Pakistan and coal

From Global Energy Monitor
This article is part of the Global Energy Monitor coverage of coal and power industry data
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Pakistan is a small producer and consumer of coal with abundant resources. In 2019, it produced 5 million tonnes.[1]

Coal Resources

Coal was first discovered across Pakistan and the rest of South Asia in the 1880s and was used by the British-owned railway companies under colonial rule. Later, post-colonial Pakistan had used coal to fule its industry from independence to the discovery of the Baluchistan's Sui gas field in 1952 and the Toot oilfield in 1964.

Pakistan’s total coal resource is reported as some 185 billion tonnes, within which ‘measured reserves’ are 3.45 billion tonnes, ‘indicated reserves’ nearly 12 billion tonnes, ‘inferred reserves’ 57 billion and ‘hypothetical resources’ 113 billion. Clearly a high proportion of the quoted total resource has, at this point in time, a relatively low degree of geological assur- ance, being comprised of inferred reserves (lying within a radius of 1.2 to 4.8 km from a point of coal measurement) and hypothetical resources (undiscovered coal, generally an extension of inferred reserves in which coal lies more than 4.8 km from a point of measurement).

The World Energy Council in 2011 applied a recovery factor of 0.6 to the measured reserves, resulting in estimated recoverable amounts (in million tonnes) of 166 of subbituminous and 1904 of lignite.[2]

Pakistan's largest coal reserves are found in Sindh with approximately 184,123 million tonnes:[3] [4] [5]

Category Reserve Classification Quantity Units Data Year
BGR Estimate Reserves 3,064 [1] million tonnes 2019
BGR Estimate Resources 182,528[1] million tonnes 2019
Geological Survey Reserves 185,500[6] million tonnes 2004
Geological Survey Resources million tonnes
Commercial Reserves Reserves million tonnes
Commercial Resources Resources million tonnes

Thar Coalfield

The discovery of low-ash, low-sulfur lignite coal reserves in the Tharparkar (Thar) Desert in Sindh province increase both domestic and foreign development interest in using the coal for a local coal-fired plant in Pakistan. President of Pakistan Economy Watch Dr Murtaza Mughal has said there are 185 billion tonnes of coal worth USD $25 trillion[7] In 2007, the Shenhua Group of China withdrew from a $1.5 billion Thar coal project because it considered the power tariff rate inadequate for power generation.[8]

In October 2009, the Sindh government set up a joint venture company — the Sindh Engro Mining Company —on a 40:60 ratio for exploration in Block 2 of the Thar area, done through international competitive bidding. The company planned to develop an open pit mine of 6.5 million tonnes per annum capacity initially which would be scaled up to 22.5 million tonnes per annum subsequently. Power generation would be carried out by Engro Power Gen. Initially, 1,200 megawatts would be generated and it would be raised to 4,000 MW. The first megawatt of electricity from Thar into the national grid was planned for 2015-2016. A licence had also been granted for an experimental project on coal gasification.[9]

In December 2009 the Karachi Electric Supply Company (KESC) signed a Memorandum of Understanding (MoU) with Oracle Coalfields, a company incorporated in England and Wales and primarily engaged in coal drilling, exploration, mining, and production, to set up a major coal-fired power plant fueled by coal to be mined at Thar Coalfields in Sindh. According to the MoU, Oracle Coalfields will own and operate the mine supplying coal to the power plant. A KESC release said the intention of KESC is to be one of the pioneers in tapping indigenous Thar coal reserves for power generation.[10]

The Sindh government in Pakistan signed a $30 million agreement with the World Bank for the Thar Coal and Power Technical Assistance Project (TCAP). However, in May 2010 Pakistani news outlets reported that the World Bank had withdrawn from the project. One anonymous government official stated that "major reasons for the World Bank's withdrawal from the project is lack of emphasis on Thar coal resources in our national energy policy and our failure to highlight these reserves as critical for our national security." One issue reportedly of concern to the World Bank was the resettlement of local people.[11]

