Natural resources of Pakistan

[New Resolve]

sure looks difficult, not impossible.

get some geologists, mining engineers, buy the equipment and start small.

 

[Faiez]

mate i know all this but do you even have any clue how much $2 trillion are?? like i mean seriously? this guy has stated that it would take $2 trillion to dig out $1 trillion worth of minerals? is that even logical?

Yes it is possible that to extract what is currently worth $1 trillion at current prices would cost in total more than that.

Let me give you a very real example, where they are spending more money on extracting the thing than it is worth on the market. US shale oil industry. Search on the internet you'll find out about it. Prices are ~$50/barrel and their cost of production is maybe ~$60 in some cases. What that means is that if the entire oil reserve is worth say ~$1 billion on a rig using current prices, it may cost $1.4 billion to extract all of that oil. But they're not stopping because they think the oil prices are going to bounce back in a couple of years.

So if the same thing happens in iron ore etc, you simply don't dig, because digging the thing out of there is more costly than the thing itself.

Let me explain even more. Imagine this. There's an ore reserve 200m below the surface. The ore as it is, is worth $60/ton on the open market. Now can you dig out a ton of that for significantly less than $60? If not, then the project is obviously not feasible and perhaps $ 1 trillion worth of ore may cost $ 2 trillion to dig out.

 

[PakPrinciples]

Just now I was going through the list of top 10 Natural Resource rich nations -- Pakistan was nowhere to be seen.

What reference material have the lists you're referring to consulted to come to their assessment? Furthermore are they going by total resources or just reserves?

A lot of those lists are basing their assessments on how the USGS in general defines and differentiates between resources and reserves. Basically the USGS states that a resource is defined as:

A concentration of naturally occurring solid, liquid,or gaseous materials in or on the Earth's crust in such form that economic extraction of a commodity is regarded as feasible, either currently or at some future time. ​

while a reserve is defined as:

That portion of an identified resource from which a usable mineral or energy commodity can be economically and legally extracted at the time of determination. ​

USGS Bulletin 1450: Coal Resource Classification System
http://www.nwrc.usgs.gov/techrpt/sta13.pdf

BP, to give another example, states in it's methodology for coal assessments that:

Total proved reserves of coal are generally taken to be those quantities that geological and engineering information indicates with reasonable certainly can be recovered in the future from known deposits under existing economic and operating conditions. ​

If there is no infrastructure that can support the mining operations present nor is there any belief on the part of the USGS or BP that such conditions would exist anytime in the near future particularly considering there are no specific dates cited by the government or mining companies (with the necessary equipment ) for when mining is going to take place then the USGS or BP isn't going to term what we have as either a resource or a reserve hence why you don't see Pakistan listed.

However, Pakistan is resource rich (our resources are not just economically recoverable but also a lucrative business) and you can get the full details by reading the “Pakistan Mineral & Mining Sector Investment and Business Guide” which goes into exactly what the country knows about mineral deposits, marble/granite deposits, etc... in the country. I've read some of the 2007 report and I believe there is a newer version from 2009 but I do not have an actual copy that I can link to you

There was also a small presentation that talks about the major iron ore (which we can convert to steel), gold, copper and lignite deposits which you can access via the link below:
http://siteresources.worldbank.org/...in-Events/Mineral-Sector/Presentation1.13.pdf

There is a lot more iron ore and other minerals (ex. limestone, gypsum, etc... which we use and can use to create other value added products like cement) in other parts of the country which are economically recoverable with current technology and which that brief presentation doesn't touch on which you can get access to if you can find a copy of the latest “Pakistan Mineral & Mining Sector Investment and Business Guide” or even one of the past copies (if you're in Pakistan try the library of a major university with a geological sciences department).

One guy posted a great road map of how we could even profitably mine and refine our lower grade iron ores deposits (which we also have plenty of) with existing Japanese technology to profitably produce steel:
Development Roadmap for Punjab Iron Ore and Opportunities in Steel Ma…

That report though doesn't appear to touch on oil, gas (both unconventional and conventional) or shale oil deposits in the country for which I'll just forward you to a Riaz Haq blog post:
Haq's Musings: Pakistan's Vast Shale Gas Deposits

Once Pakistan starts investing in the mining industry and in lignite production you're very likely going to see those lists revised and Pakistan would start appearing on them.

