DISTRICT KOHAT, KHYBER PAKHTUNKHWA

Cluster Study –Gypsum Mining & Processing- Kohat, Khyber Pakhtunkhwa

Cluster Based Mineral Transformation Plan V2025- Feasibility Study Page | 1

GYPSUM MINING & PROCESSING DISTRICT KOHAT, KHYBER PAKHTUNKHWA

Cluster Study

Mineral Transformation Plan Vision 2025 Ministry of Planning, Development & Reforms,

Government of Pakistan.

Final Report



Contents 1. ABOUT THE STUDY.................................................................................................................................. 7

2. DESCRIPTION OF THE CLUSTER ......................................................................................................... 8

2.1. Introduction ....................................................................................................................................... 8

2.1.1. Strategic Location of the Cluster ........................................................................................ 8

2.2. Situational Analysis ....................................................................................................................... 10

2.2.1. Enterprise Base...................................................................................................................... 10

2.2.2. Products ................................................................................................................................... 16

2.2.3. Production Statistics ............................................................................................................ 19

2.3. Institutional Framework ................................................................................................................ 21

2.3.1. Minerals Development Department .................................................................................. 21

2.3.2. Forestry, Environment and WildLife Department .......................................................... 23

2.3.3. Pakistan Mineral Development Corporation ................................................................... 23

2.3.4. Labor ......................................................................................................................................... 23

2.3.5. Environmental Protection Agency .................................................................................... 23

2.3.6. The Industries, Commerce, and Technical Education Department (Government of

Khyber Pakhtunkhwa) ............................................................................................................................ 24

2.3.7. SMEDA Khyber Pakhtunkhwa ............................................................................................ 24

2.3.8. Frontier Mine Owners Association (FMOA)- Kohat Division ...................................... 24

2.4. SWOT Analysis ............................................................................................................................... 25

2.4.1. Strengths ................................................................................................................................. 25

2.4.2. Weaknesses ............................................................................................................................ 25

2.4.3. Opportunities .......................................................................................................................... 25

2.4.4. Threats ..................................................................................................................................... 26

3. DEMAND AND SUPPLY GAP ANALYSIS - LOCAL MARKET ....................................................... 27

3.1. Quantum of Supply ........................................................................................................................ 29

3.1.1. Supply from Mines ................................................................................................................ 29

3.1.2. Supply from Processing Units .......................................................................................... 30

3.2. Supply Trends ................................................................................................................................. 30

3.3. Quantum of Demand ..................................................................................................................... 30

3.4. Demand Trend ................................................................................................................................. 31

3.5. Key Market Segments ................................................................................................................... 31

3.6. Potential Niche Markets ................................................................................................................ 32

3.7. Expected Growth of Cluster Products ...................................................................................... 32

4. DEMAND AND SUPPLY GAP ANALYSIS - EXPORT MARKET .................................................... 33

4.1. Analysis of Current Exports ........................................................................................................ 33

4.2. Analysis of Country wise Existing Demand ............................................................................ 33



4.3. Demand and Supply Gap.............................................................................................................. 34

4.4. Expected Growth of Cluster ........................................................................................................ 35

4.5. Potential Niche Market with Growth Trends ............................................................................ 36

4.6. Key Requirements of Potential Market ..................................................................................... 37

4.6.1. Gypsum Anhydrite ................................................................................................................ 37

4.6.2. Calcined Gypsum .................................................................................................................. 37

4.6.3. Gypsum Boards ..................................................................................................................... 38

4.7. Analysis of Core Competing Products and Countries ......................................................... 39

4.8. Cluster’s Existing and Potential Competitiveness ................................................................ 39

4.9. Major Drivers of Success or Failure .......................................................................................... 40

5. CLUSTER GAP ANALYSIS IN THE LIGHT OF INTERNATIONAL BEST PRACTICES ............. 41

5.1. Mining ................................................................................................................................................ 41

5.1.1. Infrastructure .......................................................................................................................... 41

5.1.2. Technology ............................................................................................................................. 43

5.1.3. Human Resource ................................................................................................................... 47

5.1.4. Access to Finance ................................................................................................................. 47

5.2. Processing ....................................................................................................................................... 48

5.2.1. Infrastructure .......................................................................................................................... 48

5.2.2. Technology ............................................................................................................................. 49

5.2.3. Human Resource ................................................................................................................... 54

5.2.4. Access to Finance ................................................................................................................. 54

6. KEY ISSUES ............................................................................................................................................. 54

6.1. Regulatory ........................................................................................................................................ 54

6.2. Infrastructure ................................................................................................................................... 55

6.3. Technology ...................................................................................................................................... 56

6.4. Financing .......................................................................................................................................... 56

6.5. Marketing .......................................................................................................................................... 56

6.6. Social ................................................................................................................................................. 56

7. PROPOSED INTERVENTIONS ............................................................................................................. 58

7.1. Regulatory ........................................................................................................................................ 58

7.1.1. Ammendments in Mineral Policy ....................................................................................... 58

7.1.2. Ammendments in Industrial Policy ................................................................................... 59

7.2. Infrastructure ................................................................................................................................... 60

7.2.1. Mines Access Roads for Mine ............................................................................................ 60

7.2.2. Establishment of Gypsum Processing Zone .................................................................. 61

7.3. Technology ...................................................................................................................................... 62

7.3.1. Machinery Pools for Mining ................................................................................................ 62

7.3.2. Establishment of Gypsum Processing Factory on International Standards ......... 63



7.4. Financing .......................................................................................................................................... 64

7.4.1. Financial Support to Mining Sub Sector ......................................................................... 64

7.4.2. Upgradation Support to Processing Sub Sector ........................................................... 65

7.5. Formulation of Marketing Strategy ............................................................................................ 65

7.6. Social ................................................................................................................................................. 66

8. Economical, Social, and Environmental Impacts ........................................................................... 67

8.1. Economic Impacts ......................................................................................................................... 67

8.1.1. Individual Impact on SMEs.................................................................................................. 67

8.1.2. Impact on overall Cluster .................................................................................................... 69

8.2. Environmental Impacts ................................................................................................................. 69

8.3. Social Impacts ................................................................................................................................. 69

8.4. Key Economic Indicators Analysis ............................................................................................ 70

8.4.1. Contribution to GDP ............................................................................................................. 70

8.4.2. Economic Rate of Return on Investment ........................................................................ 70

8.4.3. IERR, Payback Period, and Net Present Value .............................................................. 70

9. Additional Inforamtion ........................................................................................................................... 71

ANNEXURE-I: Record Note of Gypsum Kohat Cluster FGD............................................................................... 71

ANNEXURE-II: SMEDA OFFICES’ ADDRESSES ...................................................................................... 78

ANNEXURE-III: Quotations for Plaster of Paris Plants .................................................................................. 82

ANNEXURE-IV: Quotations for Gypsum Boards Unit .................................................................................. 83



Table 1: Gypsum Mining in Khyber pakhtunkhwa ................................................................................................ 8 Table 2: Kohat Gypsum Cluster Summary ........................................................................................................... 10 Table 3: Mining Activities by Size of Organization ............................................................................................. 11 Table 4: Gypsum Stocking Points in Kohat Divisions ......................................................................................... 12 Table 5: Gypsum Processing Units in Kohat Division- by Size ........................................................................... 13 Table 6: Processing Units in Kohat Division- by Location .................................................................................. 16 Table 7: Marketing Mix of Mines......................................................................................................................... 17 Table 8: Marketing Mix of Processing Units ........................................................................................................ 18 Table 9: Testing Parameters of Plaster ................................................................................................................. 19 Table 10: Production Statistics of Mines .............................................................................................................. 19 Table 11: Production Statistics of Processing Units ............................................................................................. 19 Table 12: Production of Gypsum Crush- Individual Unit..................................................................................... 20 Table 13: Cummulative Production of Crush ....................................................................................................... 20 Table 14: Production of Uncalcined Powder ........................................................................................................ 20 Table 15: Cumulative Production of Gypsum Crush Units .................................................................................. 20 Table 16: Production of Gypsum Plaster- input vs output Of an Individual Unit ................................................ 20 Table 17: Production of Gypsum Plaster- Individual Unit ................................................................................... 21 Table 18: Production Detail of Processing Units .................................................................................................. 30 Table 19: Pakistan's Exports of Gypsum Products ............................................................................................... 33 Table 20: Top 03 Exporters of Gypsum Anhydrite to India ................................................................................. 33 Table 21: Top Three Importing Countries of Gypsum Products .......................................................................... 34 Table 22: World' Gypsum Trade .......................................................................................................................... 34 Table 23: Pakistan's Gypsum Products International Trade ................................................................................. 35 Table 24: Pakistan's International Trade Projection (Year 2025) ......................................................................... 35 Table 25: Gypsum Products' Shift of Consumption ............................................................................................. 36 Table 26: Requirements of Gypsum Boards for Plaster ....................................................................................... 37 Table 27: Key Requirements of Gypsum Boards ................................................................................................. 38 Table 28: Detail Of Gyspum Processing Zone ..................................................................................................... 61 Table 29: Detail of Machinery Pool ..................................................................................................................... 62 Table 30: Detail Of Gypsum Processing Factory ................................................................................................. 63 Table 31: Revenue Stream Of The Project ........................................................................................................... 63 Table 32: Detail Of Intervention ........................................................................................................................... 64 Table 33: Detail of Intervention ........................................................................................................................... 65 Table 34: Economic Impact-Upgradation of a Single Quarry .............................................................................. 68 Table 35: Economic Impact- Mechanization of Stocking Yard............................................................................ 68



Figure 1: Gypsum mining And Processing in Kohat Division ............................................................................... 9 Figure 2: Gypsum Mines and Powder Processing .................................................................................................. 9 Figure 3: Gypsum Mining in Kohat Division ....................................................................................................... 10 Figure 4: Gypsum Stocking Points ....................................................................................................................... 12 Figure 5: Small Scale Mining Process Flow ......................................................................................................... 12 Figure 6: Medium Scale Mining ........................................................................................................................... 13 Figure 7: Coarse Gypsum Powder Processing ...................................................................................................... 14 Figure 8: Grinding Machine ................................................................................................................................. 15 Figure 9: Sealing Machine .................................................................................................................................... 15 Figure 10: Gypsum Crush ..................................................................................................................................... 16 Figure 11: Plaster Processing................................................................................................................................ 16 Figure 12: Gypsum Rock of Pakistan- Technical Detail ...................................................................................... 17 Figure 13: Supply Chain of Gypsum Cluster- Kohat Division ............................................................................. 28 Figure 14: Projected Consumption of Gypsum in Pakistan (Million Tons) ......................................................... 32 Figure 15: Current Vs Projected Scenario of the Cluster...................................................................................... 36 Figure 16: Pakistan's Competitors ........................................................................................................................ 39 Figure 17: Mining Infrastructure in Iran ............................................................................................................... 41 Figure 18: Mines to Main Roads in Kohat Davison ............................................................................................. 42 Figure 19: Mine Access Road in Krapa, Kohat Division ..................................................................................... 42 Figure 20: Surface Mining- Technology at Gypsum Mines of Oman .................................................................. 43 Figure 21: Sub Surface Gypsum Mining in France .............................................................................................. 43 Figure 22: Vermeer Terrrain Leveler for Gypsum Mining ................................................................................... 44 Figure 23: Primitive Hand Drilling for Explosives ............................................................................................... 45 Figure 24: Drilling for Explosives- Pneumatic Drills ........................................................................................... 45 Figure 25: Manual Loading At Mines .................................................................................................................. 46 Figure 26: Gypsum Extraction at Mechanized Mine of Kohat Division .............................................................. 46 Figure 27: Gypsum Loading at Mechanized Mine- Kohat Division ..................................................................... 47 Figure 28: Crushing at Gypsum Mine of White Mesa, Sandoval County- USA .................................................. 48 Figure 29: Gypsum Powder Industry of China ..................................................................................................... 49 Figure 30: Gypsum Powder Plant By Henan Liming Heavy Industry Science & Technology Co. ...................... 50 Figure 31: Gypsum Powder Unit at Krapa, Kohat Division ................................................................................. 50 Figure 32: Gypsum Crush and Powder Plant at Iran ............................................................................................ 51 Figure 33: Gypsum Crushing in Karak, Kohat Division ...................................................................................... 51 Figure 34: Gyspum Crush Sifting ......................................................................................................................... 52 Figure 35: Loading on Crush Plants, Kohat Division ........................................................................................... 52 Figure 36: Plaster of Paris Production Line By Precious Group- India ................................................................ 53 Figure 37: Plaster of Paris Plants- Kohat Division ............................................................................................... 53



1. ABOUT THE STUDY

This specific document aims to study the Gypsum Mining and Processing Cluster of

Kohat Division, Khyber Pakhtunkhwa.