In 2011, Sindh Engro Coal Mining Company’s Chief Executive Officer Khalid Mansoor warned that delay in provision of infrastructure like water and transmission lines might jeopardise the $3.4 billion coal project at Thar. The joint venture between the Sindh government and Engro and is scheduled to produce 1,200-MW in the first phase by 2015-16 and 4,000-MW in the second phase by 2020. In a presentation on Thar coal to Prime Minister Syed Yousuf Raza Gilani in Karachi, Mr Mansoor said that lack of grant payment of Rs10 billion by the federal government had created financial difficulties for smooth running of the project. Thar Coal Energy Board Managing Director Ajaz Ali Khan endorsed the views of Mr Mansoor and said that the vital infrastructure projects for Thar coal development was needed by 2015, at an estimated cost of Rs148 billion. Khan requested the prime minister to organise an international conference donors such as the World Bank, the International Finance Corporation and investors from China, USA, UK, Japan and the Middle East for attracting foreign direct investment in Thar coal projects.[12]

On May 14, 2011, Pakistan's Federal Finance Minister Abdul Hafeez Shaikh assured the Thar Coal Energy Board (TCEB) that the federal government would provide "all possible assistance and funding" for infrastructure development for the Thar coalfields. He gave this assurance at a meeting of the TCEB chaired by Sindh Chief Minister Syed Qaim Ali Shah, which gave an update on infrastructure development projects that included a water supply scheme of Makhi-Farash, transmission network, railway link, effluent disposal, etc. The meeting also discussed infrastructure projects that included a water supply scheme for Thar coalfields, a 296-kilometre-long road from Karachi to Islamkot via Thatta, and an airport at Islamkot with an estimated cost of Rs972 million.[9]

According to official sources, the chief minister emphasised that the development of Thar coal was the "central policy agenda of the government" and "indigenous resources could resolve the chronic energy problems of Pakistan for the next 100 years." TCEB, on the basis of recommendations of the committee, allocated coal blocks offered for bidding to various local and international bidding companies based upon the companies' financial strength, mining capabilities and project timelines. The chief minister noted that a fiscal incentives package for indigenous coal-based projects had been approved.[9]

On November 24, 2011, Science and Technology Planning Commission member Dr Samar Mubarakmand said the Thar coal project will become operational in December 2013 at a cost of Rs8.898 billion, with a foreign exchange component of Rs 5.847 billion.[13]

Type of coal found

Bituminous coal is a relatively hard and less sulfurus coal containing a tar-like substance called bitumen and would be burnt largely on domestic fires after being turned into coke fuel. Sub-bituminous coal is a coal whose properties range from those of lignite to those of bituminous coal and is used primarily as fuel for steam-electric power generation. It is set to fuel power stations and cement works in Pakistan.

Lignite is a low-grade, sulfurous coal that is generally used in modified industrial furnaces to generate heat for boilers, coke oven heaters, brick kilns, etc.

China to invest in Thar

Sino-Sindh Resources, a local subsidiary of Global Mining Company, is investing in Pakistan's Thar Coal Block-1 for coal mining and power generation of 900 Mega Watt (MW), signing an MoU with the government of Sindh for the project in September 2011. The company plans to invest US $4.5 billion until 2016. Thar Coal field would also be declared a Special Economic Zone, and mining would be started in April, 2012.[14]

Coalfields

Region Coal (Million Tonnes)
Sindh: Lakhra, SondaThatta, Jherruck, Thar, Others 184,123
Punjab: Eastern Salt Range, Central Salt Range, Makerwal 235
Balochistan: Khost-Sharig-Harnai, Sor Range/Degari, Duki, Mach-Kingri, Musakhel Abegum, Pir Ismail Ziarat, Chamalong 617
Total 184,975

Coal Production

In 2019, Pakistan produced 5 million tonnes.[1] There are reportedly 1000s of small coal mines in the Duki district, most of it used in brick kilns and other factories such as textile and cement. The mine owners are private individuals, rather than corporations, and more than half the workers are from Afghanistan. These mines have long histories of unsafe work conditions. There are an additional 50 small coal mines operating in the Musakhael district. The Thar mine is a new project with massive resources first discovered in the 1990s.[15]

Sindh's Thar desert and Neyveli (in Pakistan) lignite mines will also be expanded soon for industrial usage. Special measures are being employed to reduce the resulting fly ash, carbon footprint and sulphur fume emission problems after it's burnt.