There's more I can say on this but let's leave it here because I honestly don't think anyone actually reads my entire posts anyways.

we neither have the money or expertise while we killed a well known private investor which will sue any body who tries to extract it

We have the expertise and can always have the ability to hire foreign engineering companies (ex. Aecom) to provide consultation work to assist with our mining projects.

The money is there the problem is that the government doesn't collect the necessary tax revenues to invest in these projects.

Like @RAMPAGE and @Fracker said the government should be the ones collecting tax revenues to invest in these projects not having foreign governments and mining companies do it for us particularly considering they usually take large chunks of the profit and in some cases (ex. Gold and copper) have no intention of refining the extracted gold/copper within Pakistan instead, like Tethyan wanted, seek to ship the slurry to other countries and refine it there from which they'd sell the more valuable refined gold/copper to their local industries or foreign clientele to convert into value added products (ex. jewelry, copper wire, electronics, etc...) that earn them even more foreign exchange while Pakistan and our people are left with nothing.

In fact multinational mining companies in Colombia have been doing what Tethyan wanted to do in Pakistan for years. They rob the country of its minerals, pay government officials bribes to look the other way (just like what happened in Pakistan) and the country suffers while gaining nothing from its mineral deposits.

As per acclaimed developmental economist Ha Joon Chang (my favourite developmental economist and if you have the time you should read his books "Kicking Away the Ladder: Development Strategy in Historical Perspective" and "Bad Samaritans") the hallmark of a poor country that's destined to stay poor and one that hampers its own development is that they export their own raw resources.

No foreign company should ever be permitted to mine Pakistan's minerals or ferry them out of the country. We need to mine these deposits ourselves, refine them ourselves and turn them into value added products to earn and save the absolute maximum foreign exchange possible as well as gaining the expertise we need to not just exploit other mineral deposits within the country but beyond.

I've personally had discussions with regards to Thar Coal with some coal importers, most's responses weren't very encouraging to put it briefly. Their responses had something to do with low quality of coal.

Who did you talk to? Did you check their qualifications (ex. are they a graduates of an accredited Geological Sciences program)?

What did they reference to you to prove their point of view particularly if they aren't graduates of a geological sciences program?

A lot of these people have their own agenda. To give you an example in the US when the federal government was officially seeking to end child labour (which is thanks to the US' workers unions which pushed the issue like they did for minimum wage laws starting back in the late 1800s) "experts" from the business community were raising a stink about how it would destroy the economy but the reality is they didn't want to have to pay more to adult workers and lose profits just like coal and oil importers don't want a Pakistan that doesn't need to import coal and oil just like politicians that get kickbacks or have business/personal interests linked to the coal/oil importation industry.

The USGS' own report from 1992 states that they estimated there was about 73 billions tons of lignite in place in Thar. Eventually that initial 73 billion ton assessment was bumped up to the 175.5 billion tons as the Geological Survey of Pakistan drilled more holes and got a better understanding of how much lignite is actually there. If you read the initial report the deepest our lignite runs is about no more than 250 meters
http://pubs.usgs.gov/of/1994/0167/report.pdf

This is because lignite is peat that wasn't buried deep enough underground for long enough to be subjected to the same heat and pressure that peat which becomes sub-bituminous, bituminous or anthracite was:

This means all of our lignite is economically recoverable via open pit mining (we technically don't need to resort to more expensive methods like UCG) and Germany has been extracting lignite that deep economically for decades (ex. Inden Mine and even deeper from from the Hambach Coal Mine where they've been extracting lignite 350 meters below the Earths surface) and used it to produce 52.5% of their electricity as of 2002 (45% as of 2013 as per RWE AG's report I cite further down in the post).
Lignite still Germany′s primary energy source | Germany | DW.DE | 04.06.2013
http://siteresources.worldbank.org/...s-in-Events/Mineral-Sector/HarnessingOfCR.pdf