The survey conducted mainly based on Focus Group Discussions (FGDs), Key informant

discussion, and one to one interviews of SMEs in the business of mining, processing and

trading by random sampling techniques. The inputs were analysed by using Statistical

Package for social Sciences (SPSS) followed by the SMEDA team’s review, and expert

opinion by geologists and external management consultants.

The tools used in the study were:

Questionnaire for Cluster Associations

Questionnaire for Gypsum miners of Kohat Division

Questionnaire for Gypsum processors of Kohat Division

Questionnaire for Plaster of Paris products manufacturers of Peshawar

Questionnaire for Gypsum traders of Kohat Division

SPSS (Data Analysis Software)



2. DESCRIPTION OF THE CLUSTER

2.1. Introduction

Pakistan is endowed with natural resources in huge reserves of Gypsum that is concentrated

in Khyber Pakhtunkhwa (Khyber Pakhtunkhwa). It is estimated that about 92% of Pakistan’s

gypsum reserves, that is, 5.5 Billion tons exist in Khyber Pakhtunkhwa. The gypsum

production of the province from 70 mines is estimated to be 4.2 million tons per annum.

TABLE 1: GYPSUM MINING IN KHYBER PAKHTUNKHWA

Districts Number of Leases

Abbottabad 02

D.I. Khan 01

Hangu 01

Haripur 06

Lakki Marwat 01

Kohat 30

Karak 29

Total 70

Kohat division that comprise of Kohat and Karak districts accounts for 89%, that is, 4.9

Billion tons of Khyber Pakhtunkhwa’s high quality gypsum of. It has 59 mine leases. The

production for year 2017, is estimated to 3.5 million tons.

The processing industry of gypsum was initiated in Kohat division after the discoveries of

gas and oil in Karak in 2007. These production units were mostly established at roadside in

vicinity to the mines that is a global practice due to the bulky nature of gypsum. Currently,

there are 158 processing factories including plaster of Paris plants, gypsum powder units, and

crush plants.

2.1.1. Strategic Location of the Cluster

As a whole the cluster is at distance of 30 Km from Kohat Cement Factory, 175 Km from

Cherat Cement Factory (Nowshehra), 245 Km from Lakki Cement Factory (Pezu, Lakki

Marwat), 1,100 Km from Cement Factories of Karachi, 1,226 Km from Karachi Port, 1,615

Km from Gawadar Port, 522 Km from Wahgah Border Lahore and 181 Km from Torkham

border.



FIGURE 1: GYPSUM MINING AND PROCESSING IN KOHAT DIVISION

FIGURE 2: GYPSUM MINES AND POWDER PROCESSING

All of the mines and processing units are engaged in direct sales of their products to crush

plants, powder plants, plaster of Paris units. The role of middleman is limited to the supplies

of cement factories and gypsum board processing plants.



2.2. Situational Analysis

2.2.1. Enterprise Base

The gypsum mining areas of Kohat Division are spread along 04 main roads, namely:

➢ Main Indus Highway (Area: Spina Banda, and Link Road to Nari Panos)

➢ Kohat Rawalpindi Road (Area: Siyab)

➢ Shakardara Kalabaagh Road (Area: Shiwaki)

➢ Old Bannu Road (Area: Jhatta Ismail Khel, and Krapa)

TABLE 2: KOHAT GYPSUM CLUSTER SUMMARY

Name of the Sub

Sector

No. of Units Employment Estimated Investment

(Rs.)

Mines

Leases : 59

Stocking yards: 43

59

3,100

172

1.49 Billion

24 Million

Processing units 157* 1,580 1.3 Billion

Total 217 4,852 2.79 Billion

* As 64 units are closed, therefore these are not mentioned in the section of goals and objectives, resulting in the

total number of 152 (59 mines + 93 processing).

Out of the 59 mine lease holders, 05 have their own Plaster of Paris and Powder processing

Units on old Bannu road.

Gypsum Mining

FIGURE 3: GYPSUM MINING IN KOHAT DIVISION

Note: The orange line shows roads with mining areas



Though the number of mine leases is 59 and the average number of quarries on each mine is

10 making the total number of quarries to be 590, but due to the factor of occupations on

mines and subletting, the miners don’t reveal the name of actual investor. So, it is difficult to

asses the actual number of SMEs engaged in the quarrying. Therefore this study considers

seach mine lease as an SME and the investment per mine lease as the investment of single

SME. Investment per mine lease is estimated as under:

❖ Labor Intensive Small Scale Mine: Rs. 05 Million per mine (Including investment of

Rs. 0.5 Million on each quarry).

❖ Mechanized Medium Scale Mine: Rs. 25 Million per mine (Including Rs. 05 Million

per quarry)

❖ Mechanized Large Scale Mine: Rs. 100 Million per Mine

Gypsum mining is dominated by medium scale enterrpises, comprising 93% of the total in

terms of investment as well as number of leases.

TABLE 3: MINING ACTIVITIES BY SIZE OF ORGANIZATION

Description Number of

Leases

Number of

Quarries/Mine

Number

of

Employees

Investment

(Rs.)

Labor Intensive- Small

Scale

03 10 300 15 Million

Mechanized- Medium Scale 55 10 2,750 1.38 Billion

Mechanized- Large Scale 01 10 50 100 Million

Total 59 3,100 1.49 Billion

In case of labor intensive mine, each quarry employs 10 persons on averagewhereas that of a

mechanized mine, this is 05 persons per quarry.

Due to the factor of illegal mining, the informal sources of borrowing, and the rental

machinery the exact number of business owned machinery can not be exactly calculated.

Similarly, the unregistered heavy earth moving machinery keeps moving from quarry to

quarry which makes it difficult to observe the exact number of excavators. Same is the case

with the dumpers and trucks having frequent movement. Based on the careful estimates of the

field survey, it is however estimated that there are about 90 excavators (both owned and

rented) and 25 dumpers/trucks owned by the miners.

All of the Mine Owners from Jhatta Ismail Khel, and Nari Panos have their own open area

stocking points adjacent to the main roads whereas those of the other areas prefer to deal

directly from mines. The labor is engaged only for loading on per trolley basis and on

average 04 persons are engaged per stocking point.



FIGURE 4: GYPSUM STOCKING POINTS

TABLE 4: GYPSUM STOCKING POINTS IN KOHAT DIVISIONS

Area Number of

Points

Number of

Employees

Bannu Road 23 92

Indus Highway 20 80

Total 43 172

About 90% of these stocking yards rely upon manual loading and only 10% use the loaders

for purpose.

Small Scale Mining Operations

Small scale mining is often done on primitive methods. This type of mining is totally labor

intensive.

FIGURE 5: SMALL SCALE MINING PROCESS FLOW



Medium and Large Scale Mining Operations

This type of mining is either done with the help of used pneumatic drilling machinery or by

use of second hand heavy earth moving machinery. The first method is applied at points with

heights impossible to reach with heavy machinery. Owing to the difficulties in obtaining

explosives, the cluster is quickly shifting to the use of excavators for gypsum extraction and

then rock splitting with the attached Jack Hammer. Majority of such mine owners arrange

excavators on rental which are available at Tarnol (Rawalpindi) as well as Chungi (Karak).

FIGURE 6: MEDIUM SCALE MINING

The quarrying activities depict different practices as per the localities, for example, in mining

belts of Pindi road, Shakardara road, and Indus highway, the mine owners normally conduct

quarrying activities by themselves and hire labor on daily wages basis. As compared to this,

the local communities of Bannu road, often occupy and operate the quarries by themselves

and pay the mine owners a mutualy decided percentage of the excavated quantity.

Gypsum Processing

The gypsum processing activities of the Kohat Division comprise of small and medium scale

units. These units are of powder units, crush plants and plaster of paris as explained below:

TABLE 5: GYPSUM PROCESSING UNITS IN KOHAT DIVISION- BY SIZE

Description Size of the Firm No. of

Units

Investment (Rs.)

Gypsum Powder Processing Small Scale 12 12 Million

Gypsum Crush Plants Medium Scale 15 105 Million

Plaster of Paris Plants Medium Scale 131* 1.18 Billion

Total 157 1.3 Billion

* Though 67 units are closed but total number is mentioned here, so that to refelect the actual amount of

investment.



Gypsum Powder Unit:

These are highly dependent upon the orders from farmers from Punjab and India to be used as

soil enhancer in their fields. Gypsum powder is also procured by the manufacturers of the

plaster units but in small quantities. Due to heavy dependence upon orders from Punjab based

traders, these units operate on demand base, so most of the time these remain nonoperational.

As a result, the investment in such units is of small scale with an average investment of Rs.

01 Million.

FIGURE 7: COARSE GYPSUM POWDER PROCESSING

Gypsum rock from mine is manualy hammered into required pieces and fed into the

syndicators for further crushing. Normally the crushed powder is manually loaded on trolleys

without sieving. For this, the plant has a daily capacity of 1,200 bags (60 Tons per day).

In case of the demand of fine powder, it is finally grinded with local grinder/chakki and then

sealed with the help of a small hand holded machine.



FIGURE 8: GRINDING MACHINE

FIGURE 9: SEALING MACHINE

Gypsum Crush Plants

Gypsum crush plants are the medium scale business with an average investment of Rs. 07

Million. These units crush the handpicks and through jaw crusher and then with the help of

conveyor belts and sieves, separate them into different sizes from 1 inch to 5 inch.



FIGURE 10: GYPSUM CRUSH

The gypsum rock after crushing in the Jaw Crusher is sieved into various sizes and then

dumped in shape of piles at site.

Plaster of Paris

Plaster of Paris Plants are of medium scale with an average investment of Rs. 9 Million All of

the Plaster of Paris manufacturing units are also engaged in the demand based Uncalcined

Gypsum Powder production.

FIGURE 11: PLASTER PROCESSING

TABLE 6: PROCESSING UNITS IN KOHAT DIVISION- BY LOCATION

Operation Area Number of Units

Gypsum Powder

Processing

Speena, Main Indus Highway

(Karak)

07

Krapa, Bannu Road (Karak) 04

Shakardara (Kohat) 01

Gypsum Crush Plants Indus Highway

Main Highway Karak (04)

Nari Panos Road Karak (13)

15

Plaster of Paris Plants Bannu Road (Karak) 130

Kohat- Rawalpindi Road (Kohat) 01

Total 158

2.2.2. Products

Mining

All of the mines produce boulders of handpick size. Only few of them, having heavy Earth

moving machinery are able to break the handpicks into smaller sizes by using Jack Hammers.

Normally, the product of gypsum mines is in shape of rock bigger than 2 ft in size, which is

then crushed as per its application either by labor or by Jack Hammer. Few advanced mines

with heavy earth moving machinery also crush it below 2 ft through Jack Hammers.



