Govt to shift Thar mining operations to grid power

Move expected to save $25–30 million annually, reduce power costs by up to 60%

ISLAMABAD:

The Power Division has announced a major reform package for the Thar coal project, deciding to shift mining operations from diesel to electricity supplied through the national grid.

According to an official statement, the decision was taken under the leadership of Prime Minister Shehbaz Sharif and on the strategic direction of the federal minister for power to resolve longstanding operational issues in Thar coal mining.

The initiative marks a significant reform step, with authorities deciding to substantially reduce the use of diesel in mining operations and transition to electricity-based systems.

Officials said the move is expected to result in daily savings of Rs25 million in diesel expenses, while annual foreign exchange savings are projected at $25–30 million. The cost of coal is also expected to decline by $0.7 per ton, contributing to a notable reduction in electricity generation costs.

Under the plan, electricity generation costs linked to Thar coal are likely to drop by up to 60%, with per-unit costs expected to fall from 33 cents to 13 cents.

The statement noted that mining operations previously consumed between 200,000 to 250,000 litres of diesel daily, while an additional 35,000 litres were used for dewatering. The burden of these diesel costs was ultimately passed on to consumers through electricity tariffs.