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Treasure Magazine

CM okays Phase-III Coal Mine expansion project in Thar

3 min read
Thar Coal

KARACHI: Sindh Chief Minister has approved Phase-III Coal Mine expansion project in Thar at an estimated cost of Rs15.8 billion to excavate 12.2 Mt coal per annum which is bound to save $420 million forex annually against the imported coal. 

“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 reduce by Rs0.49/kwh to Rs15.05/kwh by saving consumers Rs60 billion annual and top of it the Sindh government would earn Rs10 billion Royalty annually.” 

This he said while presiding over a meeting held here at CM House on Friday. The meeting was attended by Minister 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.

Murad Ali Shah said that 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. “Numerous challenges were associated with the project and each challenge had the potential of shelving the project,” he said and added “however, only due to unwavering commitment and resolve of the Sindh government the project was commissioned on July 10, 2019.

Minister Energy Imtiaz Shaikh briefing the chief minister said that the successful execution of Phase-I of SECM project 3.8 MT/annum and 660 MW was in operation from the last two years. He added that 2640 MW power plants were under construction and 11.8 mt/a incremental mine construction was in progress. At this the chief minister said that his government would utilize Thar Coal beyond the power sector.

Sharing spot prices of raw material used to produce energy in the country, the chief minister 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. At this the chief minister said that the figures showed that the cheapest source of producing energy was Thar coal.

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

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

Benefits of Third phase: with the completion of third phase savings of $420 million Forex annually against the imported coal, the CM said and added it would bring reduction in circular debt of Rs74 billion annually- resulting in 16 percent in reduction in rate of rise in circular debt.

According to the chief minister the price of Thar coal would reduce to $27 per ton, making it the cheapest base load fuel in the country. CPPA basket tariff would be reduced by Rs0.49/kwh to Rs15.05/kwh by saving consumers Rs60 billion annually. He added that the Sindh government would earn Rs10 billion annually through 

Third Phase: the chief minister 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.

The chief minister decided to talk to the federal government to develop a rail link from Thar to upcountry so that Thar coal could be transported for coal-based power plants operating all over the country.