Karachi, August 03, 2023 (PPI-OT): Pakistan Minerals Summit 2023 takeaways

The Pakistan Minerals Summit 2023 was held yesterday, which had the participation of distinguished experts in the fields of mineralogy and mining, foreign ambassadors/investors, executives of local SOEs, and GoP officials. The summit encompassed five sessions, wherein the key points that were discussed are highlighted below.

Session Two: Pioneering Pathways - Emerging Global Mining Trends

Jacques V. Tonder (CDO, Rio Tinto Mining Corp.) emphasized the necessity for the global mining industry to adopt a more intelligent approach toward decarbonisation. The mineral mining process is highly energy and resource-intensive, hence, requires strategic planning to move forward. The development of infrastructure in targeted areas is key for the mineral sector to become a reality in Pakistan i.e. power stability, road/railways network and safe water usage.

Campbell McCuaig (Geoscience head, BHP) stated that BHP is keen to explore the massive potential in Pakistan, as the company was previously involved in the initial exploration/delineation of the Reko Diq deposits back three decades ago. Pakistan needs to pull on three levers to unlock its mineral energy potential: (1) Understand resource potential and extract relevant data, (2) Build stable framework and transparent policies for exploration, and (3) Work towards the betterment of human resource/talent pipeline.

Shaaf Al Osaymi (VP, M Ma'aden) expressed firm commitment to develop Pakistan's mining sector, inspired by KSA's success. He emphasized the need for government and exploration companies to come in collaboration to overcome future challenges. Balochistan's potential requires more investments from KSA and other partners to harness its resource potential.

Session Three: Gateway to Prosperity - Fostering Investment in Pakistan's Mineral Landscape

Oliver Dachsel (MD, Jefferies) emphasized that reducing the risk premium for Pakistan largely depends on achieving stability, both in fiscal and political aspects. He further highlighted the significance of overcoming bureaucratic obstacles and similar challenges, pointing out that the country's authorities have shown strong commitment to addressing these issues.

Karina Danilyuk (Global Head, Mining and Metals, Rothschild) stated that recent drivers for investments in the upstream mining sector is mostly demand based coming from critical components for EV/renewable energy, and the number of institutions willing to support such activities have shrunk greatly over the years. Key to reducing country’s risk premium is to follow the investment framework, established specifically to facilitate investors throughout the ventures process.

Pierre Cailleteau (MD, Lazard) pointed out that all projects inherently carry risks, especially with the costs of capital rising globally. However, in the case of Pakistan, a significant factor that mitigates this phenomenon and may potentially enhance risk-adjusted returns for investors is the shared goal among the government and all stakeholders to initiate new investments. This collective goal is to bring overall economic benefits to the country, including improvements in the FX and BoP situation, enhanced infrastructure, and increased job opportunities. Country’s authorities seem to understand the merits and costs of initiating such projects and have been transparent in their approach throughout.

Rebecca Campbell (Partner, Global Head of Mining and Metals, White and Case) emphasized that the country is on the cusp of building the first large scale mining project. Importantly, the country has no history of environmental or social misdeeds in this sector. This unique position presents an opportunity for Pakistan to establish itself as setting world standards in terms of ESG compliance while undertaking these projects.

Glen Ireland (Senior Advisor, RB and A Partners) stressed that these capital-intensive mining projects require political risk mitigation for securing international project financing. All partners, including GoP, SOEs, and international partners, must collaborate on a comprehensive plan to guarantee project success, ensuring sufficient lender funding throughout.

Session Four: Developing Mineral Sector in Local Business Environment

Waqar Ahmed Malik (CEO, Fauji Foundation) stated that mining offers the country a chance for economic growth and global recognition. Public private partnership, as in the case of Reko Diq is the way to move forward. Ghias Khan (President, Engro Corp.) highlighted the successful experience of ENGRO in the Thar Coal Mining project (SECMC). He mentioned that the coal mine in Thar, Sindh has played a significant role in generating saving the country’s precious FX reserves alongside developing local communities in the area. Thar coal is responsible for fueling 10% of the country's power supply.

Mohammad Ali Tabba (CEO, Lucky Group) emphasized the importance of clear-cut policies by the Government of Pakistan to unlock the country's mineral potential through value addition. Instead of solely exporting raw materials, he reiterated for promoting local industries that add value to these resources. This may lead to the growth of the local population and foster further industrialization in the country for many years to come.

Faheem Haider (MD), MPCL stated that Lithium, Copper and Nickel are going to be essential to meet Global Net-zero targets by 2050, and MARI fully plans to transition towards these segments to support the world's sustainability goals.

Session Five: Ministerial Dialogue on Sustainable Governance and Mineral Development

Mark Bristow (CEO, Barrick Gold) stated that like all forms of investments have to be done with clarity on rules and responsibilities and the fact that they don’t change, so that people may benefit eventually. He highlighted the mining legislation in the Kingdom of Saudi Arabia (KSA) as an exemplary model to build a robust foundation for a successful mining industry. Dr. Musadik Malik (Minister for Petroleum and Energy), reaffirmed that meaningful value added growth for the local population is important, and Barrick Gold as a partner understands this. Kamal Abbasov (Deputy Minister of Energy, Azerbaijan) emphasized the significance of Pakistan and Azerbaijan’s strategic partnership. The country’s also recently signed a RLNG supply agreement, further strengthening their cooperation in the energy sector.

Abdulrahman Al Belushi, (Assistant Deputy Minister for Mining, Industry and Mineral Resources, KSA) emphasized the need for optimizing three key functions in the said investments: 1) Economic returns, 2) Social returns, and 3) Environmental protection. He highlighted Barrick Gold's expertise in ensuring that the development of mines aligns with the progress of the communities, as demonstrated in KSA.

Dr. Ahsan Iqbal, (Federal Minister PDSI) described the successes of CPEC and quoted that the corridor has bought in investments worth US$25bn in the country, with major investments in Thar Coal. Special Investments Facilitation Council (SIFC) is a step in the right direction, and the Govt’ is targeting industrial, agricultural, IT and Mining sectors to be the engine of future exports in the country. Ishaq Dar (Federal Minister for Finance and Revenue) reiterated the importance of SIFC, and quoted the successful examples of Egypt and Indonesia that setup such funds. SIFC will be structured in a way to address various sectors, including agriculture, mineral and mining, information technology, and corporate sector SPVs.