THAR COAL REMAINS UNEXPLOITED

LACK OF TECHNOLOGIES AND FUNDS STOPS TAKEOFF

SHABBIR H. KAZMI
(feedback@pgeconomist.com)

Dec 12 - 18, 20
11

The Thar coalfield is located in Thar Desert, Tharparkar District of Sindh province in Pakistan. The deposits, discovered in 1991 have been termed 134th largest coal reserves in the world.

Pakistan has emerged as one of the leading country - seventh in the list of top 20 countries of the world after the discovery of huge lignite coal resources in Sindh. The economic coal deposits of Pakistan are restricted to Paleocene and Eocene rock sequences. It is one of the world's largest lignite deposits, spread over more than 9,000 square kilometers estimated at around 175 billion tons sufficient to meet country's fuel requirements for centuries.

The coal beds of variable thickness ranging from 0.20 - 22.81 meters are present. The maximum number of coal seams found in some of the drill holes is 20. The cumulative thickness of the coal beds range from 0.2 to 36 meters. Clay stone invariably forms the roof and the floor rock of the coal beds. The coal is brownish black, black and grayish black in color. The quality of coal is better where percentage of clay is nominal.

The area is accessible by a 410 kilometers metalled road form Karachi up to Islamkot via Hyderabad-Mirpurkhas- Naukot and Thatta-Badin-Mithi-Islamkot.

Road network connecting all the major towns with Thar coalfield have been developed. The rail link from Hyderabad is up to Naukot, which is about 100 kilometers from Islamkot.

According to Dr. Murtaza Mughal, President Pakistan Economy Watch, these coal reserves worth US$25 trillion can not only meet electricity requirement of the country for next 100 years but also save almost four billion dollars in staggering oil import bill. He believes that a minuscule two per cent use of Thar coal can help in producing 20,000MW electricity over the next 40 Years, eliminating load shedding permanently. His estimates show that power generation from coal would cost Pakistan less than Rs6 per unit while power generated by Independent Power Projects cost around Rs10 per units.

Pakistanis often wonder if Thar is such a mammoth treasure why it has not been exploited as yet. Some of the experts are of the view that petroleum lobby is very strong in Pakistan and it is totally against any other means of power generation except for the imported oil. This lobby is major beneficiary of the increasing oil bill that is estimated to touch US$15 billion this year.

They go to extent of saying that Chinese were working hard on coal mining and also ready to make huge investment in coal-based power generation but their engineers/workers have been attacked repeatedly so that they could pack up and go home.

One can still recall that creation of independent company was proposed for coal mining, handling, transportation and introducing advanced coal mining and refining technology on the basis of the comprehensive mining study carried out in 2004 by Rheinbraun Engineering of Germany on a block of 100 square kilometer of Thar coalfields.

In the first phase, one modern mine with an annual output of six million tons of coal would be developed to cater to fuel requirement of a 1,000MW power plant.

However, much needed capital could not be made available as the provincial as well as federal governments face severe financial crunch.

Experts also say that funds from the international donor agencies will not be solicited because first of all lukewarm efforts have been made to solicit funds. The government also had plans to induct the private sector that has yet to come forward to invest in this venture primarily due to peculiar characteristics of the project and risks involved in coal mining. They also say that no Coal Policy is in place, which could help in soliciting investment and technology transfer in the coal mining sector.

Experts say that experience of setting up an integrated coal mining and power generation facility has not been successful in Pakistan. Lakhra Coal Development Company Limited (LCDC) was established in 1990, with paid up capital of Rs50 million, as a joint venture of the Pakistan Mineral Development Corporation, WAPDA and the Government of Sindh, to develop Lakhra coalfields and to supply coal for 150MW coal-fired power plant at Khanot, District Dadu. Since then, it could develop only 43 coal producing mines out of a total of 149 mines that cover, in total, an area of over 32 square kilometer with proven coal reserves of 40 million tons.

Support infrastructure including water, electricity, rail/road networks and telecommunication is available in the area since long, and a large number of foreign consultants and agencies were contracted, from time to time, to carry out feasibility studies for mining and/or power generation at Lakhra. The long list of world-reputed consultants produced voluminous bankable documents but Lakhra power plant had to be closed.

Experts fear that if Lakhra coalfields spread over less than 70 kilometers having indicated coal reserves of 1,328 million tons and total mine-able coal reserves of 305 million tons could not be exploited how can Thar coalfields spread over 9,000 square kilometers having coal reserves of over 175 billion tons, including 2.70 billion tons of measured reserves would be exploited. If the LCDC at much smaller scale could not achieve its objectives, how can one reassure the investors that any mega company would meet its coal requirements fully and timely?

One of the proposed solutions is that instead of going for a mining company, the government qualifies sponsors with strong technical and financial credentials to develop integrated mine-cum-power generation projects, ensuring economy of scale, mine efficiency and safety, operational reliability, pollution control and advanced mining and clean coal technology.