PAKISTAN possesses some of the world’s largest salt deposits in Khewra, Warcha and Kalabagh in Punjab, with Khewra being the second largest.
The country’s salt reserves have been estimated at around 10bn tonnes, with 6.68bn tonnes in the Khewra rocky salt mine alone. Annual salt production from the mine is around 350,000 tonnes.
However, Pakistan is ranked 20th among salt-producing countries, producing only 1.9m tonnes per year. This is less than 1pc of global salt production.
This puts a big question mark on our approach towards managing and utilising our huge natural resources. Pakistan needs to develop a holistic salt exploitation and trade policy that targets the international salt market and restructures the sector from the grass-root level.
While over 110 countries produce salt, just seven countries account for 65pc of the global production. Despite being the world’s largest salt producer, China is still a net importer, as is the second largest producer, the US. Salt is mainly used in producing chemicals, as well as in agriculture, food and food processing and road de-icing.
Pakistan has a significant advantage over India in salt exports, as its salt is pure and contains
About 30pc of global salt demand comes from China, which imports 1-1.5m tonnes of the material from India every year. Impurities in the Indian salt have to be removed beforehand, and the cost of purification is high, sometimes exceeding the cost of the salt itself. Therefore, China has been showing reservations over Indian salt quality.
Pakistan has a significant advantage over India here, as its salt is pure and contains 99pc halite.
Salt consumption in Asia is projected to rise about 5pc by 2018, and the region is forecasted to account for nearly half of world demand by then. This offers an opportunity for Pakistan’s salt industry to establish itself as a major player in the Middle East and Asia Pacific market.
The advantages of inflating salt mining in the country over other minerals include its occurrence as a massive formation; its requirement of minimum financial allocation for exploration and simple mining techniques; existence of operational salt mines; and a rock competent enough to sustain the stable mine structure.
Some suggestions are given below to help the country realise its potential as a ‘Salt Republic’.
• Develop a national salt production strategy based on local consumption and world market trends
• Attract substantial foreign investment in the segment. A crucial step is to evaluate and quantify existing salt resources based on globally recognised criteria, like JORC Code (Australia) and CIM (Canada)
• Identify potential buyers, particularly among neighbouring countries and strategic partners. An effective way is to enter into indentures of ‘two-way-trade,’ where we sell the other country salt and buy some other commodities that we need. For instance, targeting China for salt exports can supplement our foreign exchange earnings
• Facilitate salt mining by employing advanced technology, business improvement programmes and building the required infrastructure like water, electricity and road networks around the salt belts, in addition to consolidating and augmenting the geological and mining data centres
• Encourage joint ventures between local and foreign partners and become recognised as a reliable supplier of substantial quantities of high quality salt.
In a nutshell, Pakistan needs to haul up its salt mining sector from the grass-root level by incorporating foreign market-capturing strategies, in-vogue exploration and mining techniques, business-friendly legal and trade policies, and capacity building.
Published in Dawn, Economic & Business, May 18th, 2015