FIGURE 12: GYPSUM ROCK OF PAKISTAN- TECHNICAL DETAIL1

TABLE 7: MARKETING MIX OF MINES

Product Size Target Market Packaging Price Range

(Rs./Ton)

Gypsum Rock 2’ Local

▪ Cement Plants

▪ Crush Plants

▪ Plaster Factories

▪ Powder Factories

No packing 200 to 360

1 Source: Full name of Dong Feng Board (DFB) Gypsum



Processing

TABLE 8: MARKETING MIX OF PROCESSING UNITS Description Size Target Market Packaging Price/Unit

(Rs.)

Gypsum

Powder

▪ Local Plaster of

Paris factories

▪ Domestic

Agriculture farms

▪ Exports to India

Recycled bags: 50 Kg

New Bags: 52 Kg

55/bag

Gypsum

Crush

▪ Cement Plant of

Lakki Marwat,

Khyber

Pakhtunkhwa

▪ Exports to Mini

cement plants of

India

No packing 320/Ton

Gypsum

Plaster

▪ Surgical Uses

▪ Construction

industry

Recycled bags: 50 Kg

New Bags: 52 Kg

200/bag

The crush is tested as per the existence of Gypsum content in the sedimentary rock.

Normally, it ranges between 80 to 95%, and the gypsum of Kohat region has proven to be of

best quality, i.e. above 90%.

In case of the gypsum powder and plaster the standard practice is to sieve the small crush for

impurity and then grind it to powder so that to obtain fine quality powder and plaster. As

compared to this, only a handful of the progressive mine owners practice this, otherwise the

majority of processors simply crush the lumps into powder without any sieving. This type of

conventional practice renders the quality deteriorated. The performance of the powder

depends upon its crystals’ sizes and shapes.

As per the description of the “Dongfeng Board” for its plaster, the following standard can be

considered for Pakistan.



TABLE 9: TESTING PARAMETERS OF PLASTER

Description Properties

Chemical Composition Calcium Sulphate Hemihydrates CaSO4. ½ H20

Fineness 4 to 6% only remaining on sieve 200u

Initial Setting Time From 3 minutes for speedo plaster to 10 minutes as per

requirement

Final Setting Time From 12 minutes for speedo plaster to 30 minutes as per

requirement

Compressive Strength Greater than 10.5 MN/m2 or 1525 psi (pure plaster)

Density 1100 kg/meter cube

Thermal Conductivity 0.22 W/m. K (i.e. gypsum plaster’s insulation is about five

times better than cement-sand plaster

2.2.3. Production Statistics

Mining

The production has been increasing due to the following four factors:

➢ Commencement of activities on new mine leases;

➢ New quarries on existing mine leases;

➢ Re-operationalization of mines which may have closed due to community issues;

management problems, or departmental orders;

➢ Shifting of the mining techniques from explosive based mining to heavy machinery

based operations.

TABLE 10: PRODUCTION STATISTICS OF MINES

Type of Mining No. of

Operational

Mines

Average Annual

Production (Tons)

Total Annual

Production (Tons)

Mechanized mining 59 59,400 3,504,600

Processing

TABLE 11: PRODUCTION STATISTICS OF PROCESSING UNITS

Description No of

Units

Average Annual

Production (Tons)

Total Annual

Production (Tons)

Gypsum crush 15 55,200 828,000

Gypsum powder 12 2,850 34,200

Plaster of Paris 66 3,360 221,760

Total 93 1,083,960



Gypsum Crush Processing

TABLE 12: PRODUCTION OF GYPSUM CRUSH- INDIVIDUAL UNIT

Rock Input Wastage Crush Output

Tons/Day Tons/Year % Tons/Year

230 69,000 13,800 55,200

TABLE 13: CUMMULATIVE PRODUCTION OF CRUSH

Number of Crush Plants Tons/Unit Tons/Year

15 55,200 828,000

Gypsum Uncalcined Powder Processing

The installed capacity of a single processing unit is 20 tons per day. As these units are heavily

dependent on orders from India and Punjab, so these remain operational on demand basis for

about 150 days per year.

TABLE 14: PRODUCTION OF UNCALCINED POWDER

Rock Input Wastage Crush Output

Tons/Day Tons/Year % Tons/Year

20 3,000 150 2,850

TABLE 15: CUMULATIVE PRODUCTION OF GYPSUM CRUSH UNITS

Number of Crush Plants Tons/Unit Tons/Year

12 2,850 34,200

Gypsum Plaster (Calcined Powder/Plaster of Paris) Processing

Each factory engaged in plaster of Paris manufacturing has a single syndincator capable of

producing 20 tons per days, but the operating capacity of such unit is determined by the

following two factors:

1. Type of Furnace by Heat Source: Gas or Coal/Wood

2. Number of Furnances

TABLE 16: PRODUCTION OF GYPSUM PLASTER- INPUT VS OUTPUT OF AN INDIVIDUAL UNIT

Input Rock Input Wastage Plaster Output

Technology Tons/Day Tons/Year % Tons/Year

Gas Operated Plants 30 9,000 450 8,550

Coal/Wood Operated Plants 12 3,600 180 3,420



TABLE 17: PRODUCTION OF GYPSUM PLASTER- INDIVIDUAL UNIT

Technology Bags/Hour Hours Days Bags/Year

Gas Operated Plants 70 8 300 168,000

Coal/Wood Operated Plants 28 8 300 67,200

The working of this specific document is based on the coal operated furnces.

2.3. Institutional Framework

The type of institutions by role are different for mining and processing sub sectors, explained

as below;

2.3.1. Minerals Development Department

Following departements are responsible for the development of minerals in the province:

Pursuance to the implementation of National Mineral Policy (NMP) and directives of the

Chief Executive of Pakistan on June 04, 2001, the Directorate General Mines & Minerals was

established vide notification dated August 18, 2001. . The creation of the DGMM is based

on NMP 1995 in line with the Australian Technical Aid (AusAid) consultants report, 1997.

Provincial Minister

Mines and Minerals Development Department

Secretary

Mines and Minerals Development Department

Director General

Directorate General of Mines and

Minerals

Chief Inspector Mines

Inspectorate of Mines and Minerals

Commissioner Mines

Commissionarate of Mines and Minerals



After 18th Amendment to the Constitution of Pakistan, the Minerals Development

Department (MDD) has been given the custodial rights of mineral resources of Khyber

Pakthunkhwa. First ever Provincial Mineral Policy was formulated in 2014. In light of

Khyber Pakthunkhwa Minerals Policy 2014, Khyber Pakhtunkhwa Mineral Sector

Governance Act 2017 and Rules 2017 have been formulated and promulgated.

In the year 2014 the department was further divided into three departments, namely:

➢ The Directorate General of Mines and Minerals

➢ Inspectorate of Mines and Minerals

➢ Commissionrate of Mines and Minerals

Directorate of Mines and Minerals

It has the following responsibilities:

• Grant of mineral titles

• Collection of rents & royalties on minerals

• Control of unauthorized excavation and transportation of minerals

• Compilation of mineral production data

• Geological Mmapping of mineral bearing areas

• Evaluation of mineral resources

• Promotion and exploration of minerals

• Provision of mineral testing facilities

• Technological management of mineral titles

Inspectorate of Mines and Minerals

The department is responsible for:

• Mining laws implimentation

• Training on mining safety

• Mines accidents investigation and forwardig the cases to commissionrate of

worksman compensation

• Mines site inspection

Commissionrate of Mines and Minerals

The commissionarate has the following responsibility of Worksman compensation

:

• Collection of cess tax

• Marriage funds

• Childern Education



• Accidents Compensation in case of major injuries or death during work

2.3.2. Forestry, Environment and WildLife Department

Forestry, Environment & Wildlife Department is striving to improve the Forest, Environment

and Wildlife through development & application of innovative technologies in Forest,

Environment and Wildlife and efficient management of natural resources.

2.3.3. Pakistan Mineral Development Corporation

PMDC is an autonomous corporation under the administrative control of Ministry of

Petroleum and Natural Resources , Government of Pakistan. It was established in 1974 with

an authorized capital of Rs.1,000 million to expand and help mineral development activities

in the country.

It is involved in exploration and evaluation of economic mineral deposits, preparation of

techno-economic feasibility reports, mining and marketing. Currently it is operating two salt

mines at Karak.

2.3.4. Labor

The Directorate of Labour (like its administrative Department i.e. Labour Department) is the

custodian of the guaranteed rights of the workers like right to organize, right to collective

bargaining, participation in the affairs of the respective organization, health & safety,

minimum wages, compensation, etc.. For realization of its role, it enforces various labour

laws. Through the implementation of the labour laws it ensures compliance of the

International Labour Standards and thus contributes to achieving GSP, GSP+, GSP++, MFN,

etc. status by securing higher position in the grading system applied by the granting countries,

regions and organizations.

It also enforces international system of weights and measures in the province. Besides, it

carries out awareness raising drive in the workers, employers and other stakeholders on

labour issues, labour laws and contemporary issues.

2.3.5. Environmental Protection Agency

Administer and implement the Act 1997, its rules and regulations Review of IEE/EIA,

preparation of procedures and guidelines. Preparation revision and enforcement of NEQS

(Industries, Municipalities, Vehicular emission) Establish & maintain laboratories,

certification of laboratories for conducting "tests and analysis" Assist local

Councils/Authorities, Govt. Agencies in execution of projects.

Establish a system for surveys, monitoring, examination and inspection to combat pollution

Conduct training for Govt. functionaries & industrial management Provide information and

education to the public on environmental issues Publish the Annual State of the Environment



report. Survey & Qualitative & Quantitative data on air, soil, water, industrial/Municipal &

traffic emissions Take measures to promote environment related R&D activities.

The gypsum miners and processors have to obtain NOC from EPA before commencement of

operations.

2.3.6. The Industries, Commerce, and Technical Education Department

(Government of Khyber Pakhtunkhwa)

This department is striving to promote industrial development, trade and investment in

Khyber Pakhtunkhwa. Industrial Research, Industrial training (including training of

demonstration parties) Industrial exhibition within the country Survey of industries, Trade,

and commerce, within the Province, including Government commercial undertakings,

Merchandise Marks Act, Registration of Accountants, Auditors Certificate Rules, Partnership

Act, trade condition reports, trade inquiries and agreements. Registration of Joint Stock

Companies, Firms, Societies Store Purchase Department, purchase of stores and capital goods

including stores for Government Presses and Public Works Department.

2.3.7. SMEDA Khyber Pakhtunkhwa

SMEDA is a federal government organization working under Ministry of Industries and

Production for the facilitation and development of Small and Medium Enterprises in

Pakistan. SMEDA plays an important role in long term development and growth of the

Gypsum mining and processing cluster Kohat. SMEDA provides policy and strategy level

inputs to DGMM Khyber Pakhtunkhwa in formulation of investment friendly policies.

SMEDA also provides help desk facilitation, legal facilitation, capacity building, networking

and linkages development directly to SMEs.

SMEDA has designed number of long term economic development initiatives including rock

mining training institute, model quarry project, industrial state and etc. In collaboration with

Inspectorate of Mines and Minerals the SMEDA has provided various trainings on controlled

blasting techniques, and mining safety,.

SMEDA has also upgraded 02 mining and processing enterprises by providing matching

grant support through the MDTF funded ERKF Project for procurement of machinery.

2.3.8. Frontier Mine Owners Association (FMOA)- Kohat Division

Frontier Mine Owners Association is a registered association of all mine owners across

Khyber Pakhtunkhwa representing the entire mining sector of all minerals in the Province.

This association has members from Kohat cluster as well. The association represents

stakeholders from both marble mining and processing of like other minerals at every

platform.



The office bearer “Mr. Abdul Qayyum” of FMOA, Kohat division is also a member of the

Project Steering Committee (Research/Feasibility Study Mineral Sector Transformation

Plan).

2.4. SWOT Analysis

2.4.1. Strengths

Local reserves of Raw Material (Gypsum) in huge quantity.