Mine disasters

March 2011: 43 killed in explosions

On March 19, 2011, it was reported that at least seven miners were killed and 41 others trapped underground when three explosions triggered a collapse in a coal mine in Pakistan’s Baluchistan province. The miners were working around 1,200 metres underground in the far-flung Sorange district of an insurgency-torn province. Officials said the chances of the missing surviving were slim. The mine was poorly ventilated, allowing poisonous gases to accumulate and, officials believe, causing the three blasts. The coal mine is run by the state-owned Pakistan Mineral Development Corporation. Baluchistan is plagued by an insurgency wanting more jobs and royalties, with hundreds of people dying in the violence since 2004. Most coal mines in the impoverished province are notorious for poor safety standards and facilities, with similar deadly accidents having occurred in the past.[16]

On March 22, 2011, it was reported that 43 were presumed dead, all bodies were recovered. Iftikhar Ahmed, a government mine inspector, said the mine was declared dangerous two weeks prior because of methane gas, but the warning was ignored by the contractor. A total of nine miners were rescued. State officials promised action against those they deemed responsible for ignoring warnings to stop mining due to methane buildup inside the mine shaft. [17][18]

Thar Coal Underground Gasification project

The Thar Coal Underground Gasification (TCUG) project led by nuclear scientist and member Planning Commission Dr. Samar Mubarakmand has been allocated Rs2.5 million by the Ministry of Petroleum and Natural Resources. The estimated total cost of the project is Rs126.649 million, but as of June 2011 has funding of Rs20 million. Under the project, coal would not be mined but rather plants would be installed on deposits to produce gas.[19]

On November 24, 2011, Mubarakmand said the work was in progress and the first 50 megawatts of the gasified project had almost been completed.[20]

Coal Infrastructure

China-Pakistan Economic Corridor

The China-Pakistan Economic Corridor is a major development megaproject to connect multi-billion dollar Port Gwadar in southern Pakistan to China’s northwestern autonomous region of Xinjiang via network of highways, railways[21] and pipelines to transport oil and gas.[22] The economic corridor is considered central to China–Pakistan relations and will run about 3,000 km from Gwadar to Kashgar. Overall construction costs are estimated at $46 billion, with the project expected to be completed by 2030.[23][24] The Corridor is an extension of China’s proposed 21st century Silk Road initiative.[25]

Other than transport infrastructure, the economic corridor will also provide Pakistan with telecommunications and energy infrastructure. The project also aims to improve intelligence sharing between the countries.[26][27] China and Pakistan hope the massive investment plan will transform Pakistan into a regional economic hub as well further boast the growing ties between Pakistan and China.[28] Pakistan media and government call this massive investments as "game and fate changer" for region.[29][30]

During the visit of President of China Xi Jinping to Pakistan in April 2015, he wrote in an open-ed that "This will be my first trip to Pakistan, but I feel as if I am going to visit the home of my own brother." During his visit, Islamabad was dotted with slogans signboards which reads "Pakistan-China friendship is higher than mountains, deeper than oceans, sweeter than honey, and stronger than steel." [31]

History

Chinese Premier Li Keqiang was among the first advocates of the project; since then Chinese President Xi Jinping, former Pakistani President Asif Ali Zardari and Pakistan Prime Minister Nawaz Sharif have become strong supporters of the project. On 20 April, Pakistan and China signed an agreement to commence work on the $45 billion agreement, with $28 billion in immediate projects, and $17 billion in projects in the pipeline. $46 billion dollars is roughly 20% of Pakistan's annual GDP.