It makes sense considering how cheap electricity from lignite is (cited as being even cheaper than from other coal sources):

To demonstrate the economic viability of this project Pakistan had RWE AG (Germany's largest lignite mining and lignite energy producer who are also the same guys that designed and built those massive bucket wheel excavators like Bagger 293) actually come to Pakistan and do a bankable feasibility assessment for a small part of block I who confirmed through their own drilling that the small area they covered had about 400 million tons of coal in place, that a 1000MW thermal power plant lasting about 30 years would need 180 million tons of coal during its lifetime and based on the 8:1 stripping ratio Pakistan could produce electricity from that lignite at a cost of about 3,300 Rs/MWh (or 3.3 Rs/KWh).
http://siteresources.worldbank.org/...Events/Mineral-Sector/BankableFeasibility.pdf

Compare that to the rates the government was paying IPP's for electricity (ex. 12.5 Rs/KWh) which they generated from expensive imported oil (for which we lose foreign exchange) or that they're looking to pay for ridiculously overpriced solar energy which they then sell back to consumers for at lower rates which are subsidized through tax revenue which resulted in the circular debt that has resulted in the blackouts. Riaz Haq actually covered this in one of his blog posts to which I'll link below and saves me from having to explain any further:
Haq's Musings: Pakistanis Suffer Load-shedding While Power Companies' Profits Surge

There is just so much to talk about in regards to Pakistan's lignite deposits and I've linked two reports that you might be interested in which go into a lot of detail regarding Thar and coal deposits in general across Pakistan:
http://www.sbi.gos.pk/pdf/coal/IM-for-Thar-Blocks-III(A&B),-IV,-VII-&-VIII-(2013).pdf
http://www.nepra.org.pk/Policies/Coal Potential in Pakistan.pdf

Don't have any firsthand knowledge on Balochistan natural reserves. But my point being, who in their right minds wouldn't exploit natural resources, which allegedly, would turn out to be a game-changer for Pakistan?

Exploiting natural resources costs money, a lot of money.

To give you an example the Thethyan Copper Company that wanted to mine Reqo Diq for its gold and copper, which imo was proof of the utter incompetence and corruption of the Pakistani government if you understand the deal they made, planned on a total investment of $3.3 billion in capital expenditures alone.
The Reko Diq Project - Tethyan Copper Company

So where do you propose the Pakistani government get that kind of funding from when it couldn't even pay IPP's for the electricity they produced which lead to the circular debt? The reason you don't see these resources being exploited by Pakistan is simply because the government doesn't collect the necessary tax revenues to invest in these projects and employs failed neo-liberal economic policies. Particularly since the civilian government took over they've been running massive year on year budget deficits just to pay for their respective budgets.

I've discussed this before on other posts about how every economically successful nations development has always been government lead (Germany, China, Japan, S. Korea, the US to name a few) and FDI had little to nothing to do with it.

I can literally guarantee you that Pakistan can grow over 12% year on year and be completely energy independent, assuming an energy elasticity of 1:1, for the next 40 years. The problem is that the government continues to follow this failed neo-liberal economic model that the IMF/WB (owned and operated by the US) push on it.

Please don't feed me the rhetorics of corruption, evil politicians, berooni quwwat and what not. Pakistan, in spite of all the hurdles, turned out to be a nuclear power. Exploiting Natural Resources is a walk in the park when Pakistan's successfully capable of going Nuclear against the will of the likes of The U.S, India.

Yet corruption and incompetence is, from what I have read and observed, the largest contributing factor.

The nuclear program was a security imperative hence the massive focus that was and still is placed on it.

However, as you stated this itself is proof that Pakistan can accomplish anything Allah willing. We've been blessed with all the tools necessary the problem stems from the nations administrators.

 

[coffee_cup]

You ask whether Pakistan is rich in natural resources.

Well of course it is. It has one of the most fertile lands in the world and can feed its population completely by itself.