Availability of labor on contract system.

Simple processing operations having minimum reliance upon skilled labor.

Low costs of land acquisition.

Availability of locally fabricated low cost machinery.

No cheaper substitutes available.

2.4.2. Weaknesses

Problems and delays in obtaining licenses for use of explosives for mining.

Intense competition on price basis due to very limited product mix.

▪ The bargaining power of the suppliers remain weak for unprocessed gypsum

as there are already a large number of suppliers in the market.

▪ The bargaining power of the buyers is high.

Poor quality of processed powder in terms of mesh sizes.

Farmers unaware of the soil conditioning effects, therefore negligible domestic sale.

Processing units relying upon machinery which is cheaper but results in loss of

thermal energy, so increase operational costs as well as threat to environment in shape

of air pollution.

Local machinery is not energy efficient and causes over use of gas whereas the coal is

also expensive because of being procured from Tarnol and Hyderabad.

2.4.3. Opportunities

The business of mining and processing can be started with small investment.

Increasing demand of gypsum crush domestically as well as in the neighboring

country of India

The existing major exporters to India are Thailand and Iran but future supplies from

both the countries is expected to decrease due to their own domestic consumption and

reduced production.

Increasing demand of green products throughout the world.

The CPEC (Kashgar to Gawadar) may reduce the transportation costs for exports via

sea.

Increasing demand of gypsum boards in Central Asian Republics and Russia.

High costs of gypsum tiles from Denmark to Sri Lanka means new market for

Pakistani gypsum tiles. Therefore, investment in gypsum ceiling tiles in the cluster.



Increased urbanization and improved socio economic conditions of Kohat division’s

people paving way for improved housing.

Climate change and global warming increasing the demand of products in

construction offering optimum protection against temperature.

2.4.4. Threats

Increased investments in conventional products of gypsum crush, powder, and plaster

of Paris leading to increased competition.

Security situation and the increased restrictions on licenses for explosives.

Growing reluctance of transporters to take carriage to Wahga border due to delays in

unloading and clearance.

Ban on gas connections for plaster processing industry.

Increased production and export by Oman through the port of Salalah with lower

prices of gypsum anhydrite.



3. DEMAND AND SUPPLY GAP ANALYSIS - LOCAL MARKET

Heavy dependence of the cluster upon the conventional buyers in shape of Cement Factories

and the distances involved, makes the miners and crush processors comprise upon profits

resulting from lower prices. The greater the distance the lesser the per ton price.

Inter Provincial Marketing Factors

Gypsum rock of the Kohat Division despite having superior quality as compared to the rest of

the country fetches lower prices while competing with the mines of Punjab. That is the

average prices of Kohat Cluster gypsum rock at mine is Rs. 400 whereas the miners of

Punjab get Rs. 500 per ton. This is mainly because of the lower freight cost advanatage of

Punjab due to being closer to the Sind, and Wahgah border. For example, the average cost of

gypsum transportation fom southern Punjab to Wahgah border is Rs. 900 per ton in

comparison to the Kohat Cluster’s Rs. 1,200 per ton. Due to this difference, the miners and

crush plants of Kohat cluster have to reduce the per ton gypsum rock prices of mine site.

Freight

Charges

Price of Gypsum Rock



Inter Cluster Marketing Factors

The mines of Jatta Ismail Khel are able to get the highest prices due to their supply and

proximity to the plaster of paris factories on Bannu Road located within 07 Kms distance

from them. Those of the Speena Banda, on Indus Highway sell on lower average prices of Rs.

300 because of the loading labor and transportation cost to the processing industries. The

mines of Kohat Pindi road are supplying to the cement factories of Khyber Pakhtunkhwa and

Punjab at an average price of Rs. 360 per ton. However, the mines of Nari Panos area either

supply to the nearest crush plants, or distant cement plants, so their prices are lowest of entire

cluster at Rs. 200 per ton.

FIGURE 13: SUPPLY CHAIN OF GYPSUM CLUSTER- KOHAT DIVISION

Note: Processing in the coloured box are done within Kohat Division. 67 plaster plants are temporarily closed



3.1. Quantum of Supply

The mining activities are halted during severe weathers, and neglible during the month of

Ramadan. Similarly, the cluster activities are closed during extended eid holidays and also at

the time of crop sowing and harvesting. All these factors are incorporated during computation

of operational capacity of a mine or processing unit.

3.1.1. Supply from Mines

The supply from gypsum mines of Kohat Division started in early 80’s which can be mainly

attributed to the establishment of Cement factories in the province. Discussion with public

sector organizations, and private sector key informants revealed that the production from the

mines is underreported. The main reason, is the illegal mining in shape of subletting and the

forceful occupation by some local elements. The survey teams find it difficult to visit such

sites due to sense of insecurity. In addition to this, dumping at informal open area stocking

yards makes it further difficult to assess the material inflow and outflow.

On the basis of response from 10 mines, the estimated average production was observed to be

198 Tons per day and with 300 working days, the annual supply from 59 mines is calculated

to be 3.5 million tons.

During the same survey 46 % (1.6 million tons) of the gypsum rock was reported to be

supplied within the Khyber Pakhtunkhwa, 35% (1.23 million tons) to Punjab and remaining

19% (0.7 million tons) to Baluchistan and Sindh.

Small Scale Mines

On average the installed capacity of a small scale labor intensive mine is 40 Tons/ Day

whereas the capacity utilization is 70%.

Medium Scale Mines

The installed capacity of mines with compressed air machinery is 525 tons per day, and the

operational capacity of 210 tons per day. With the advent of heavy earth moving machinery

to mines, the daily installed capacity has increased to 896 Tons per day, while the

operational capacity of Kohat Division is 448 Tons per day.

The capacity of the stocking yards is about 24 tons while on the daily basis about 8 tons is

loaded.



3.1.2. Supply from Processing Units

A. The installed capacity of plaster of Paris factories though remains the same, but its

utilization or operational capacity depends upon the source of energy used for heating the

kilns/furnaces. The gas operated factories process 70 bags (50 Kg per bag) in 1 hours whereas

in case of coal and wood the time required is 2.5 to 3 hours for the same quantity, therefore

these process 28 bags (50 kg per bag) in an hour. After the crack down of the district

administration against illegal connection, 64 gas operated units were closed, so the capacity

utilization decreased drastically.

TABLE 18: PRODUCTION DETAIL OF PROCESSING UNITS

Description No of Units

Installed

Capacity

(Tons/Year)

Capacity

Utilization

(Tons/Year)

% Capacity

Utilized

Gypsum Crush 15 2,484,000 828,000 33%

Gypsum Powder 12 615,600 34,200 5%

Plaster of Paris 130 2,440,800 221,760* 9.7%

Total 157 5,540,400 1,099,800 20.6%

*Capacity utilization is estimated on the basis of currently 66 operational units on 8 hours shift basis

3.2. Supply Trends

The supply of gypsum from the mines of Kohat division has been continuously increasing

due to the increased number of mines converting to modern technology. The supply of

uncalcined gypsum powder mainly remains the demand based operations of processing units.

In case of gypsum plaster, during the last few years, the district administration of Karak has

taken strict measures against illegal gas connections by Plaster of Paris factories. Though the

survey of local communities revealed that discrepancies still exist, however, the shifting of

plants to coal and wood from gas results in decrease of production by more than 50%.

3.3. Quantum of Demand

fluctuating because of the dependence upon the exports of raw gypsum to india which not

only faces competition from Iran but also deeply affected by the India Pakistan border

relations. The supply of gypsum uncalcined powder is dependent upon orders from Punjab

for domestic use and exports to India. For gypsum crush, the supply is mainly directed to the

mini cement factories of India through traders of Punjab. The detailed study of the gypsum

value chain shows that annual procurement of gypsum from Kohat Division is 3.53 million

tons.



Estimated Annual Rock Procurement by Local Processing: 2

The estimated rock demand within the Kohat Division is about 1.43 Million Tons. However

this keeps highly fluctuating (increasing upto 2 million tons) because of the illegal operations

by plaster of paris units from time to time, and the increased demand from exporters to India.

➢ Crush plants: 1,035,000 Tons

➢ Gypsum powder plants: 36,000 Tons

➢ Plaster of Paris plants: 233,442 Tons

➢ Cement factory: 130,000 Tons

Estimated Annual Procurement of Gyspum Rock by Processing sector outside Kohat Division

The demand for gypsum rock of cluster, outside the Kohat Division is 1.96 million tons.

➢ Plaster of Paris factories at Peshawar and Nowshera 117,600 Tons

➢ Cement factories of Baluchistan, Punjab and Sindh 1,540,000 Tons

➢ Gypsum Boards manufacturing 180,000 Tons

➢ Exports to India from Kohat Division: 124,800 Tons

3.4. Demand Trend

The bulky nature of gypsum and comparatively low prices has resulted in a global

phenomenon that demand for gypsum handpicks and crush comes from nearest locations of

processing industry.

The cumulative demand of gypsum by cement factories of Pakistan is 1.3 million tons. Later

on during the early 1990s, with the establishment of gypsum powder, crush, and plaster of

Paris factories additional demand of 1.7 million tons was created. In the year 2005, the

commencement of gypsum boards production line by (Dong Feng Board) gypsum industries

paved the way for gypsum value addition as per international best practices. Today the

demand of gypsum board from 03 gypsum board units is 0.6 million tons. Finaly, the

demand by India is 3.9 million tons. This makes the total demand to be about 7.5 million

tons.

3.5. Key Market Segments

Supply of Gypsum products mainly depend upon the construction industry accounting for

about 99% of the gypsum products consumption, and 1% goes to the agricultural farms of

Punjab.

Following are the Key Market Segments for gypsum of the Kohat Division:

2 Source: Random Survey of the Processing Sector, and Frontier Mine Owners Association



➢ Mine Lumps: Cement Factories for Contraction Industry

➢ Gypsum Crush:

▪ Cement Plants of Cherat and Lakki Marwat

▪ Exporters of Punjab to India

➢ Gypsum Powder:

▪ Local Plaster of Paris Plants

▪ Agriculture farms of Punjab

➢ Plaster of Paris: Construction industry of Khyber Pakhtunkhwa and Punjab

3.6. Potential Niche Markets

Due to being quick to install and environment friendly, the dry prefabricated gypsum

products is replacing the plaster and cement in global construction industry. With the advent

of Gypsum Boards and Tiles to Pakistan’s construction industry, the production of these

products started in the country.

Potential niche markets and products are:

▪ Gypsum Boards: Housing schemes, and commercial plazas of the country

▪ Gypsum Tiles: As above

▪ High quality plaster for dental and orthopedic applications in Pakistan

3.7. Expected Growth of Cluster Products

The construction sector contributes 2.8% to GDP of Pakistan and growing with an average

rate of 5.1%, this is estimated to reach 4% in the year 2025, that is, Rs. 1,763 Billion. Taking

into consideration the growth rate of the construction industry, the CPEC, emphasis of

government on construction of dams and housing schemes, and the growth rate of the cement

industry dispatches, the cumulative domestic demand of gypsum from the year 2018 to 2025

is forecasted to be 37.5 Million tons.

FIGURE 14: PROJECTED CONSUMPTION OF GYPSUM IN PAKISTAN (MILLION TONS)

2.2 2.3 2.5 2.62.8

2.93.1

3.3

1.6 1.71.8 1.9 2.0 2.1 2.3 2.4

3.84.0

4.34.5

4.85.1

5.45.7

2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5

Gypsum in Cement Other Uses Total Gypsum



4. DEMAND AND SUPPLY GAP ANALYSIS - EXPORT MARKET

4.1. Analysis of Current Exports

The exports of Pakistan’s gypsum products for the year 2017, were around Rs. 1,450 Million.

Gypsum anhydrite has a dominating share of 96.7% in the total exports of gypsum products.

