Pakistan has plenty of readily available indigenous resources that have the potential and capacity to be utilized for the benefit of the consumers and the country at large.
One such resource which is richly available in Pakistan is Thar Coal. The total reserves for Thar Coal stand at 175 billion tons, which is more than the combined oil reserves of Saudi Arabia and Iran and 68 times higher than Pakistan’s total gas reserves. These reserves have the capacity to produce 100,000 MW of electricity for over 200 years.
Sindh Engro Coal Mining Company (SECMC) is Pakistan’s leading coal producer operating the country’s first openpit lignite mine in Thar Block II, Sindh, Pakistan. SECMC has played a massive role in the development of Thar Coal when it unearthed the first layer of coal in June 2018 and commenced commercial operations for 3.8 million tons per annum (mtpa) output of lignite coal under phase 1 of its plan on July 10, 2019.
The Coal extracted is supplied to a 660MW coal-fired power plant as the overall project was set under the $50 billion China Pakistan Economic Corridor projects, part of Chinese President Xi Jinping’s flagship Belt and Road Initiative.
In December 2021, the company successfully unearthed 10 million tonnes of coal, contributing effectively towards transforming the energy landscape of Pakistan by facilitating the production of electricity using the much-needed indigenous coal reserves.
The record production over the last two and a half years has resulted in the generation of over 10,000 GwHs of electricity contributed to the national grid. Moreover, SECMC’s record production of coal and, resultantly, the generation of electricity using Thar’s coal has benefitted the national economy by saving around $210 million through import substitution during the same period.
In October 2021, SECMC were handed a green signal for the expansion of its Thar Coal Block-II mine to 12.2 million tonnes per annum (Phase-III), after which the coal price of the SECMC mine shall reduce to around $27 per tonne. At such a price, SECMC Block-II coal will become the cheapest fuel source for the country and pave the way for an energy secure Pakistan.
With a move towards indigenous resources and expansion, the country’s current account will face an immediate positive relief with forex savings of USD 420 million per annum on account of its foreign exchange preserved.
In 2021 alone, the Thar Coal project has saved foreign exchange through import substitution up to the tune of ~PKR 130 million and can lead to potential savings of ~USD 6-8 billion (~which is equivalent to 25 percent growth in export) in the future.
The expansion of the Thar coalfields is aimed at curbing coal imports to ease a staggering current-account deficit made worse by soaring international commodity prices and shipping costs.
Is Thar Coal the positive way forward for Pakistan?
The recent pandemic has created a global supply chain crisis which has contributed to the increasing international commodity prices. Hence, Pakistan’s reliance on indigenous resources such as Thar Coal can create a safety buffer for the country in terms of affordability as well as reliability.
Approximately 50 percent of Pakistan’s energy mix is fueled by imported fuel; hence, adopting a policy of import substitution in the energy sector will also reduce the circular debt by around Rs. 74 billion on an annual basis. This will reduce the cost of production for most local industries that are currently relying on imported fuel.
Moreover, it can position Pakistan as an important hub for countries looking to offshore the manufacturing units to a country with a lower cost of production that will bring in precious foreign investments and kick-start a cycle of increased employment opportunities through economic growth.
Is Thar Coal beneficial to other industries?
With the Phase III expansion, Thar Coal will become a game-changer by creating a positive impact for the country’s economy with enough potential for fueling growth not just in the energy sector but other industries as well.
Thar coal can also be converted to gas and liquid conversion in the future that can prove to be vital for power generation and other industries such as cement, steel, and the fertilizer industry.
Coal plays a substantial role in power generation, but it is also an important ingredient to be utilized as a key raw material to manufacture cement which fuels infrastructural development for Pakistan.
Recently, Thar Coal was utilized by one of the largest cement manufacturers of Pakistan and managed to deliver a very satisfactory result. Moreover, Thar Coal can also be used as synthetic gas by fertilizer companies as the initial studies have shown encouraging results for its use. This approach will help save billions of dollars by reducing the import of coal, RLNG, and other petrochemical products.
How has SECMC contributed to the Thar community?
SECMC created the Thar Foundation (TF) which proudly adopts an inclusive business model which ensures not only the welfare of its shareholders but also focuses on the lives of the consumers, the community, and the country at large. To deploy this agenda, the company has adopted the United Nation’s Sustainable Development Goals (SDG) framework to deploy high-impact interventions prioritizing education, health, economic growth, and women empowerment amongst other areas.
Under the corporate social responsibility ambit, Thar Foundation (TF) operates 27 school units in Thar Block II, with almost 4,100 students enrolled and supervised by over 173 school staff members. Out of the total enrollment of students at the TF schools, 1,400 are girls, with 56 percent female teachers. Additionally, the company also sponsors local students for higher education through many international and local scholarships.
To ensure the provision of basic health care facilities, Thar Foundation, along with its partners also manages the Thar Foundation Hospital, Marvi Clinic, and Gorano Clinic which treat over 5,000 patients on an average every month. These facilities also organize various health camps, pediatric consultation camps, and awareness sessions of preventive healthcare amongst others.
SECMC has also championed some pioneering programs to empower the women of Thar. Our project to train over 65 women to drive the 60-tonne dump trucks at the mine site was recognized on many international platforms, including the UN. There are also many programs under which local women are trained to operate RO plant and manage the maintenance of solar panels at the site.
Read more: Thar Coal: Powering Pakistan
The SECMC project has also contributed to improving and uplifting the local community by generating employment opportunities for the local population and creating other economic avenues for the community. Over 70 percent of the employees in SECMC are locals from Sindh, where the project has provided significant socio-economic benefits to the local Thari population.
The company also aims at maintaining a safety record following international and world-class benchmarks – a feat that has earned international acknowledgments from organizations such as British Safety Council.
With a stellar track record, exemplary project execution, and the adoption of an extensive inclusive business model, Thar Coal can potentially be the answer towards a sustainable growth in Pakistan’s energy sector and the community at large.