Thar Coal – Energy security for Pakistan

Published: January 30, 2012
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The Thar Lignite Coal resources are
equivalent to around 50 billion
tons of oil, which is
more than the combined oil
resources of Saudi Arabia and
Iran. PHOTO: FILE

The Thar Lignite Coal resources are equivalent to around 50 billion tons of oil, which is more than the combined oil resources of Saudi Arabia and Iran. PHOTO: FILE

Discovered accidentally in the year 1989, during an exploration project of defunct SAZDA (Sindh Arid Zone Development Authority) to find drinkable water in the desert, Thar Coal has remained a matter of active national debate. The size and the quality of Thar Coal reserves were known to a great extent since 1993 after a study by John T Boyd Company, US Mining consultants, only to be reinforced in subsequent studies by other international experts. However, there have always been conflicting views which at times create confusion about technical viability and commercial feasibility of mining and power generation on Thar Coal.

Thar Lignite Coal resource was initially estimated to be around 135 billion tons which was subsequently enhanced to 175 billion tons after review of data by USGS (United States Geological Survey) and GSP (Geological Survey of Pakistan). This estimate was based on distanced bore holes over an area of 9,000 sq kms which meant a source estimate of around 194 million tons of lignite per sq km. Subsequent explorations carried over an area of 1,200 sq have provided even higher figures of proven reserves of being around 200 to 350 million tons of lignite per sq km.

According to the standard conversion rates, the Thar Lignite Coal resources are equivalent to around 50 billion tons of oil, which is more than the combined oil resources of Saudi Arabia and Iran. In terms of gas reserves, these are around 68 times the present resources of natural gas in Pakistan.

Shenhua – an opportunity missed

In 2002 China sent a team of 136 coal mining engineers, geologists, hydro-geologists and power plant specialists with M/s Shenhua Group, to open up Thar coal resources for commercial use. The company established a field camp in the desert and worked on Thar Coalfield for a period of two years. In 2004, they prepared a comprehensive feasibility report which found the Thar lignite resource suitable for commercial mining and proposed open cast mining with mine-mouth power generation of 600 MW in the first phase to be scaled upto 3,000 MWs based on the lignite reserves in Block II, with an area of 55 sq kms (0.6% of Thar coalfield area of 9,000 sq kms).

Shenhua Group asked for a tariff of 5.6 US cents per KWH for the electricity generated by its proposed power project. They asked for just a transmission line to be provided by the government. At that time we were buying electricity from IPPs at 6.5 US cents per KWH. However, Wapda insisted on a tariff of 5.3 US cents per KWH and negotiations broke down. A subsequent feasibility report by Germany’s RWE Company funded by the Federal and Sindh Governments proved that the real commercial cost for power generation in first power project on Thar Coal, as per European standards could be upto 7.6 US cents per KWH.

The revival in 2008 

In May 2008, the Government of Sindh through the Mines and Mineral Development Department (the predecessor of Coal and Energy Department) offered a joint venture, a public private partnership, to the private sector with a 60:40 (Private : GOS) equity participation and management control with the private partner. A joint venture company with the name of Sindh Engro Coal Mining Company was formed and it started working on the work left unfinished by the Chinese in Block II.

The writer is Secretary Coal and Energy Development Department, Government of Sindh.

Published in The Express Tribune, January 30th, 2012

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Reader Comments (13)

  • khan
    Jan 30, 2012 - 6:20AM

    the chinese have been minting our resources and making profits like crazy. Like fools we are selling our precious resources to the chinese who bring their own labor, own equipments, own management, own engineers and also drive home lion share of output + profits. Further, as another article from ET pointed out, Thar coal is financially not a viable solution, as the per unit cost of producing electricity far exceeds the payment capabilities of buyers. Specially when our Govt is bankrupt, with Rs 1 trillion foreign debt, and almost all companies are fighting in circular debt. Which fool will invest in such projects or overall here??

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  • Aristo
    Jan 30, 2012 - 11:43AM

    Thar Coal is a myth. Stop fooling the nation.

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  • Vinayak
    Jan 30, 2012 - 3:44PM

    @Author

    Subsequent explorations carried over an area of 1,200 sq have provided even higher figures of proven reserves of being around 200 to 350 million tons of lignite per sq km.

    According to the standard conversion rates, the Thar Lignite Coal resources are equivalent to around 50 billion tons of oil,

    How can 350 mill tonnes of lignite be equivalent to 50 billion tonnes of oil !!

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  • Anishu
    Jan 30, 2012 - 5:21PM

    Dude.. Its 350 mill tonnes/sq km…..

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  • Soap
    Jan 30, 2012 - 6:05PM

    We produce the finest engineers who are working all over the world. when would we start relying on our home grown resources instead of chinees and others?

    and yes PTI has a plan to explore this.

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  • Masato
    Jan 30, 2012 - 6:14PM

    @khan: It’s not just the Chinese, we’ve been selling out all our resources for dirt cheap to just about every foreign investor who bothers coming to this country.

    @Aristo: Could you please elaborate?Recommend

  • TN, Advocate
    Jan 30, 2012 - 10:09PM

    We even don’t know the boundaries of Thar coal fields and keep relying on 6 or 8 Blocks for miracles.
    Sindh or as a matter of fact the Federal Govt do not have funds, equipment and experts to do an extensive survey.
    Kindly request USGS to conduct the gravity survey they conducted in Afghanistan to find one of the largest lithium mine, 1.3 billion barrels of oil, substantial gold and copper deposits etc.
    The 175 billion tons or so of coal will wait till dooms days.
    Chinese, Canadians, Americans left Thar because of our attitude.
    BEGGARS CAN’T BE CHOOSERS!
    Kindly do some soul searching and get our act together before it is late.

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  • Khan
    Jan 31, 2012 - 2:22AM

    Too many indians in this comment page pretending to be Pakistani. Long Live Pakistan-China Friendship.

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  • Usman Lakhani
    Jan 31, 2012 - 4:03PM

    @Vinayak: Its 350m tonnes per sq km and the estimated area is 9000 sq km. So that is (9000*350) =3,150,000 million tonnes of coal. I think adjustments for carbon content in coal compared to oil then lead to the 50bn figure. Hope that makes more sense.

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  • Jan Mohammad
    Jan 31, 2012 - 10:17PM

    A generation fed on hopelessness cannot digest good news. Thar coal is just too good for us and some of us keep on denying it. We have expertise in large scale mining and there is no harm in learning from those who know it. It is not only Chinese but Germans and Australians as well. Rather than importing oil, its better we import some expertise on coal.

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  • Kataria
    Feb 1, 2012 - 6:45AM

    The obsession with China is a dead giveaway that the troll is indiyan.

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  • FAIZAN YOUSUF
    Feb 8, 2012 - 11:23PM

    Assalam Allaikom

    Those who are talking about feasibility of Thar coal electricity production…. guys this coal are very much feasible for the production of electricity and can produce electricity for next 100 years at lower rate giving other useful products as well like oil, grease. This resource has very worth but we are unable to use it. Our government is not interested in solving this matter as elections are near. Mind me almost all parties are going to say that “They will make this resource worthwhile if they get the presidency seat”.
    One of the experiment is successful in producing electricity from coal. Only the need is to find investors….

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