In the corresponding year, Pakistan exported a total of 0.24 Million Tons Gypsum Anhydrite

worth around Rs.1,400 Million and remained among the top ten exporting countries with 9th

position.

TABLE 19: PAKISTAN'S EXPORTS OF GYPSUM PRODUCTS

Products Quantity (Tons)

Gypsum Anhydrite 240,052

Gypsum Plaster 342

Gypsum Boards and Allied 1,890

Gypsum Tiles and Allied 210

Article of Plaster 4

Total 242,498

About 14% of the Gypsum produced in Pakistan is exported in simply crushed or powdered

form. India has been the biggest importer for Pakistan with 99.5% of its total exports of the

same product going to India.

TABLE 20: TOP 03 EXPORTERS OF GYPSUM ANHYDRITE TO INDIA

Exporter Total Value

(Million USD)

Total Quantity

(Million Tons)

Unit Value Paid by

India (USD/Ton)

Oman 48.73 2.43 20

Iran 29.92 1.55 19

Pakistan 15.64 0.69 23

4.2. Analysis of Country wise Existing Demand

World’s total imports value of gypsum products is USD 3.7 Billion. Of this, the shares of

different products are as given below:

Gypsum Anhydrite: 30%

Gypsum Plaster: 14%

Gypsum Boards: 34%

Gypsum Tiles: 16%

Other Articles of Plaster: 6%



TABLE 21: TOP THREE IMPORTING COUNTRIES OF GYPSUM PRODUCTS

The total demand of India for gypsum anhydrite is about 4.96 Million Tons + domestic

production.

4.3. Demand and Supply Gap

World’s gypsum demand is increasing and the imports value is USD 0.8 Billion in excess to

the exports. The gap is mainly due to the gypsum anhydrite, the imports of which are USD

0.5 Millions in excess to exports.

TABLE 22: WORLD' GYPSUM TRADE

Product Exports Value

(Billions USD)

Imports Value

(Billion USD)

Gypsum Anhydrite 0.6 1.1

Gypsum Plaster 0.4 0.5

Gypsum Boards and Allied 1.1 1.3

Gypsum Tiles and Allied 0.6 0.6

Article of Plaster 0.2 0.2

Total 2.9 3.7

Importer Value

(Million USD)

Quantity

(Million Tons)

Gypsum Anhydrite

Indonesia 357.0 2.1

USA 90.2 4.9

India 82.2 3.9

Gypsum Plaster

Nigeria 39.1 N/A

Belgium 38.0 0.4

Netherlands 32.7 0.2

Gypsum Boards

USA 130.2 0.46

France 106.7 0.44

Canada 84.9 0.45

Gypsum Tiles

Switzerland 58.2 0.12

Canada 37.6 N/A

France 29.4 0.09

Articles of Plaster

USA 24.9 N/A

Singapore 20.2 0.02

Saudi Arabia 15.9 0.01



The international gypsum products trade of Pakistan is given in terms of quantity.

Currently the trade is in favor of Pakistan, with the exports exceeding the imports by

226,710 tons.

TABLE 23: PAKISTAN'S GYPSUM PRODUCTS INTERNATIONAL TRADE

Products Exports (Tons) Imports (Tons)

Gypsum Anhydrite 240,052 1,145

Gypsum Plaster 342 1,214

Gypsum Boards and Allied 1,890 7,286

Gypsum Tiles and Allied 210 826

Article of Plaster 4 5,317

Total 242,498 15,788

Total demand of gypsum was estimated to be 271 Million tons for the year 2017, against

which the production was 263 Million tons, indicating towards the gap of 8 Million tons. By

year 2025 the gap is estimated to widen with the global Gypsum demand having 10% growth

rate will reach 870 Million Tons whereas the production to be around 620 Million Tons

assuming growth rate of 3.6%.

The domestic demand of raw gypsum is forecasted to be 5.7 Million Tons in the year 2025.

The country’s international demand and supply gap for gypsum products in terms of value

will be 2.9 Million Tons.

TABLE 24: PAKISTAN'S INTERNATIONAL TRADE PROJECTION (YEAR 2025)

Product Exports (Tons) Imports (Tons)

Difference

(Tons)

Gypsum Anhydrite 4,752,766 13,764 4,739,002

Gypsum Plaster 6,771 333,990 -327,219

Gypsum Boards 37,420 1,368,152 -1,330,732

Gypsum Tiles 4,158 72,164 -68,006

Articles of Plaster 79 24,210 -24,131

Total 4,801,194 1,812,281 2,988,913

4.4. Expected Growth of Cluster

The previous trend combined with CPEC related activities will result in increased

construction activities in Pakistan. On the basis of current activities the gypsum cluster is

projected to stagnat at the current level. The implementation of proposed intervention may

change the entire scenario by the year 2025. The focus should remain on the utilization of

gypsum rock into highly profitable value added products rather than increased output from

mines.



FIGURE 15: CURRENT VS PROJECTED SCENARIO OF THE CLUSTER

4.5. Potential Niche Market with Growth Trends

Given the total gypsum production, the percentage of gypsum going to boards and the

gypsum consumption per unit, the global gypsum boards production is calculated to be 11.27

Billion Square Meters, and 24.16 Billion Square Meters in the year 2017 and 2025

respectively. By the year 2025, the market for gypsum board is expected to be around 30.7

Billion Square Meter reflecting the gap of about 4.54 Billion Square Meters.

Finally, for the year 2017, out of the total USD 25.45 Billion worth Global Ceiling Tiles

market, the share of gypsum tiles was 16% with a value of USD 4.1 Billion and growing at a

rate of 10.8%, this will reach USD 9.3 Billion in 2025.

TABLE 25: GYPSUM PRODUCTS' SHIFT OF CONSUMPTION

Product Current Market

Share

Market Share by

2028

Cement 61% 42.5%

Gypsum Boards 33% 42.5%

Others 6% 15.3%



4.6. Key Requirements of Potential Market

Owing to the increased commercial activities in the advanced economies, the demand of

prefabricated gypsum products will keep increasing. The potential markets requirements are

as under:

4.6.1. Gypsum Anhydrite

➢ Cement industry’s key requirement is the gypsum anhydrite lumps and crush with

purity above 80%.

➢ Plaster of Paris factories requires gypsum with purity above 80% and in white colour.

4.6.2. Calcined Gypsum

Calcined gypsum is the demoisturised gypsum powder with the following required

specification:

TABLE 26: REQUIREMENTS OF GYPSUM BOARDS FOR PLASTER

Chemical Composition Calcium Sulphate Hemihydrates CaSO4. ½ H20

Fineness 4 to 6% only remaining on sieve 200u

Initial Setting Time From 3 minutes for speedo plaster to 10 minutes as per

requirement

Final Setting Time From 12 minutes for speedo plaster to 30 minutes as per

requirement

Compressive Strength Greater than 10.5 MN/m2 or 1,525 psi (pure plaster)

Density 1100 kg/meter cube

Thermal Conductivity 0.22 W/m. K (i.e. gypsum plaster’s insulation is about five

times better than cement-sand plaster



4.6.3. Gypsum Boards

Gypsum boards is a product with calcined gypum dried within the two layers (upper and

lower) of paper or fiber.

TABLE 27: KEY REQUIREMENTS OF GYPSUM BOARDS

Product Application

Abuse-resistant gypsum

panels

Greater resistance to surface indentation, abrasion and penetration

than standard gypsum panels

Eased edge gypsum board, As an aid in custom finishing of joints.

Exterior gypsum soffit

board

Undersides of eaves, canopies, carports, and other commercial and

residential exterior applications with indirect exposure to the

weather.

Foil-backed gypsum board Aluminum foil laminated to the back surface of regular gypsum

board serve as vapor barriers

Gypsum base As a base for thin coats of hard, high strength gypsum veneer

plaster.

Gypsum liner board As a liner panel in shaft walls, stairwells, chase ways, area

separation fire walls, and corridor ceilings. It has a special fire-

resistant core encased in moisture-resistant paper.

Gypsum sheathing As a protective fire resistive membrane under exterior wall

surfacing materials such as wood siding, masonry veneer, stucco

and shingles. It also provides protection against the passage of

water and wind and adds structural rigidity to the framing system.

The noncombustible core is surfaced with water repellent paper; in

addition, it may also have a water-resistant core.

Impact-resistant gypsum

panels

Greater resistance to the impact of solid objects from high traffic

and vandalism than standard gypsum panels

Mold-resistant board Preventing the growth of mold and mildew on the board’s surface.

Regular gypsum board As a surface layer on walls and ceilings.

Sag-resistant board Offers greater resistance to sagging than regular gypsum products

used for ceilings where framing is typically spaced 24 inches

Type C or Proprietary

Type-X gypsum board

In some fire rated assemblies. Additional additives give this

product improved fire resistive properties.

Type X gypsum board Improved fire resistance made possible through the use of special

core additives.

Water-resistant gypsum

board

Serves as a base for ceramic or plastic wall tile or plastic finish

panels in non-wet areas.



4.7. Analysis of Core Competing Products and Countries

About 99% of the cluster’s supply goes to the construction sector. In case of raw gypsum, the

threat of competing product is negligible. It is actually on demand side that, globally the

cement industry and gypsum boards compete with each other for procurement of crude

gypsum. In both cases the demand of gypsum just switches from one sector to another.

However in the advanced economies, the crude gypsum has to compete with synthetic

gypsum for production of gypsum boards. The threat of synthetic gypsum is negligibly small

in the developing economies like Pakistan.

The gypsum cluster of Kohat has to compete with the gypsum products of other countries.

FIGURE 16: PAKISTAN'S COMPETITORS

Product Top Exporters of World Top Competitors

Gypsum Anhydrite Thailand, Iran, Oman Oman and Iran

Gypsum Plaster Germany, Thailand, Turkey Thailand, Oman, China, Iran,

Bahrain, Saudi Arabia

Gypsum Boards Mexico, USA, Thailand Oman, Saudi Arabia, UAE, China,

Thailand, Belgium, Germany,

France

Gypsum Tiles Germany, China, USA China, Turkey, Tunisia, Egypt,

Denmark, UAE, Singapore

Articles of Plaster China, Malaysia, Saudi Arabia China, Malaysia, Saudi Arabia

4.8. Cluster’s Existing and Potential Competitiveness

The clusters’ current competitiveness lies in its strength of:

➢ Abundant gypsum reserves

➢ Using low cost local machinery

➢ Proximity to the expanding market of India for raw uncalcined gypsum

➢ Plaster of Paris factories and artisans for construction industry

➢ Ability to supply required quantity and quality of uncalcined gypsum to cement

factories.

➢ Well established processing cluster near the mines on Bannu road.

Keeping in view the future demand and shift in product types to green products, the cluster

must have to develop competitiveness in:

✓ Mechanized Mining for increased production

✓ Machinery upgradation at Plaster of Paris Units for energy efficiency and quality

improvement.

✓ Establishment of gypsum boards and tiles processing units

✓ Environment friendly operations



4.9. Major Drivers of Success or Failure

The thumb rule for gypsum products is the establishment of gypsum processing units in the

nearest areas of mining, because globally the prices of crude gypsum are low. In Pakistan, the

cost of transportation to buyers of crude gypsum is 70% of the procurement value. For

example, the transportation may cost Rs. 500 to 2,500 per ton for the crude gypsum of worth

Rs. 350 per ton at mine. Therefore the smaller the distance between mines and processing

units, the higher will be the profit margin.

The labor intensive small scale mining is gradually becoming non viable due to lowest profit

margins. Mine mechanization will be the key success factor in the near future.

For gypsum crush and powder units, the availability of electricity is essential. Similarly, in

case of the Plaster of Paris and Gypsum Boards processing units the thermal energy for

kilns/furnaces plays decisive role in setting the profit margins. The source of this energy, and

efficiency of kilns may reduce the operational costs of Plaster and Gypsum units manifolds.

