unconscious after inhaling the poisonous gas. Rescue workers rushed to the site to recover all the affected workers, who were shifted to the nearest health facility. However, health officials later pronounced three miners dead. “Three coal miners died of inhaling poisonous gas had been working deep inside the mine,” said a police official. However, two miners survived as they were not working that deep in the mine, they added. At least 14 coal miners died in three separate incidents in different coal mines in KP last month.

The list of victims is never-ending. On May 6, 23 workers were killed when two coal mines collapsed near Quetta. On Aug 12, 15 perished in an explosion in Sanjdi. On Sept 2, two miners died from suffocation in Machh. On Sept 12, a gas explosion in Darra Adam Khel claimed the lives of nine miners. On Oct 14, five workers died from suffocation in Peshawar and Nowshera. And now, three more miners have died from inhaling poisonous substances in Dukki, Balochistan. The body count keeps rising. So routine are the deaths of coal miners that they barely make a ripple in the public’s consciousness anymore. In the past eight years, more than 320 occupational deaths of coal miners have been recorded — around 57 of them this year alone.

Coal mines are death traps for the 20,000-strong labor force in Baluchistan, and that is forced to toil in 2,500 mines. Miners are forced to work in conditions that resemble modern-day slavery. Many do not receive minimum wages, and there is evidence of debt bondage. The poorly equipped workforce also exhibits a high prevalence of respiratory illnesses. There are several reasons for the continued exploitation. First, the negligence of powerful owners — many of them hold political office — who does not invest in adequate infrastructure and training. Second, is the attitude of contractors who force miners to work overtime? Third, the poor implementation of safety standards. Fourth, the total lack of effective unionisation. A lack of accountability allows private investors free rein to maximize profit on the back of exploited labor. Despite documented evidence, the chief inspector of mines in Baluchistan has not prosecuted a single mine owner or contractor under the (admittedly outdated) Mines Act, 1923. It is imperative for Pakistan to endorse the ILO’s Safety and Health in Mines Convention, 1995, and the Code on Safety and Health in Underground Coal Mines, 2006. The only impediments are the interference of vested interests and the criminal indifference of those who believe the poor are unworthy of rights.

Update Dec., 28, 2018: At least three coal miners died while two others were rescued when a mine collapsed in Baluchistan’s Dukki district on Thursday morning, District Police Officer (DPO) Sardar Hashim told DawnNewsTV. According to the DPO, the incident took place in the Chamlang area of the district. The police official said five miners were working thousands of feet deep inside a mine, when it suddenly collapsed. Miners have also been recovered. "There are almost no safety arrangements for life security of miners," said Bakht Nawab, an official of the coal miners association in Balochistan. The regulations framed under the Mines Act, 1923, stipulate a fairly extensive safety and labor welfare regime that must be enacted and observed at all mines. Under this Act, the key position empowered to carry out and verify the implementation of the Act is that of the chief inspector and the inspectors appointed, pursuant to the 18th Amendment, by the provincial governments "Rules are mere in papers rather than in practice," said Sultan Muhammad Khan, the central leader of Pakistan Central Mines Labour Federation (PMCLF). In the past eight years, more than 318 laborers working in coal mines have been killed in the course of their employment in Baluchistan. Just in the first eight months of this year, at least 50 miners have died in Baluchistan and in August alone, 17 coal miners lost their lives in two separate incidents.

Update: Jan., 3, 2019

An explosion took place in a coal mine in the Chamalang area of Dukki district on Wednesday, killing four coal miners and critically injuring one. The explosion took place as a result of a poisonous gas, which had filled in the mine. This is the third such incident taking place in a coal mine in the last two weeks.

Update Dukki, Baluchistan; Jan., 22, 2109:

At least three miners were killed after a coal mine they were working in partially collapsed following a gas explosion in Baluchistan’s coal-rich Dukki district on Monday morning. Three coal miners still remain trapped inside the mine, more than eight hours after the explosion, The six miners were working 1,700 feet deep inside the mine when a methane gas explosion resulted in a portion of the mine to collapse, Hazardous working conditions inside coal mines of Baluchistan have been claiming precious human lives. As per the statistics provided by the provincial Mines and Minerals Development Department, over 1,000 coal miners have died in such kind of incidents during the last 18 years in Baluchistan. According to government sources, there are at least 20,000 laborers employed across Baluchistan in 2,500 mines.

Mining Deaths:Jan.,28,019:Two workers were killed after a trolley full of coal fell on them when they were working inside a coalmine in Duki tehsil of Loralai district on Sunday. Mines in Baluchistan are notorious for their poor safety standards. As many as 19 miners have so far lost their lives in incidents in Duki this month., said that lack of safety precautions at mines in Duki caused incidents on a daily basis.On Jan 21, six miners were killed after an explosion inside a coalmine in Duki.

Update: Apr.,12,2019: SHANGLA: Four workers(Noorul Haq, Fazal Rabi and Mohammad Iqbal of Ganshal and Fazal Rabi of Sorband area in Shangla ), who died of suffocation in a coal mine in the Kala Khel area of Bara on Wednesday, were laid to rest in their native towns in Kana tehsil of Shangla district on Thursday .Sources said that the four miners and one of their managers went deep inside coal mine number 43 on Wednesday where they fell unconscious after inhaling poisonous gas They said that manager Fazal Rabi and three miners died of suffocation while another coal miner, whose name could not be ascertained, was taken out of the mine in unconscious condition . Local officials said that there was only one entry point to the coal mine and that the miners were without any protective gear.

Quetta mine collapse: July,16,2019: Quetta mine collapsed , The miners got trapped almost 3,500 feet inside after the mine collapse due to the accumulation of poisonous gas on Sunday one mine worker was brought to safety during a rescue operation but efforts were under way to recover the remaining 11 miners, who have been trapped for over 20 hours. The presence of poisonous gas inside the mine has been making the access to the miners difficult. It was stated that six relief workers participating in the rescue operation also fell unconscious due to toxic gas in the mine and had to be evacuated. According to the Pakistan Central Mines Labour Federation, about 100 to 200 laborers die on average in coal mine accidents across the country every year. The Baluchistan Mines Association held a protest outside the Quetta Press Club against the rise of coalmine incidents. According to leaders of the union, the government has failed to ensure safety of mine workers as owners and contractors are turning these mines into death holes. Poor working conditions inside the coalmines in Baluchistan has been claimed lives of several minders in Harnai, Dukki, Mach and Sowrange areas.

July, 18,2019:

Death toll in the Degari coalmine collapse reached nine as one of the three miners rescued succumbed to his injuries.Bodies of eight miners were earlier recovered from the Degari coalmine as the rescue operation concluded on Tuesday.Two other miners who were rescued are also said to be in critical condition.

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Tuesday, September 18, 2018

Mining Reforms Pakistan

Aid Agency Support requirements

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