The deal will add 10,400 Megawatts to Pakistan's energy grid through coal, nuclear and renewable energy projects.[32] Also included are major upgrades to Pakistan's transport infrastructure.

Proposal

The first phase involves development at Gwadar Port and the construction of an international airport. It will be carried out by 2017, with Chinese companies expected to participate. The Karakoram Highway connecting the two countries will also be widened, while the rail network between Karachi in southern Pakistan and Peshawar in the north will be upgraded. The two countries also plan a fiber-optic communications link between them.

The project received a major boost when control of Gwadar was transferred to China’s state-owned China Overseas Ports Holding in February 2013. Built by Chinese workers and opened in 2007, Gwadar is undergoing a major expansion to turn it into a full-fledged deep-water commercial port. Pakistan and China have signed agreements for constructing an international airport at Gwadar, upgrading a section of the 1,300-kilometre Karakorum Highway connecting to Islamabad and laying a fibre-optic cable from the Chinese border to the Pakistani city of Rawalpindi.[33][34] With the development of the corridor Central Asia, traditionally an economically closed region owing to its geography and lack of infrastructure, will have greater access to the sea and to the global trade network.[35] The Pak-China Economic Corridor Secretariat was inaugurated in Islamabad on August 27, 2013.[36]

On November 2014, Chinese government announced that it will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan as part of CPEC. Documents quoted by Reuters show that China has promised to invest around $33.8 billion in various energy projects and $11.8 billion in infrastructure projects which will be completed by 2017 at most. The deal includes $622 million for Gwadar port, According to Reuters, under the CPEC agreement, $15.5 billion worth of coal, wind, solar and hydro energy projects will add 10,400 megawatts of energy to the national grid of Pakistan.[37][38]

Projects

A total of 51 MoU's were signed in diverse sectors between China and Pakistan during the visit of Chinese president to Pakistan on 20 April 2015.[39]

Major coal-related projects under the corridor umbrella are:[40]

  • Financing cooperation agreement between the EXIM Bank of China and Port Qasim Electric Power Company (Private) Limited on Port Qasim EPC power station,
  • Gwadar Port - Completed, handed over to China for 40 years starting 2015[41]
  • Agreement on Port Qasim EPC power station between Power China and GoP.
  • Terms and conditions in favour of Sindh Engro Coal Mining Company for Thar Block II 3.8Mt/a mining project, Sindh, Pakistan, arranged by China Development Bank Corporation
  • Terms and conditions in favour of Engro Powergen Thar (Private) Limited, Sindh, Pakistan for Thar Block II 2x330MW Coal Fired Power Project, (Thar Engro power station) arranged by China Development Bank Corporation.
  • Facility agreement for the Sahiwal power station between Industrial and Commercial Bank of China Limited, Huaneng Shandong Electricity Limited and Shandong Ruyi Group
  • Cooperation agreement on Hubco power station between CPIH and Hubco Power Company.
  • Facilitation agreement on Salt Range coal-fired power project between CMEC and Punjab government.

Financing

According to South China Morning Post, Beijing does not plan to use either the Asian Infrastructure Investment Bank or its Silk Road Fund to finance the US$46 billion Pakistan-China economic corridor, with money to come from both countries instead.[42]}}

Coal Consumption

Proposed coal plants

For a current list of proposed coal projects in Pakistan, see Category:Proposed coal plants in Pakistan.