The biggest and most important resource that Pakistan has and should develop on war footings is the young population. Provide them with top class education (both literal and social behavioral) and there is no stopping this country of becoming one of the top developed nations in the world.

Other things such as gold, coal, oil, gas etc are just but a bonus. Singapur doesn't have these, neither do Japan and South Korea or most of the Western European countries.

 

[!eon]

is it not in the interest of corrupt elite to exploit the natural resource so that they can get their cut?

This way of corruption is to much open, happened in reko diq and then every thing had to rollback.
Local population of Krak for example is not allowing to exploit gas reserves in area.
Best examples are like make caged tracks for ordinary buses to run on and use steel and cement of your own factories. No one can prove faults in your documented purchases and non can understand what happened. Technical thieves !

 

[livingdead]

This way of corruption is to much open, happened in reko diq and then every thing had to rollback.
Local population of Krak for example is not allowing to exploit gas reserves in area.
Best examples are like make caged tracks for ordinary buses to run on and use steel and cement of your own factories. No one can prove faults in your documented purchases and non can understand what happened. Technical thieves !

No I was saying polticians are usually happy to exploit natural resources. In India they sell forests, mines etc to corporates( get massive kickbacks) and sometimes NGOs/people fight against it.
Only reason a politician cant do it is, if nobody is agreeing to exploit, because it does not make enough business sense at this price point. For example, many countries have precious metals, but only china extracts (80 percent market share) because others dont wish to do it.

Sometimes people are not told that truth, vast majority of coal in Indian mines are substandard(high ask content) for example. We import from australia.

 

[RAMPAGE]

@PakPrinciples

Excellent post bro. You have raised some very good points.

 

[Gufi]

Listen for natural resources we possess do look at the portfolios of PPL and POL.
Also you know about Thar's coal and the gold and copper mines in Baluchistan. Gems are another resource we have an abundance of. Rock salts and iron ore also are present in large proven quantitiy.
As to answer your question why we do not use them, we are a country with enough untapped hydel energy to power our entire nation yet we have hours of load shedding.

 

[Goenitz]

Gold reserve of Chinoot, reko dik and potential mines in Wana..

Islamabad has two gas pockets beneath it it.. (accg to syed talat hussain)
(potentially) sircreek and 2 years back( ENI italy) search of oil deposits in Thatta, confirms presence of crude oil (not of sircreek)

 

[Husnainshah]

What reference material have the lists you're referring to consulted to come to their assessment?

Top 10 Countries with Most natural Resources in the World | Most Richest Country with highest Natural reserves - Part 5

Furthermore are they going by total resources or just reserves?

The resources, apparently.

A lot of those lists are basing their assessments on how the USGS in general defines and differentiates between resources and reserves. Basically the USGS states that a resource is defined as:

A concentration of naturally occurring solid, liquid,or gaseous materials in or on the Earth's crust in such form that economic extraction of a commodity is regarded as feasible, either currently or at some future time.
while a reserve is defined as:

That portion of an identified resource from which a usable mineral or energy commodity can be economically and legally extracted at the time of determination.

Well, now that's something I didn't know.

There's more I can say on this but let's leave it here because I honestly don't think anyone actually reads my entire posts anyways.

Oh C'mon, your's the best reply. I wasn't looking for one-liners to begin with.

The money is there the problem is that the government doesn't collect the necessary tax revenues to invest in these projects.

Elaborate further please.

Who did you talk to? Did you check their qualifications (ex. are they a graduates of an accredited Geological Sciences program)?

Coal importers. Both import their coal from Indonesia.
Neither had academic qualification to back their claims.

Yet corruption and incompetence is, from what I have read and observed, the largest contributing factor.

This I'll disagree with you on. Perhaps it's something to do with the lack of infrastructure.
The exploitation just might turn out to be non-feasible after you add the infrastructure to any project.
Though as per some members above, the actual operating cost might as well, in some cases
surpass the worth of the product.

