Mining Sector Continues to Crumble Due to LCs Restrictions

Due to stringent import restrictions and banks refusing to open Letters of Credit (LCs), Pakistan’s mining industry is facing significant challenges.

All issues point towards impending doom for Thar Coal mine and its power projects, as critical spare parts and operational equipment are stuck at ports, posing a growing threat to Pakistan’s energy security, reported Express Tribune.

If the imports are not released immediately, the country may face a power shortage of over 2,500 MWs in the coming weeks as the mine that supplies indigenous coal to local power plants may halt operations.

Leaving the issue of the Thar Coal mine unattended will aggravate the energy crisis and cause more power shortages, as nearly 30 percent of the country’s total energy requirements are met off the grid. To meet consumer demand and close the energy gap, it is imperative that the opening and clearance of LCs be included on the essential import list and prioritized.

Pakistan is facing substantial currency problems, and the cost of imported coal has risen to $400-450 per ton as a result of the Russian-Ukraine conflict.

Thar coal, if used to its full capacity, has the potential to generate 5,000 MWs of electricity in the coming years, saving approximately $2.5 billion in imports. It can also help reduce the country’s circular debt by more than Rs. 100 billion per year, resulting in a lower overall basket price for consumers.

It is important that the Thar Coal mine and power plants be fostered in all facets to ensure the short and long-term energy security of the country.

Pertinently, the Thar Coal mine can generate around 100,000 MW of electricity for the next 250 years, while an average of 700 TMH units can be generated from it per year if efficient technologies are harnessed and raw materials are made available.

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