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LOW Source:
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0.98% positivity

KARACHI: Sindh Chief Minister has approved phase-III of Coal Mine expansion project in Thar at an estimated cost of Rs 15.8 billion to excavate 12.2 metric ton coal per annum.

"The third phase would reduce coal price to $27 per ton, making it the cheapest base load fuel in the country and Central Power Purchasing Agency (CPPA) basket tariff would be reduced by Re 0.49/kwh to Rs15.05/kwh by saving to consumers Rs60 billion annually and top of it the Sindh government would earn Rs 10 billion royalty annually."

He said this while presiding over a meeting held here at CM House on Friday, said a statement.

The meeting was attended by Minister for Energy Imtiaz Shaikh PSCM Sajid Jamal Abro, Secretary Energy Abu Bakar, MD Thar Coal Board Tariq Shah, DG Sindh Coal Authority Mushtaq Soomro, Chief Executive Engro Ahsan Zaffar, CEO Engro Corporation Ghias Khan, Vice Chairman House of Habib Salman Burni, Vice Chairman House of Habib Tayab Tareen, CEO HUBCO Kamran Kamal, Saleemullah Memon of HUBCO, Chief Executive SECMC Amir Iqbal, GM Commercial SECMC Tallah Lodhi, CFO SECMC Muhammad Mudassir, GM Tech Mines Expansion Faisal Iqbal Siddiqi and others.

Syed Murad Ali Shah said the journey of Thar Coal was started in 2009 with a joint venture partnership between the Sindh government and Sindh Engro for development of Thar Coal.

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"Numerous challenges were associated with the project and each challenge had the potential of shelving the project," he said, adding "however, only due to unwavering commitment and resolve of the Sindh government the project was commissioned on July 10, 2019."

Minister for Energy Imtiaz Shaikh briefing the CM said the phase-I of Sindh Engro Coal Mining (SECM) project executed successfully and 660MW was in operation from the last two years.

At this the CM said his government would utilise Thar Coal beyond the power sector. Sharing spot prices of raw material used to produce energy in the country, the CM was told that the LNG was being purchased at $35 per MMBTU, imported coal at $9.7MMBTU, Residual Fuel Oil (RFO) at $12.4/MMBTU and Thar coal at 5.95 MMBTU. The CM said the figures showed that the cheapest source of producing energy was Thar Coal.

The CM was told that in the first phase (July 2019) 3.8 Mtps was being excavated for generation of 660MW. In the second phase 7.6 Mtpa is being excavated for generating 1320MW energy and in the third phase after expansion 12.2 Mtpa to be excavated for generation of 1980MW.

The Minister for Energy said the cost of the first phase was $627 million, while the cost of second phase came down to $216 million and the third phase would come down considerably to $93 million. He added that phase-III expansion would make Thar Coal the cheapest base load fuel in the country.

With the completion of third phase, $420 million forex would be saved annually against the imported coal, the CM said, adding it would bring reduction in circular debt of Rs74 billion annually - resulting in 16 percent reduction in rate of rise in circular debt. According to the CM the price of Thar Coal would be reduced to $27 per ton, making it the cheapest base load fuel in the country.

He added that the Sindh government would earn Rs 10 billion annually. The CM after thorough discussion and deliberations approved the third phase for Rs15.8 billion. The project would also be referred to the provincial cabinet for final approval.

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