I'm just not ready to buy the argument for corruption or incompetence or lack of will for that matter.
The lack of interest in the exploitation of Natural Reserves must have a technical aspect.
If I were at the helm of affairs, I'd rather wait till I've proper technology, funds and
manpower to extract the resources then to give it away to foreign company.
Perhaps, that's the biggest obstacle.

The nuclear program was a security imperative hence the massive focus that was and still is placed on it.

Economic Security isn't negligible either. George Soros would agree with me on this.
What's that quote associated with Lord Nathan Rothschild;

I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The Man who control Britain's money supply controls the British Empire, and I control the British money supply.

I appreciate the effort you've put in answering my question.
Was one of THE most informative posts.

 

[FaujHistorian]

Ever since I was born, I'm hearing Pakistan 'Qudrati zakhair se maal-a-maal hai'.

Just now I was going through the list of top 10 Natural Resource rich nations -- Pakistan was nowhere to be seen.

I've personally had discussions with regards to Thar Coal with some coal importers, most's responses weren't very encouraging to put it briefly. Their responses had something to do with low quality of coal.

Don't have any firsthand knowledge on Balochistan natural reserves. But my point being, who in their right minds wouldn't exploit natural resources, which allegedly, would turn out to be a game-changer for Pakistan?

Please don't feed me the rhetorics of corruption, evil politicians, berooni quwwat and what not. Pakistan, in spite of all the hurdles, turned out to be a nuclear power. Exploiting Natural Resources is a walk in the park when Pakistan's successfully capable of going Nuclear against the will of the likes of The U.S, India.

Avoid one-liners and please be realistic.

The biggest resource is always one!

hardworking, humble, friendly, people of a country that is a good global citizen.

If you have those, they can bring natural resources from other places (Japan, S Korea).
If you don't have this resource, then no matter how much natural resources you have, the country will be like Nigeria or worse those African countries exporting blood diamonds.

 

[Husnainshah]

blood diamonds.

Well, they'd still at least be a source for good movies.

 

[Zarvan]

Ever since I was born, I'm hearing Pakistan 'Qudrati zakhair se maal-a-maal hai'.

Just now I was going through the list of top 10 Natural Resource rich nations -- Pakistan was nowhere to be seen.

I've personally had discussions with regards to Thar Coal with some coal importers, most's responses weren't very encouraging to put it briefly. Their responses had something to do with low quality of coal.

Don't have any firsthand knowledge on Balochistan natural reserves. But my point being, who in their right minds wouldn't exploit natural resources, which allegedly, would turn out to be a game-changer for Pakistan?

Please don't feed me the rhetorics of corruption, evil politicians, berooni quwwat and what not. Pakistan, in spite of all the hurdles, turned out to be a nuclear power. Exploiting Natural Resources is a walk in the park when Pakistan's successfully capable of going Nuclear against the will of the likes of The U.S, India.

Avoid one-liners and please be realistic.

Because you have most corrupt Baloch Sardars who will never allow it unless half the money goes in their pocket. You are only talking about Baluchistan even Tribal areas have massive Gold reserves.

 

[Lavrentiy]

Comparing nuclear program (any defense-oriented project) with an economic development program is incorrect.

The nuclear capability had to be acquired no matter what cost. There isn't any COST-BENEFIT analysis to be done. It doesn't matter how costly the project is. It has to be done one way or the other.

On the other hand, a copper mine would only be developed if the Benefit exceeds the Cost and there is a Return-on-Investment exceeding the cost of capital for the project.
If the cost of capital (debt + equity) is, for instance, 12%; the return must be more than 12%. The required return would get even higher for a HIGH RISK BUSINESS.

 

[PakPrinciples]

Elaborate further please.

A quick post/summary to illustrate my point:

As per the SBP (State Bank of Pakistan) from FY99 to FY14 respectively we had budget deficits as a % of our total GDP of 6.1 (FY99), 6.6 (FY00), 5.2 (FY01), 5.2 (FY02), 4.4 (FY03), 2.3 (FY04), 3.3 (FY05), 4.3 (FY06), 4.3 (FY07), 7.6 (FY08 and this is when the PPP took over), 5.3 (FY09), 6.3 (FY10), 6.6 (FY11), 8.5 (FY12), 8.2 (FY13) and 5.5 (FY14) which happens to be the latest figure out.