Further the gypsum boards also depend upon the best possible target market country with

high demand and higher prices per unit.



5. CLUSTER GAP ANALYSIS IN THE LIGHT OF INTERNATIONAL

BEST PRACTICES

Several developed countries following the basic definition of economics, consider the mining

as primary industry. In the gypsum mining and processing sector, initial crushing is done in

the mining area after which the crush is shifted to the processing zones for further processing.

The focus of these countries remains on the value addition rather than export of crude

gypsum. For this, policies are formulated accordingly so that to ensure optimum value

addition, improved infrastructure, modern machinery and techniques, compliance to labor

laws, access to finance and environment friendly mining and processing.

5.1. Mining

5.1.1. Infrastructure

In the countries with successful mineral sectors the state first provides basic road network,

electricity, gas, water and communication and then allot the lease in that particular area. In

Chile and Peru the private sector develops mine access roads and the amount incurred on

these roads is deducted from the royalty.

FIGURE 17: MINING INFRASTRUCTURE IN IRAN

As compared to the international best practices, the mining cluster of Kohat Division has

flourished by the virtue of being located on the main highways. Mine access roads have been

developed by the private sector on self-help basis. Electricity is not available in mining areas



and the mine owners have to arrange water by themselves. Telecommunication is in shape of

the mobile phone network which still is problem in many far flung areas.

FIGURE 18: MINES TO MAIN ROADS IN KOHAT DAVISON

FIGURE 19: MINE ACCESS ROAD IN KRAPA, KOHAT DIVISION



5.1.2. Technology

The gypsum mining of advanced economies is done with the help of heavy earth moving

machineries.

FIGURE 20: SURFACE MINING- TECHNOLOGY AT GYPSUM MINES OF OMAN

FIGURE 21: SUB SURFACE GYPSUM MINING IN FRANCE3

A compact machinery, for example, the Vermeer terrain leveler has recently been introduced

by few manufactures, which is capable of excavating the gypsum rock in small crush shape

3 Photo Credit: www.gettyimages.com



and eliminating the need of blasting at mine and the need of primary crushing unit.

In the developing countries, gypsum mining relies upon the drilling and blasting. The gypsum

cluster of Kohat has the same practice, so the second hand equipment, like drills and air

compressors are used. Though crushing is still done manually at several mines but due to the

higher costs and lower production the trend of using second hand hammer machinery has also

gained popularity.

FIGURE 22: VERMEER TERRRAIN LEVELER FOR GYPSUM MINING

Small Scale Mining

Majority of the mine owners are of small scale and rely upon the manual drilling and blasting

techniques, and labor intensive tractor trolley loading. The startups normally use hand

operated drills.



FIGURE 23: PRIMITIVE HAND DRILLING FOR EXPLOSIVES

A comparatively advanced mine uses pneumatic hand held drill machine with second hand

air compressors backup.

FIGURE 24: DRILLING FOR EXPLOSIVES- PNEUMATIC DRILLS



FIGURE 25: MANUAL LOADING AT MINES

Medium Scale Mining

These units utilize heavy earth moving machinery for excavation, jack hammering, and then

loading on trucks.

FIGURE 26: GYPSUM EXTRACTION AT MECHANIZED MINE OF KOHAT DIVISION



FIGURE 27: GYPSUM LOADING AT MECHANIZED MINE- KOHAT DIVISION

5.1.3. Human Resource

In the developed countries the state of the art public and private sector technical training

institutes providing training in scientific mining practices, drilling, machinery operations,

quarry management and etc. In comparison to this, the gypsum cluster of Kohat has no such

institution and only on job training is provided.

In contrast to the developed countries labor force throughout the value chain is either totally

illiterate or with education below middle school. There is no concept of hiring technically

qualified worker with some sort of diploma or technical education. Mining engineers are

though hired due to the regulations of Mines and Minerals Department but very few of them

remain present on the sites due to lack of facilities and motivation.

5.1.4. Access to Finance

In the countries with well developed mineral development sector provides multiple banking

products are available for financing the mining activities particularly technology. In these

countries mine itself is used as collateral to avail bank finance, secondly there are dedicated

warehouses where the mine product is accepted as collateral for bank loan. Another important

financing facility in these countries is debt financing. Other common financing options

available for mine owner are; assets based finance, royalty based finance and income stream

based finance.

As per the common situation in Pakistan, mine lease is not considered as collateral. The mine

lease holders of Kohat Division are mostly the entrepreneurs of the nearby areas or districts

with a weak financial position. They start mining with smallest capital and borrowing from

friends. Their houses are also located in the villages and very weak assets to be considered

for mortgages.



5.2. Processing

The cluster under review though developing but still far behind the international best

practices in terms of technology. Collectively, the cluster needs upgraded technology with

energy efficient and environment friendly machinery and equipment.

5.2.1. Infrastructure

As most of the minerals are weight losing goods so, throughout the world, it’s a common

practice to establish processing zones in proximity to mining areas. Especially in gypsum

sector the processing units exist nearest to the gypsum mines areas. For example, the gypsum

boards factories of USA are located on the borders of Mexico and Canada.

The concept of developing Industrial Zones/Estates with facilities of processing, polishing,

packaging, machinery manufacturers, machinery repairing workshops near mining hubs is

also becoming a successful model. In the developed countries, and even Iran, primary

crushing is done at mine sites, which not only confines most of the dusty operations to remote

mountainous areas but also ensure increased profit margins.

FIGURE 28: CRUSHING AT GYPSUM MINE OF WHITE MESA, SANDOVAL COUNTY- USA4

In the Kohat Division, the processors while adhering to the global gypsum business principle

and for profit optimization, try to establish the gypsum crush, powder, and plaster units

nearest to the mine sites. However, all of the processing activity has been developed by the

individual decisions of the business owners alongside the highways, and the dedicated

processing zones do not exist.

4 Photo Credit: geoinfo.nmt.edu



5.2.2. Technology

As per the international best practices in countries like Canada, the primary crushed rock at

mine site is sent to the cement factories or gypsum plasters and boards processing industries.

The concept of open air crushing or powder processing is totally discouraged. Latest

processing machinery is used to ensure the productivity and energy efficiency.

The processing of Kohat cluster is dominated by the use of locally manufactured machinery,

which is though of lower cost but lags far behind in terms of productivity, quality, and HSE

(Health, Safety, and Environment) aspects.

Gypsum Powder Units

The gypsum powder units of countries like China, are designed to ensure environment

friendly operations, wastage reduction, and quality products.

FIGURE 29: GYPSUM POWDER INDUSTRY OF CHINA



FIGURE 30: GYPSUM POWDER PLANT BY HENAN LIMING HEAVY INDUSTRY SCIENCE &

TECHNOLOGY CO.

These are simplest units with only one syndicator and conveyor belts where loading and

unloading is done manually. The crushing machinery and conveyor belts used are locally

manufactured. Normally, these machines are placed in open without any shed or boundary

wall resulting in air pollution with around 150 Kg of powder per ton of gypsum crushed.

FIGURE 31: GYPSUM POWDER UNIT AT KRAPA, KOHAT DIVISION

Gypsum Crush Plants



The gypsum crush plants of the entire world operate in the open air crushing of rock.

Therefore, in most of the countries primary crushing is performed in the mining area.

FIGURE 32: GYPSUM CRUSH AND POWDER PLANT AT IRAN

Gypsum crush plants are the medium scale business with an average investment of Rs. 6

Million. These units crush the hand pick and through jaw crusher and then with the help of

conveyor belts and sieves, separate them into different sizes from 1 inch to 5 inch. Like the

gypsum powder units, the crush plants are also installed in open air, therefore having the

same problems of wastage and environmental pollution.

FIGURE 33: GYPSUM CRUSHING IN KARAK, KOHAT DIVISION



FIGURE 34: GYSPUM CRUSH SIFTING

FIGURE 35: LOADING ON CRUSH PLANTS, KOHAT DIVISION

Gypsum Plaster (Plaster of Paris) Plants

The hemihydrate (Plaster of Paris) production plants in the leading countries is done in

energy efficient manner through latest machinery also complying with environmental

regulations. The situation is far better in our neighbouring countries of India and Iran.



FIGURE 36: PLASTER OF PARIS PRODUCTION LINE BY PRECIOUS GROUP- INDIA

In Kohat Division, such units are equipped with syndicators for crushing gypsum lumps into

powder and then this powder is semi automatically conveyed into the furnaces for

calcination. After calcination, the powder is ground into fine mesh and finally packed. Labor

is engaged in five stages as:

1. Crushing the handpick to sizes suitable for grinding in syndicator.

2. Loading the powder into furnaces from syndicator pit.

3. Loading the powder from furnaces into grinding machine.

4. Packing the powder into bags.

5. Loading the bags on trucks.

FIGURE 37: PLASTER OF PARIS PLANTS- KOHAT DIVISION

These units totally rely upon the thermal energy for use in furnaces while only 4 units have

gas connections. Majority of other units use coal, and some also use wood for heating their



furnaces. Furthermore, due to the manual loading in open environment, the wastage is 250

Kg per 30 tons.

5.2.3. Human Resource

In rest of the world, the processing industries abide by the labor laws and in most of the

countries the hourly wage rate for labor is practiced. Social security, and safety of the

processing labor is the responsibility of employers which is practiced in the advanced

economies but in countries like Pakistan, employers least bother about such things.

The situation of Gypsum cluster of Kohat is organizations is unfavorable for both of the

employees and the employer. In almost all of the gypsum processing units, the contractor is

responsible for managing labor on the basis of rupees charged per bag. This is though an

attraction for the business owners but the implementation of labor laws are nonexistent in the

cluster and long term affiliation of the employees is also a problem due to this factor.

5.2.4. Access to Finance

The processing units of the top gypsum producing countries are normally located in costly

processing zones, therefore prove to be strong collaterals for financing from formal channels.

In contrast to this, the mineral processing industry of Kohat cluster is established on inherited

lands with lowest rates, which remain to be of lowest worth to be considered by banks for

financing.

6. KEY ISSUES

6.1. Regulatory

Mining

1. Illegal mining in shape of subletting and forced occupation based mining by local

communities result in massive under reporting of the production. Not only loss to the

investors but also to the government exchequer.

2. Taxation

a. In 2015 the royalty was at once increased from Rs. 10 to 30 per ton

b. All minerals are treated alike while levying taxes or royalty

3. Increase in Renewal Fee

a. Earlier as per the Mineral Concession Rules, Rs. 13,000/ but after 2017 it is

Rs. 100,000/

4. Heavy fines are charged. A that are above Rs. 50,000/ making it unviable

5. Lease:

a. The Mining Policy/Act: Work on 200 acres and surrender the remaining area.

b. Lease renewal is delayed by department and then cancelled on account of non-

renewal



6. Explosive License:

a. Takes several months in issuing

b. Daily limit of explosives reduced from 25 Kg to 5 Kg

7. Inter departmental conflict between the DGMM and Forest Departement over land

8. Cluster complains of being neglected in the formulation of Mining Act.

9. Many death cases pending at the Workers Welfare Board Peshawar

10. The clause of surface rent in the Minerals Act termed to be ambiguous. There is no

mention of the rate or the clarity about the disputes between the property owner and

lease owner.

11. Noncompliance of labor laws relevant to marriage and death grants of up to 300,000/

Processing

1. Procedures for registration with industries department are not clear

2. NOC from EPA is time consuming

3. Security Deposit for Gas connections is Rs. 6 Million due to which the plaster

factories either opt for coal fired heat source or gas theft as high as Rs. 1.3 Billion

per year.

4. Gypsum uncalcined powder factories highly dependent upon the uncertain export

orders to India, therefore making the businesses to be confined to the roadside open

area single syndicator based operations.

5. Open area crush plants due to being located near the residential areas face threats of

closer on account of environment pollution.

