The Province of Sindh is endowed with huge coal resources comprising 185 billion tones, out of which 175 billion tones are at Thar. The Thar resource is the seventh largest coal deposit in the world and first largest single resource having potential of power generation of 100,000 MW for 300 years.
The Government is striving hard to develop the indigenous coal resources of Sindh, which exist in abundance, but unfortunately have remained unutilised since decades. In order to fast track the development of coal, especially the largest coal resources of Thar, one stop decision taking body Thar Coal and Energy Board (TCEB) was established under the Chief Executive of the Province with representation from Provincial and Federal Governments as well. Besides this, the present Government also created Coal and Energy Development Department in April 2009 mainly to focus on the exploration and development of coal resources of Province. The creation of the Board has yielded positive results, as proper and timely decision making is facilitated.
Major achievements of TCEB include approval of Joint Venture Project between Government of Sindh and Engro Group, based on first ever International Competitive Bidding (ICB), Development of historic Fiscal Incentives for indigenous coal based projects, which were subsequently approved by ECC on 15th October, 2010, Institutional Development (TCEB Act, 2011 & Draft Sindh Coal Act, 2011, Interim Resettlement Framework Guidelines), Approval of Coal Pricing Mechanism, Development of Coal Royalty Model and allocation of blocks as a result of 2nd ICB conducted by the Government of Sindh in March, 2011.
Pakistan today is passing through its worst energy crisis. The economy has suffered loss of billions of rupees, besides loss of several hundred thousand jobs. In one of the studies undertaken by Beacon House University, in 2008 alone due to energy crisis alone the economy suffered a loss of Rs 295 billion and job losses of 400,000 jobs. As a percentage of GDP the adverse effect was to the tune of 2%.
The situation is further aggravating due to the dwindling gas reserves and rising oil prices, and unless we find alternate resources for energy generation our industry will become uncompetitive resulting in decline in exports and further shrinking of economy. Energy security for any country comes from cost effective indigenous base load resources. Pakistan is extremely lucky as Almighty Allah has blessed it with one of the largest lignite coal reserves.
However, for development of Thar Coal there is requirement of providing enabling environment which includes a capable and empowered governing body and developing physical infrastructure that can contribute to the mining and power generation including provision of water required for mining and power generation, disposal of waste, road and railway network for transportation of equipment and other material land use plan and resettlement plan. The government has accordingly devised strategy to plan and execute all of these infrastructure projects as per required timelines. Necessary funding from Federal and Provincial Governments are being arranged for these projects on priority basis.
Thar Coal provides almost unlimited investment opportunities like coal mining, power generation, underground coal gasification, coal to liquid technologies and brigading through which dried lignite can be utilised by Thermal Power Plants presently working on expensive imported furnace oil.
So far, Government of Sindh has developed 10 blocks of the coalfields covering an area of around 1000 sq. km. out of 9100 sq. km. The projects underway on the ground include: Block-I: Allocated to the Global Mining Company of China with projected mining of 5 Million Tons Per Annum and 900 Megawatts in Phase I. GMC also intends to invest US $1.5 billion in key infrastructure projects in Block I of Thar Coalfield.
Block-II: Allocated to Sindh Engro Coal Mining Company which is a Joint Venture with 40% share of Sindh Government and 60% share of Engro. 2 X 600 megawatt Power Plant has been planned by the company with Open Pit Mining of 6.5 million tons per annum. The Bankable Feasibility for this project was completed in August, 2010 and now the SECMC is working to achieve financial close. Chinese funding through Pak-China Joint Energy Working Group is also being solicited for this project. Block Ill-A: Allocated to Cougar Energy UK, with a planned generation of 400 Megawatts. It is an underground Coal Gasification Project planned through Ergo Energy Technology.
Block-V: Underground Coal Gasification Pilot Project by the renowned Pakistani scientist Dr Samar Mubarakmand. 2X50 Megawatt IGCC Power Plant has been planned under this project. Test burn is planned in near future. Block-VI is being worked by Oracle Coalfields, PLC, UK for open pit mining of 1.5 million tons per annum and 300 megawatts Power Generation in the first phase. Their Feasibility Study is completed and they planned to start mine development by mid of 2012.
The Government of Sindh, as part of its investment promotion program for coal mining and energy sector is conducting another International Competitive Bidding by inviting expression of interest from technically and financially sound companies or consortia for developing open cast mines at Block VIII, IX, & X of Thar Coalfields for Power Generation and other uses. With these consistent efforts of the Government, the dream of Thar Coal development will come true and goal of energy security to the country will be achieved.
(The writer is Secretary Coal and Energy Development Department, GoS/MD Thar Coal and Energy Board)