Note how absolute shit the PPP government was. Their whole development model was based on accruing more and more debt while collecting no tax revenue to support their spending spree and investing in god knows what because it certainly wasn't industry. Though I disagree with Musharraf's development model at least he didn't try to spend what the government didn't have and you saw incremental decreases in the budget deficit almost year on year for his entire term.

Now let's assume from FY99 to FY14 successive governments kept the tax to GDP ratio at a constant 18%

If that was the case we would have seen revised deficits of 1.4 (FY99), 1.1 (FY00), a surplus of 0.3 (FY01), then deficits of 0.8 (FY02), 0.1 (FY03), then surpluses of 5.9 (FY04), 4.9 (FY05), 3.8 (FY06), 3.5 (FY07), 0.3 (FY08), 3.3 (FY09), 1.2 (FY10), 2 (FY11), then another deficit of 0.5 (FY12), 0 (technically a balanced budget in FY13) and finally another surplus of 2.4 (FY14)

**I colour coded them to just make it easier to understand. So the reds are deficits and the green's are surpluses assuming we had maintained a constant tax to GDP ratio of 18% with non-tax revenue collected those individual years remaining the same as what was actually collected.

Now if we borrowed the same amount we did those individual years and added in the surplus or subtracted the deficit we'd have had if the tax to GDP ratio remained a constant 18% from FY99 to FY14 we would have had the following as a % of our GDP to specifically invest in our industries:

FY99 = 4.7
FY00 = 5.5
FY01 = 5.5
FY02 = 4.4
FY03 = 4.3
FY04 = 8.2
FY05 = 8.2
FY06 = 8.1
FY07 = 7.8
FY08 = 7.9
FY09 = 8.6
FY10 = 7.5
FY11 = 8.6
FY12 = 8
FY13 = 8.2
FY14 = 7.9

Now as a monetary figure, if we go by WB figures for the size of Pakistan's economy, overall that represents a total collective revenue of more than $170 billion USD (not adjusted for inflation and going by current exchange rates) that we could have invested directly into industry (more considering that those investments would produce goods for export or replacement of imports earning/saving us foreign exchange which can be reinvested into the domestic economy for increased profits).

Now obviously this is based on a best case scenario where investment into the FBR and border security (to prevent smuggling and enforcement of tax laws to ensure the payment of duties/tariffs of goods brought into the country) would yield immediate returns. We would have also have needed to ensure that the import barriers which appear to have been removed back in '99 were reinstated as this also resulted in an increased loss of revenue for the government. Instead the main focus should have been to allow only duty free imports of capital equipment and raw materials for our industries but increasingly invest where possible into import substitution.

There would never have been an energy crisis in fact we could very well be producing all the oil/gas we needed, we would have been mining and refining our own mineral deposits, we would have expanded domestic industries and had more than enough money to invest in domestic security, better funding of Madrassah's so they have the ability to provide their students with a more rounded education so their students can compete to be future leaders and industrial pioneers, etc...

This is why I've said that this tax issue is what's robbing Pakistan of its growth potential. Until it's resolved, which requires more funding for the FBR along with border/port authorities to prevent smuggling and compliance with the nations tax laws, nothing is going to change in fact based on news reports citing the FBR it seems as if the problem is actually getting worse.

A much longer post outlining explaining taxes and the current situation:

A government needs tax collection to pay for basic social services (ex. access to health care, access to education, etc...) and invest into industries (includes electricity generation).

There are direct taxes (ex. personal income tax, property tax, corporate income tax, social security contributions, etc...) and indirect taxes (ex. tariffs, duties, value added taxes, etc...). However, governments also generates revenue from other sources such as government owned industries/businesses, financial aid, etc...