6.2. Infrastructure

Mining

1. Poor condition of mine access roads cause mine access blockade in rainy weather and

unwillingness of the transport even in normal weather when they have supplies other

than gypsum

2. Unavailability of electricity and water makes the operations of crush plants nonviable

in the mining areas.

Processing

1. Electric Power unavailability

2. Unavailability of Gas connections: Only 8 factories out of 130 have gas meters

3. Gypsum powder processing units away from mines are less profitable



6.3. Technology

Mining

1. Rental based Heavy Earth Moving Machinery results in lower profit margins for mine

owners.

Processing

1. Inefficient locally manufactured small scale plaster plants result in low productivity

and low profitability

6.4. Financing

Mining

1. Unavailability of Loan for Lease Holders

Processing

1. Weak Financial condition of processors

6.5. Marketing

Mining

1. Reliance upon conventional markets of cement factories and exports to India limits

the prospects and cause lower prices stagnating for a long period.

Processing

1. Gypsum crush: Heavily dependent upon the domestic cement factories with very low

prices. Similary in case of exports the only market is that of India. The transporters

are given very short time to return whereas they have to queu up for long time at

customer sites.

2. Low prices of plaster products in domestic construction industry.

6.6. Social

Mining

1. Hinderances caused in mining activities by local communities.

2. Unavailability of facilities for mine workers, namely, school, colony, hospital, and

transport.



3. Over staffing in Working Folks Grammar Schools has resulted in burden on workers

welfare funds.

4. The admission of children of non workers in the workers schools.

5. Admission procedure of the workers children is complicated. The EOBI office exist

only in Kohat and there is no office of Worker Welfare Board



7. PROPOSED INTERVENTIONS

7.1. Regulatory

7.1.1. Ammendments in Mineral Policy

Despite huge mining and processing activity, the contribution of gypsum cluster of Kohat to

the provincial and federal revenues is negligibly small. Similarly, the cluster has sever social

and environmental issues.

Required Interventions

There is a need to bring the cluster in provincial streamline with the following:

➢ Issue of illegal mining to be solved by mutual dialogue of the concerned public and

private sector.

▪ For ptimum mining activity, the mine leases to be allotted after ensuring the

financial soundness, experience, expertise, and business plan of the applicant.

▪ To eliminate the occupation of mines by local communities, there should be a

provision of allowing a certain portion of mine leases to be legally subletted.

➢ Existing mine owners are resisting the implementation of the mineral act’s clause

related to the surrendering of land over 200 acres.

▪ The existing mine owners should be exempted from the surrender of land in

access to 200 acres, as they plead to have acquired the lease before the law. In

return, these mine owners may be asked to guarantee time bound mining

activity and come up with a plan of optimum land utilization within justified

time period.

▪ The clause of land not exceeding 200 acres to be applicable to new applicants.

➢ Rationalize the royalty on the basis of the worth of the mineral.

▪ For gypsum it should not increase Rs. 15 per ton.

▪ The increase in royalty to be slow and gradual.

➢ Decide slabs for charging penalties as per the nature and intensity of violation, in

consultation with mine owners.

➢ On the basic principles of economics and role model of the developed countries,

mining to be declared as primary industry, so that ensure

▪ Provision of basic infrastructure to the primary crushing within the mining

area

▪ Bring the mining and initial crushing units into tax net

▪ Paving way for compliance with social and environmental regulations

➢ Allocating the budgets on the basis of royalty for

▪ Infrastructure development

▪ Interest free loans to the mine owners and crush units for upgradation

➢ Efficient implementation of labor laws for

▪ Workman compensation

➢ Efficient and empowered committees backed by dedicated mineral majestrate for

▪ Mines dispute resolutions



Responsibility

The Mines and Minerals Development Department of Khyber Pakhtunkhwa in consultation

with:

❖ Forestery, Environment, and Wildlife Department

❖ PMDC

❖ SMEDA-Khyber Pakhunkhwa

❖ Labor Department

Required Budget for Intervention

This particular intervention requires about PKR 01 million for travelling of officials,

stakeholders consultations, communication, and printing.

Benefits of the Intervention

The intervention is aimed to ensure:

➢ Legal mining

➢ Increased number of modern mines

➢ Reduce envrironmental hazards

➢ Social uplift and mainstreaming of the local communities

7.1.2. Ammendments in Industrial Policy


➢ Reduction or waiver of Security Deposit for Gas connections

➢ Registration process with industries department to be transparent and quick

➢ Easy and quick process for obtaining NOC from EPA

Responsibilty

Industries department in consultation with:

❖ Gypsum processors

❖ SMEDA-Khyber Pakhunkhwa

❖ Labor Department-Khyber Pakhunkhwa







The intervention is aimed to ensure:

➢ Increased investment in the processing sector

➢ Formally registerd processing industry

➢ Compliance with the environmental regulations

➢ Labor laws and social welfare compliance

7.2. Infrastructure

7.2.1. Mines Access Roads for Mine


➢ 80 Km Mine Access Roads Development

▪ 40 Kms alongside old Bannu Road

▪ 20 Kms alongside Main Indus Highway

▪ 20 Kms alongside Rawalpindi Kohat Road

Responsibilty

Mines and Minerals Development Department of Khyber Pakhtunkhwa


Total budget of PKR 1,600 will be required for the purpose



7.2.2. Establishment of Gypsum Processing Zone


➢ Establishment of Gypsum Processing Zone on Old Bannu Road over 200 acres with

one window facilitation service

Responsibilty

Industries Department of Khyber Pakhtunkhwa


Total budget of PKR 2.9 Billion will be required for the purpose, as:

TABLE 28: DETAIL OF GYSPUM PROCESSING ZONE

S. No. Task Cost (Million Rs.)

01 Acquisition of Land- 200 Acres @ Rs. 04 million/acre 800

02 Development- 30% Service Area (60 acres) @ Rs. 01 million/acre 60

03 Electricity Provision- 28 Mw 400

04 Gas Provision 840

05 Water Supply and Severage 300

06 Bounday Wall 350

07 Office Building 20

08 Labor Complex (500 Persons Accomodation)- 38,000 Sq. Ft 76

09 Masjid and Dispensary 20

09 Running Expenses 20

Total 2,886



7.3. Technology

7.3.1. Machinery Pools for Mining


With ever increasing difficulties in obtaining the explosives for mining, the miners of the

clusters are gradually switching to the heavy earth moving machinery but currently they are

facing difficulties these from Tharnol and the Karak market.

Two (02) machinery pools are required as

▪ 01 for Karak

▪ 01 for Kohat

Responsibilty



Total budget of PKR 1,530 will be required for the purpose as under:

TABLE 29: DETAIL OF MACHINERY POOL

S. No. Required Interventions Estimated Cost

(Million Rs.)

01

10 number of shovel/loaders (950)- @ Rs.

15 Million/Unit for Karak

10 number of shovel/loaders (950)- @ Rs.

15 Million/Unit for Kohat

300

02 15 number of air compressors (250 PSI)- @

Rs. 06 Million/Unit- Karak

15 number of air compressors (250 PSI)- @

Rs. 06 Million/Unit- Kohat

180

03 15 number of excavators with buckets and

jack hammers- @ Rs. 35 Million/Unit-

Karak

15 number of excavators with buckets and

jack hammers- @ Rs. 35 Million/Unit-

Kohat

1,050

Total 1,530



7.3.2. Establishment of Gypsum Processing Factory on International

Standards


The proposed project will have a total investment of PKR 1.4 to 1.6 Billion. It will also be

backed with complete on-site gypsum processing plant capable of utilizing its gypsum rock

into:

➢ Gypsum Plaster of Paris of High Quality: 94,000 Tons per Year

➢ Gypsum Boards: 06 Million Square Meters per Year

(Please find attached the detailed quotations for reference)

Responsibilty

Private sector to be encouraged to invest in this project once the gypsum processing zone is

commenced.

Cost of the Intervention

TABLE 30: DETAIL OF GYPSUM PROCESSING FACTORY

S. No Cost Heads Total Cost (Million PKR)

1 Land (05 Acres) 20

2 Infrastructure (Factory, Labor Hostels, others) 580

3 Machinery & Equipment (Processing) 600

4 Preliminary Expenses & Project Management 70

Total Project Cost 1,270

Benefits of the Project

The project will provide employment to about 200 people by ensuring value addition and

revenue generation.

TABLE 31: REVENUE STREAM OF THE PROJECT

S. No Revenue Heads Estimated Revenues

(Billion PKR)

1 Gypsum Boards 8.00

2 Gypsum Tiles 0.05

3 Gypsum Plaster 0.05

4 Gypsum Powder 0.01

Total 8.11



7.4. Financing

7.4.1. Financial Support to Mining Sub Sector


The gypsum mines like other minerals are not considered by banks as collatorals. Even if it is

considered the mine owners will not apply for conventional bank loans due to religious point

of view involved with the interest factor. This is cross cutting with the issue of the forceful

takeover of mines by locals.

In order to assure the local investment in legal mining, the interest free loans out of the

royalty may be initiated.

Responsibilty



TABLE 32: DETAIL OF INTERVENTION

Benefits of the Project

The project will help in upgradation of 70 mines by the year 2025

Required Interventions Estimated Cost

(Million PKR )

Creation of funds for loans from the collected Royalty to

support 70 Mines @ Rs. 10 Million per Mine. (out of Rs. 20

Million per Mine)

700



7.4.2. Upgradation Support to Processing Sub Sector


The use of substandard local kilns for plaster of Paris manufacturing results in low

productivity, quality issues, energy wastage, and environment pollution. Encouragement of

the plaster of Paris processors is needed by providing matching grants or interest free loans to

them.

Responsibilty



TABLE 33: DETAIL OF INTERVENTION


Adoption of modern kilns will help the procssors operate cost effectively and efficiently to

produce quality products for better markets and prices.

7.5. Formulation of Marketing Strategy


The public and private sector should sit together to formulate policy of promoting the right

product for right market. The export marketing of raw gypsum to be totally banned and the

value added products to be supported by marketing support.

Responsibilty

➢ Frontier Mine Owners Association

➢ Industries Department Khyber Pakhtunkhwa

➢ Mines and Minerals Development Department of Khyber Pakhtunkhwa

➢ SMEDA

➢ TDAP

Required Interventions Estimated Cost

(Million PKR )

100 Large scale plaster producing automated plants. Rs. 100

Million per plant (Out of Rs. 20 Million per plant)

10,000

From Royalty of the minerals to support 50 local mine owners for

establishment of crush plants in mining Area: Rs. 05 Million per

plant (Out of Rs. 01 Million per plant)

250

Total 10,250







Increased profitability of the cluster and revenues for the provincial and federal governments

7.6. Social


➢ Establishment of Hospitals for Mine workers

➢ Workers Welfare Fund

➢ Labor colonies to established at Karak, Krapa, Speena, and Kohat (cost mentioned in

the gypsum

➢ Houses in worker colonies should be evacuated from influential people and allotted to

workers only

➢ Establishment of EOBI and Worker Welfare Board offices on district level

➢ For the admission of worker’s children to Working Folks School, the verification of

candidates file should be the responsibility of the school

Responsibilty

➢ Mines and Minerals Development Department, Government of Khyber Pakhtukhwa


Already covered in the Gypsum Processing Zone’s Costing


Social uplift of the workers families



8. Economical, Social, and Environmental Impacts

8.1. Economic Impacts

The support of government and progressive role of private sector will increase the overall

productivity and profitability of the Gypsum cluster of Kohat Division by following means:

✓ Increased production from existing mines

✓ Increased number of mines

✓ Increased revenue, decreased operating costs, and hence higher profits for the existing

as well as new mines

✓ Establishment of crushing units at mine sites will reduce the transportation cost for

them, and hence better profit margins.

