Thar coal potential

Prime Minister Shehbaz Sharif has reiterated his desire to see Pakistan fully exploiting Thar coal as a means to reduce its dependence on imported fuels. Speaking at the inauguration of commercial operations of a phase of the public-private partnership Sindh Engro Coal Mining Company’s Thar mine, Shehbaz said Pakistan could save up to $6 billion in foreign exchange once the Thar mines are fully operational.

However, there is some debate over the accuracy of the figure Shehbaz quoted because of fluctuating international coal, oil and gas prices and coal’s share in the overall fuel mix for the energy sector. Also worth noting is that $6 billion is about a quarter of the value of Pakistan’s energy imports last year. Besides, several power plants would have to be retrofitted or otherwise modified to use local coal, which is of lower standard and thus produces less energy and more pollution compared to the higher-grade coal currently being imported. Still, it is indisputable that efficiently exploiting domestic coal would reduce the import bill by several billion dollars. And while Thar coal is of lower standard, the reserves themselves are massive, meaning that the country need not worry about supplies running out or several other supply chain risks attached to expensive imported fuel.

Meanwhile, Sindh CM Murad Ali Shah and his party chief, Bilawal Bhutto Zardari, seconded Shehbaz’s comment that failing to exploit Thar coal decades earlier was a mistake, with Murad claiming that if exploitation had not been stalled after mining first started in 1991, the region would have been producing enough coal to generate 10,000 MW of electricity today. That is about twice the total coal power generated by the country today and about a quarter of total generation capacity. Another sure thing with investment in Thar is that even if the project underperforms, it will still be profitable, which in turn means it will continue to do wonders for the uplift of the people of the region widely considered among the poorest and most underdeveloped parts of the country.

Published in The Express Tribune, October 12^th, 2022.

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