A tax to GDP ratio is a ratio of total tax revenue collected against a countries overall GDP (Gross Domestic Product = total value of goods/services a country produces and though this isn't the best measure of growth and development it's the most commonly used and what most people are aware of so I'll use it).

In FY2013 (financial year 2013 which I believe begins in July '12 and ends June '13 in Pakistan) the SBP confirmed that the government collected approximately $29 Billion USD in revenue (of which $21.45 Billion was in the form of taxes) but the country spent $46.9 Billion USD with an overall budget deficit of 8% of GDP (size of the economy in FY13, as per the SBP, was about $219.3 billion USD in size as per current exchange rates so that's about accurate)
http://www.sbp.org.pk/reports/annual/arFY13/Overview.pdf

That means to cover the budget, so there would be no deficits, the countries tax to GDP ratio needed to have been about 18% of GDP (not about 10.1% as it stands now) with non-tax revenue covering the rest (if the government owned profitable businesses then it doesn't need to rely so much on income tax revenue). Otherwise the country is borrowing money (which needs to be repaid with interest and if you look at previous budgets more than half of them go towards debt servicing), printing money (which results in inflation) or receiving “AID” from countries like the US who use this to force Pakistan into doing things it should not be doing (ex. 18th amendment, NRO, demanding we open our roads to India, etc...).

Now since I'm in Canada I'll use it as an example to compare to. Of all the sources of revenue the government here collects direct taxes generate more than 50% of total government revenue (personal income taxes alone make up almost half of total revenue collected):

Now when you look at Pakistan's budget for 2013-2014 which cites revisions to the 2012-2013 budget estimates you'll see that direct taxes represented only 20% of the governments source of revenue (which is way too small and, I'll have to confirm this, I'm pretty sure that a disproportionate amount comes from VAT's instead of income and corporate taxes).
http://finance.gov.pk/budget/abs_2013_14.pdf

So why is it that low?

Well according to Pakistan's own FBR (Federal Board of Revenue) about 800,000 income tax returns (out of a population of about 180 million) were filed by 16/12/2013 which represents less than 1% of Pakistan's total population and of those filing taxes it's apparent, based on other news reports regarding the countries own politicians, they're not specifying their true assets or income so either don't pay any taxes at all or pay far less than what they're supposed to. This is on top of rampant fraud being reported with regards to corporate income taxes and companies evading paying duties and tariffs (which includes foreign multinationals operating in Pakistan).
Federal Board of Revenue (FBR), Government of Pakistan
Pakistan politicians engulfed by tax evasion storm | World news | The Guardian
Pakistan Customs unearths tax evasion on edible oil imports - thenews.com.pk

In fact a recent article cited in The International News actually notes the FBR as stating that both the number of companies and even individuals filing their income tax returns in tax year 2014 actually dropped compared to the previous year so the problem is obviously getting worse.
Corporate income tax returns filing dropped by 47 percent - thenews.com.pk

What's great is that Pakistan has less income inequality than the US, China and India (demonstrated by our lower Gini coefficient). However, as of 2010 based on WB figures, the top 20% of the population held about 39.5% of the total share of income (in the US the top 20% held 46% of the total share of income and in China they held 47.1% of the total share of income). If that remained true in tax year 2013 then at least 18 million people (36 million in top 20% and assume about 50% should be 18+), not about 800K, should have filed income tax returns and have been paying income taxes. Now you can't dump everything on the wealthier members of society and everyone else does have to contribute their share as well but it's obvious that the wealthiest in the country are simply shirking their responsibility and the government doesn't seem to care.
Income share held by highest 20% | Data | Table

I generally do not like when people try compare Pakistan to developed economies, since we're in a different stage of development then they are, but it's obvious that this is the result of complete negligence on the part of the government. If you look at Pakistan's budget for 2013 (which I posted earlier), to give one year as an example, they were only given a measly 2.743 billion Rs (about $26.7 million USD) which represented about 0.012% of the GDP (if I go by the figures published by the SBP or WB using current exchange rates). How is the FBR supposed to investigate decades of tax fraud, collect revenue, expand the tax net by registering more citizens, etc... when the government doesn't even afford them a budget to do it? Compare this to the US' IRS which got 0.067% of their GDP in 2013 (if I go by WB figures citing current exchange rates).