✓ Modern energy efficient powder and plaster processing units to reduce the energy

costs for SMEs, and through better quality enable them to get access to markets with

higher price offer. Overall increased profitability for these units.

✓ Establishment of three in one, Gypsum powder, plaster, and Boards processing units

in the processing zone for greater profits.

✓ Strengthening and expansion in aligned and service industry including hotels and

restaurants, grocery stores, commercial plazas, housing schemes, service stations,

CNG stations, and petrol pumps.

8.1.1. Individual Impact on SMEs

A conventional labor intensive gypsum quarry of Kohat Division, earns an average revenue

of Rs. 3.1 Million per year. The operating profit margin remains around 44% with a profit of

Rs. 1.3 Million per annum only.

Use of modern machinery enables the Gypsum quarry to increase its annual production by a

minimum of 14 times, that is, 111,600 Tons of additional gypsum per year. With average

price of Rs. 370/ton at mine the additional annual revenues of mine are Rs. 41.3 Million

whereas the total saving from mining and loading activities are Rs. 18.5 Million. The net

effect of the increase in quantity and decrease in operating cost enables a quarry to earn

additional Rs. 59.8 Million per year. In total, the annual production of 120,000 Tons gypsum

fetches Rs. 44 Million and Operating Profit of Rs. 38 Million (that is 95.5% of revenues).



TABLE 34: ECONOMIC IMPACT-UPGRADATION OF A SINGLE QUARRY

* 120,000 tons is considered on the basis of the gypsum production at mine

TABLE 35: ECONOMIC IMPACT- MECHANIZATION OF STOCKING YARD

Establishment of gypsum crush plants in mining area will reduce about 20% of the

operational costs for each plant.

Similarly, the conventional gas operated plaster plants with 02 kilns normally have installed

production capacity of 50,000 Tons per year and those of wood or coal operated plants is

20,000 Tons per year. With introduction of modern technology, not only the production will

increase but the energy cost will also reduce.

Finally, the gypsum boards factory with about 5 Million square meter and 50,000 Tons of

Plaster, normally earns a revenue of over Rs. 4 Billion per year. While being established

within 50 Kms of the mining areas, the transportation costs for a gypsum production plant

can be reduced by 40 to 50%, and as already explained, for gypsum products, this will be a

huge saving.

Existing Situation (Single Mine) Modern Machinery (Single Mine)

Labor Intensive Mining Mining with Excavator-EX 200

Production: 04 Labor mine 28 Tons/Day Production: 400 Tons/Day

Working Days/Year = 300 Working Days/Year = 300

Annual Production/ Year = 8,400 Tons Annual Production/ Year = 120,000 Tons

Cost of Mining: Rs. 172/Ton Cost of Mining: Rs. 29.5/Ton

Labor Intensive Loading at Mine Loading with Excavator-EX 100 at Mine

Loading: 04 Labor mine 28 Tons/Day Loading: 448 Tons/Day


Annual Loading/ Year = 8,400 Tons Annual Loading/ Year = 134,400 Tons

Cost of Loading: Rs. 36/Ton Cost of Loading: Rs. 24/Ton

Post Intervention Benefits- Quarrying

Increased Annual Production: Additional 111,600 Tons

Per Ton Cost Saving: Rs. 142.5/Ton means Rs. 17.1 Million saving for 120,000 Tons

Post Intervention Benefits- Mine Site Loading

Increased Annual Loading: Additional 126,000 Tons

Per Ton Cost Saving: Rs. 12/Ton, means Rs. 1.6 Million Savings for 120,000 Tons*

Existing Situation (Single Stocking Yard) Modern Machinery (Single Stocking Yard)

Labor Intensive Loading at Yard Loader B 950 at Yard

Production: 8 Tons/Day Production: 176 Tons/Day


Annual Loading/ Year = 2,400 Tons Annual Loading/ Year = 52,800 Tons

Cost: Rs. 79/Ton Cost: Rs. 13.5/Ton

Post Intervention Benefits of B 950

Increased Annual Production: 50,400 Tons

Per Ton Cost Saving: Rs. 65/Ton and Rs. 3.3 Million per Year



8.1.2. Impact on overall Cluster

Combined total impact of the interventions will be in the shape of increased number of

SMEs, direct employments, development of businesses other than the gypsum sector, and

environment friendly projects.

8.2. Environmental Impacts

The negative environmental impacts of the cluster would be reduced through the following

interventions:

➢ Restriction of mining and processing activities to certain areas

➢ Confinement of processing activities inside the buildings will help in controlling the

air pollution.

➢ Green products as per the international standards and trends

➢ Reduced contamination of water

➢ Trend of using products to safeguard against climate changes

8.3. Social Impacts

➢ Direct employment to about 5,190 people:

➢ Better socio economic conditions of local people, and the labor

➢ Social uplift due to increased skill oriented jobs

➢ Bringing the local communities into mainstream of industrialization

➢ Improved safety and hygiene of the mining and industrial employees and local

communities

➢ Increased job opportunities



8.4. Key Economic Indicators Analysis

8.4.1. Contribution to GDP

Current contribution of the Kohat Division’s Gypsum cluster is PKR 2.31 Billion per year.

After the proposed interventions this contribution is estimated to the PKR 14.48 Billion per

year.

8.4.2. Economic Rate of Return on Investment

With the total cost of intervention to be PKR 17.99 Billion the net economic rate benefit will

be PKR 42.5 billion.

8.4.3. IERR, Payback Period, and Net Present Value

➢ IERR: 24%

➢ Net cost benefit ratio: 0.82

➢ PV of economic benefits: 112.8



9. Additional Inforamtion

ANNEXURE-I: Record Note of Gypsum Kohat Cluster FGD

FGD: Cluster Development Based Mineral Transformation Plan – V2025”

Venue: Shaban Hotel, Karak Dated: August 07, 2018

Agenda: To discuss about the issues faced by the Gypsum Kohat cluster, and required

interventions

The Vision 2025 aims to improve Pakistan’s competitiveness in commodity producing

sectors through cluster based development through building collaborations among private

firms, the government, and academic & research institutions. In line with the vision 2025,

Planning Commission, Ministry of Planning, Development & Reform have engaged Small

and Medium Enterprises Development Authority (SMEDA) to undertake a comprehensive

Research/Feasibility Study on Cluster Based Mineral Sector Transformation Plan. This

comprehensive study is aimed to assess complete value chain study of selected mineral across

20 potential clusters in three sub sectors; mining, processing & tradingfor further

development of mineral sector to international standards.

After preliminary meetings, presentation of the inception report, and field surveys, the first

Focus Group Discussion was arranged at Shaban hotel, main Indus highway, district Karak

with the gypsum stakeholders.



Pictures of the Meeting

Discussion

The meeting formally started with recitation from holy Quran and was followed by

introduction session. Mr. Abdul Qayyum (Member PSC) said welcome to all participants and

introduced the purpose of the meeting.













ANNEXURE-II: SMEDA OFFICES’ ADDRESSES

Small & Medium Enterprises Development Authority (SMEDA),

Ministry of Industries & Production, Government of Pakistan

www.smeda.org

Head Office

4th floor, 3rd Building, Aiwan-e-Iqbal Complex, Edgerton Road Lahore

Tel: (042) 111-111-456 Fax: (042) 36304926-27 Help Desk: [email protected]

REGIONAL OFFICES

Baluchistan:

Bungalow No 15-A, Chaman Housing Scheme Airport Road Quetta

Tel: 081-2831623-2831702, Fax: 081-2831922

Khyber Pakhtunkhwa:

Ground floor, State life building The Mall Peshawar

Tel :091-111-111-456, 091-9213046-7 Fax 091-5286908

Punjab:

3rd floor, 3rd building, Aiwan-e-Iqbal Complex Edgerton Road Lahore

Tel: 042-111-111-456, Fax: 042-36304926, 36304927

Sindh:

5th floor, Bahria Complex II, M.T. Khan Road Karachi

Tel: 021-111-111-456, Fax 021-35610572.

http://www.smeda.org/

mailto:[email protected]



REGIONAL BUSINESS CENTERS

KHYBER PAKHTUNKHWA

Abbottabad

Contact Person: Mr. Jabbar Ali

Address: Office # 6 Al-Haaj Ashraf Plaza Mansehra Road Supply Abbottabad.

Tel: 0992-400190, 0342-9533694

Email: [email protected]

Dera Ismail Khan

Contact Person: Mr. Asim Rashid

Address: 1st Floor State Life Building East Circular Road Dera Ismail Khan

Tel : ( 0966)-716266, 0301-5862266


PUNJAB

Lahore

Contact Person: Mr. Muhammad Ijlal

Address: Lahore Chamber of Commerce & Industry – 11 Shahrah-e-Aiwan-e-Tijarat

Lahore.

Tel : ( 042)-111 222 499 (Ext. 348) , (042)-36282842

Fax : ( 042)-36368854, Email: [email protected]

Faisalabad

Address: Faisalabad Chamber of Commerce & Industry – FCCI Canal Park, East Canal

Road Faisalabad.

Gujrat

Contact Person: Ch. Rukhsar Ahmad

Address: Gujrat Chamber of Commerce & Industry GTCCI Building Near National

Furnishers G.T.Road ,Gujrat

Tel : ( 053)-3706116, Fax :( 053)-3706112, Email: [email protected]







Gujranwala

Contact Person: Mr. Asim Malik

Address: Gujranwala Business Centre Trust Plaza G.T. Road, Gujranwala

Tel : ( 055)-3734600, 0332-8331998


Sialkot

Contact Person: Mr. Ubaid ur Rehman

Address: Sialkot Chamber of Commerce & Industry – SCCI Shahrah-e-Aiwan-e-Sanat-

o-Tijarat Sialkot

Tel : ( 052)-4261881-2, 0333-8364399


Rawalpindi

Contact Person: Mr. Asghar Nasir

Address: Rawalpindi Chamber of Commerce & Industry Chamber House-39 ,Civil

Lines, Mayo Road, Rawalpindi

Tel : ( 051)-9273019, 9273020, 0345-8322898

Fax : ( 051) – 5111055, Email: [email protected]

Multan

Contact Person: Ms. Sana Niaz Burrana Multan

Address: C/o Office of DO (E-IP) Near Circuit House District Jail Road,Multan

Tel:(061)9239300,0300-702601

Fax :( 061)-9201176, Email: [email protected]

Rahim Yar Khan

Address: TBA, Rahim Yar Khan Chamber of Commerce Building Near Coca Cola

Factory

Shahbaz Pur Road Rahim Yar Khan

Sargodha

Contact Person: Mr. Muhammad Ali Rana

Address: House no. 2 Main PAF Road Sargodha



tel:(061)9239300,0300-702601




Tel: 048-9230834, 0320-8588950


SINDH

Dadu

Contact Person: Mr. Hafeez Ahmad Jotoi

Address: House No. 996 VIP Road Near Liaquat Jatoi House Dadu

Tel: (025) - 4711633, 0333-7063633


Gotki

Contact Person: Mr. Raza Muhammad Mehar

Address: DDO Revenue Building Station Road,Ghotki

Tel: (072) - 3680233, 0300-2572655


BALOCHISTAN

Hub

Address: SMEDA RBC, LIEDA Office Building, HITE Hub, Lasbela

Tel: 0853-310142, Fax: 0853-302827, Email: [email protected]

Gawadar

Address: SMEDA RBC, Room #:201, GDA Building, Governor House Road, Gawada

Tel: (0864)-211312, Email: [email protected]

Loralai

Address: Office#12 Qadri Complex, Civil Hospital Road, Loralai

Tel: 0332-4501711, Email:[email protected]

********************************









ANNEXURE-III: Quotations for Plaster of Paris Plants



ANNEXURE-IV: Quotations for Gypsum Boards Unit

Documents

DISTRICT KOHAT, KHYBER PAKHTUNKHWA