You may have heard about the term “Thar Coal Project” tossed around here and there on the media. It has been mentioned time and time again because of its massive potential and the governments ignoring it over the decades. While coal is environmentally unfriendly (Thar’s coal isn’t even top grade standard), it can be converted to gas and can be less damaging if utilised through proper techniques.
The Thar Coal Project is a coal mining project based in the Thar desert in Sindh. The prospected coal reserves in this area amount to a massive 175 Billion tonnes of coal. To put that into perspective, Pakistan’s total coal reserves are 186 billion tonnes. Thar contains 94 percent of Pakistan’s total coal reserves.
The amount of coal here is huge, so much so that it is even greater than the oil reserves in Saudi Arabia and Iran. When converted to gas the coal deposits equal 2,000 trillion cubic feet, which is 68 times higher than Pakistan’s current gas reserves.
You may be wondering, what are we doing with so much coal buried underneath? The Thar coal mining and power project has finally entered the construction phase and will be completed by June 2019. The power plant would generate 660 MW of power while coal mining will start from fourth quarter of 2018.
Sindh Engro Coal Mining Company (SECMC), in partnership with the Sindh Government has been given Thar block-2 which contains less than 1% (1.57 billion tonnes) of the total coal in the area. This will be enough to generate 5,000 MW of energy for the next 50 years.
The financials of the project were finalized by April 2016 and it was estimated to take 42 months to complete. SECMC Chief Executive Officer Shamsuddin Ahmad Shaikh says,
We have achieved 9.5% progress compared to the planned 8% in the mining project; we are hopeful we will complete the mining and power plant project in 38 months.
The original target was to finish by October 2019 but now it will finish by 3rd June 2019, according to the CEO. He added that Pakistan will be making 2,700 MW of electricity through the coal reserves by December 2020. The tariff for power generated through coal would be intially around 10 cents per unit which will drop to 6 cents per unit in eight years, owing to increased production of coal and falling prices.
The project has become a part of CPEC with China providing for 54.5% of the total costs for the project.
Sindh government would receive a 2.5% royalty from the coal produced from Thar. This amounts to $7-8 million per year, initially, which will increase to Rs. 3-3.5 billion in the future. SECMC CEO says that they have requested the Sindh government to invest the royalty towards the betterment of the Thar region. To help eradicate the poverty and health issues aside from the lack of basic facilities plaguing the region.
He added that they had hired unskilled manpower from Thar and had them train at well reputed institutes. Presently skilled workers are working on the project.