The PML-N government spent more on its useless Lahore metro projects then it did on the FBR (the same as the PPP which spent more money on its own useless development projects and theirs were probably even worse because the energy crisis began during their term and their budget deficits have, at least for now, been higher than the PML-N's). The $1.6 billion USD deal they signed with China would have given the FBR all the money it needed for Nawaz's first 5 year term and more which I believe would have drastically increased tax collection). To put the money into the metro project is completely inept considering I haven't even heard of a public transit system in the world that doesn't lose money and needs to be heavily subsidized with the exception of Hong Kong's (there are specific reasons for this) and possibly Japans.
$1.6bn Lahore metro train deal signed with China - Newspaper - DAWN.COM

How else can we classify this other than completely incompetent or very likely attributed to corruption? That is a poorly funded and toothless FBR can't go after the 70+% of politicians, including the Shariff and Bhutto families, who aren't paying their share of taxes)

If a country like Kyrgyzstan which is located regionally has a tax to GDP ratio of 24% (as per WB) with a lower per capita GDP it's obvious that Pakistan can as well.

The US itself is stupid because they've been decreasing their own IRS' budget for years now when they need tax revenue more than ever (it appears to have further decreased in 2014 to just $9 billion):

This is why the government doesn't have the money to invest in our own industries and you either find them selling national resources (ex. Reqo Diq) to foreign multinationals or being incapable of exploiting it themselves.

There's a lot more we can discuss on this issue highlighting some of the other developed economies (ex. South Korea) to demonstrate how protectionist policies and self investment is the key to Pakistan's success which is why I am not a fan of Musharraf's development model though it's obvious he was far better at managing the economy than either the PPP and PML-N's whose development schemes are completely wrong in historical context. However for now I'll end it here.

This I'll disagree with you on. Perhaps it's something to do with the lack of infrastructure.
The exploitation just might turn out to be non-feasible after you add the infrastructure to any project.

This ties into the whole taxation issue.

The money is there the issue is that the government simply doesn't collect what it needs to invest in those projects.

As I stated further up in the post if the government kept it's tax to GDP ratio at a constant 18% (Kyrgyzstan has it at 24% as per the WB the last I checked) since FY99 and borrowed what it did we would have had over $170 billion USD to invest directly into these projects from mining our lignite ourselves, mining our gold/copper deposits, finally getting into steel production utilizing only locally sourced iron ore, etc...

My personal view is that successive governments refuse to raise the necessary tax revenues because once they do the middle and upper classes in general who are going to be increasingly paying out of their own pockets are going to get more seriously involved in politics with many more coming out to vote. They will also increasingly demand more from the government and when they fail to deliver, which I know they will, parties like the PML-N, PPP, MQM, ANP, etc... will lose their support base if not have newly registered voters come out against them shifting support to other parties (I suspect support to go to parties like the PTI and JI). These parties simply don't want to upset the status quo and face the threat of losing elections but in the process doom Pakistan.

Economic Security isn't negligible either. George Soros would agree with me on this.
What's that quote associated with Lord Nathan Rothschild;

I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The Man who control Britain's money supply controls the British Empire, and I control the British money supply.

I completely agree and it's why I campaign for a protectionist economic policy and drastically increasing the funding of the FBR as well as border security to enforce tax compliance and raise tax revenue.

Pakistan's issue has been that it was too reliant on trade with the US but now is becoming increasingly reliant on China and needs investment in a host of industries in order to curb imports and become more self sufficient. This is one of the primary reasons why I believe the NRO was signed, NATO transit was allowed and constitutional amendments like the 18th amendment were passed while we've been forced to curb our interests regionally (ex. in Afghanistan) and work to free Kashmir from Indian occupation.

This is also why I believe foreign NGO's who directly or indirectly assist in the spy campaigns of foreign nations being allowed to stay by either the government and/or military leadership.