The reserves were found in Chiniot, around 160 kilometres northwest of Lahore, by Chinese group the Metallurgical Cooperation of China.
A senior provincial administrative official told AFP that initial estimates indicated 500 million tonnes of iron ore, a primary ingredient in steelmaking, had been discovered.
He said the Chinese company has expressed interest in setting up a steel mill on the site, adding that the extracted iron had been tested in Swiss and Canadian laboratories, which found 60-65 per cent of it to be high grade.
The official added that silver, copper and gold samples would also be sent for testing soon.
Speaking at the site on Wednesday, Prime Minister Nawaz Sharif said the discovery could help Pakistan’s stuttering economy turn a corner and end its “begging bowl” culture.
“It is Allah’s blessing that under the lush green fields rich deposits of copper, iron and gold have been found, which will help the country get rid of the ‘begging bowl’ for good,” Nawaz said.
Conflict, instability, corruption and a chronic energy shortage have hampered Pakistan’s economy for years. The IMF granted a $6.6-billion loan to Pakistan in September 2013 on the condition that it carries out extensive economic reforms, particularly in the energy and taxation sectors.