The recent hike in crude oil price and the decision of oil
producing and exporting countries to maintain its prices within a bandwidth
coerce Pakistan to explore alternate but indigenous fuels. Burning natural gas,
as fuel, is an imprudent act — though we have been doing this for decades. On
April 23, Sindh Coal Authority organized a seminar on "Coal as a fuel for
cement and other process industries". The consensus at the end of seminar
was, "Though Pakistan has some of the largest superior quality coal
reserves of the world, the country has not been able to exploit them due to the
GoP policies, absence of modern coal mining facilities and lack of
infrastructure for its transportation".
Introducing the topic and the speakers, Ahmed Hinjra,
Director General Sindh Coal Authority said, "The increasing cost of crude
oil based fuels demands exploring other alternatives and coal being indigenous
appears to be most promising. Pakistan has some of the largest and superior
quality reserves and efforts have to be made to exploit them. Some of the
sectors where coal can be used are power generation, sugar and cement. If coal
is used in these sectors the country will be able to reduce its fuel import
bill."
An interesting presentation was the narration of experience
of Dadabhoy Cement by Qaseem Siddique. He discussed various issues related to
the use of coal in cement industry but was of the opinion that coal is usable in
cement manufacturing. Most of the equipment required for switchover from furnace
oil to coal is available locally but cement units will have to make fresh
investment. Making fresh investment in a industry which is already incurring
losses due to low capacity utilization does not sound prudent, at least for the
time being. He was also of the opinion that if rate of tax is reduced and
capacity utilization is increased units would be able to curtail their losses by
optimizing cost of cement production.
Engineer, Saifullah Khan Paracha presented a very detailed
account of coal reserves and mining and its useability in various industries.
The estimated coal deposits of the country are about 220 billion tonnes. Of this
98 per cent are located in the province of Sindh. As against this present total
annual coal production is estimated around 4.5 million tonnes in Pakistan. He
said that since all over the world coal is used for cement manufacturing and
technology is also available, Pakistan should exploit the indigenous fuel rather
than burning imported furnace oil. There are 23 cement manufacturing units in
Pakistan with an installed capacity of 18 million tonnes per annum. These units
consume, despite low capacity utilization, furnace oil worth Rs 8.36 billion per
annum. The cost per 1000 BTU of coal is 11.70 paisa and the cost of equivalent
furnace oil comes to 26.22 paisa.
Dr. Arshad Ali Baig suggested that since Pakistan needs
additional power generation capacity, efforts should be made to base the future
plants on local coal. Technology for smaller power plants of 25 MW is available
from China. He also suggested use of coal in desalination plants which are also
needed by the country.
A. R. Thaplawala, Executive Director of Lucky Cement
discussed the various concerns, monetary concern being the most important for
the sponsors. For a 2000 tonnes per day plant an investment of Rs 250 million
may be required to enable it to use coal. Another serious concern is the
inadequacy of infrastructure for transportation of nearly 3 million tonnes of
coal to be used. He also discussed the impact of higher percentage of sulphur
and ash contents in coal on cement. In his view, if the government is serious
about promoting use of coal, unless mines are developed and production is
increased industries will not be in a position to opt for switchover.
Shunaid Qureshi, Chairman, Pakistan Sugar Mills Association,
Sindh-Balochistan zone expressed keen interest in using coal by sugar mills. At
present baggasse is as major fuel for boilers and furnace oil is used to meet
the shortfall. In his opinion, if coal is used baggasse can be used for
production of value-added products. Mills, which operate for less than 150 days,
can be operated throughout the year.
Dewan Muhammad Yousuf Farooqui, Minister for Industries and
Mineral Development, Sindh, chaired the concluding session. He said,
"Pakistan needs to conserve its foreign exchange reserves and use of
indigenous coal can help in achieving the objective." Referring to cement
industry he said, "The manufacturers can save about Rs 500 per tonne if
they use coal efficiently instead of furnace oil." This technology is
available and extensively used globally. He also emphasized the use of coal for
power generation. Replying to a question, he said, "The previous
governments did not give due importance to indigenous coal due to various
political reasons. However, present government is not only keen but also making
efforts to exploit coal potential."