Jamshoro power generation station

In February 2014 Pakistan and the Asian Development Bank signed an agreement for $900 million ADB assistance for the 1200 MW Jamshoro power generation station, expected to be completed by the end of 2018.[43]

In August 2013, Prime Minister Nawaz Sharif announced plans for the Pakistan Power Park Company (PPPC), a US$14 billion proposal for the generation of 6,600 megawatts of electricity through 10 coal-powered plants in Gadani, Balochistan. The plants would use imported coal. Eviction notices under the colonial-era Land Acquisition Act of 1894 have reportedly gone out to the villages of Mauza Janobi Mawoli and Mauza Kund to make room for the PPPC.[44]

Port Qasim power station

In February 2013, it was reported that UAE-based Burj Power was developing the first phase of a 500 (4x125) megawatt (MW) power plant at Port Qasim, near Karachi in Pakistan. The first plant is scheduled to become operational by 2016. The entire station is projected to cost $700 million.[45]

Sindh power station

The Czech Republic firm Noel Corporation discussed plans to build a 400 MW coal power plant in Sindh, Pakistan with Sindh Chief Minister Syed Qaim Ali Shah in November 2012.[46]

Gadani Power Park

In August 2013, Prime Minister Nawaz Sharif announced plans for the Pakistan Power Park Company (PPPC), a US$14 billion proposal for the generation of 6,600 megawatts of electricity through 10 coal-powered plants in Gadani, Balochistan. The plants would use imported coal. Eviction notices under the colonial-era Land Acquisition Act of 1894 have reportedly gone out to the villages of Mauza Janobi Mawoli and Mauza Kund to make room for the PPPC.[47]

In January and March 2014 China Gezhouba Group Company (GGGC) and Pakistan's Private Power and Infrastructure Board (PPIB) signed two Memorada of Understanding for setting up four 660 MW coal plants at the Gadani Power Park in Gadani, Balochistan.[48]

Coal exports

The exports of petroleum and coal products increased by 38.59 per cent during the first quarter of 2011 as compared to the same period of 2010. The export of coal registered an increase of 347.22 per cent during period.[49]

Citizen Opposition

Environmentalists are now concerned that Pakistan has recently discovered 1 low and 4 low to medium quality coal seams in the Punjab and plans to re-flue its economically important cement industry with it after their oil fields have run dry due to heavy over use. Low sulfur coal was recently reported to have been found at the Baluchistan near Quetta as well. There are reports that a low-sulfur deposit has been found near Islamabad.

Articles and Resources

Sources

  1. ↑ 1.0 1.1 1.2 1.3 BGR Energy Study 2019 - Data and Developments in German and Global Energy Supplies (23), 200 p, Hannover, Germany
  2. ↑ Energy Resources: Coal, World Energy Council, Country Notes, 2013.
  3. ↑ Year Book 2005-2006 Ministry of Petroleum & Natural Resources Pakistan
  4. ↑ Pakistan Coal World Energy.Org
  5. ↑ Thar Coal Resources Ministry of Petroleum & Natural Resources Pakistan
  6. ↑ Pakistan Private Power and Infrastructure Board, "Pakistan Coal Power Generation Potential", National Electric Power Regulatory Authority website, 1 p., Accessed July 2021
  7. ↑ "Thar coal reserves can turn around Pakistani fortunes," Steel Guru, February 5, 2009
  8. ↑ Engr Abdul Waheed Bhutto,“Options for coal-based power projects” Dawn Media Group, November 23, 2009
  9. ↑ 9.0 9.1 9.2 "Centre to provide funds for Thar coalfield development" Dawn.com, May 14, 2011.
  10. ↑ “KESC & Oracle to set up Thar’s first coal power plant” Daily Regional Times, December 16, 2009
  11. ↑ Ibrahim Sajid Malick, " World Bank abandons coal project in Pakistan", Pakistan Headlines Examiner, May 16, 2010.
  12. ↑ "Sindh Engro coal project enters crucial phase" Jinah Se Quaid, date unknown.
  13. ↑ "Thar coal project to become operational by 2013: Dr Samar" Dawn.com, Nov. 25, 2011.
  14. ↑ "China to invest US $ 1.5 bn in Thar Coal" AP of Pakistan, Sep. 20, 2011.
  15. ↑ Worker Dies in Duki Coal Mine Accident, Steel Guru, Feb 11, 2019
  16. ↑ "Seven die, 41 trapped in coal mine accident" Gulf Times, March 21, 2011.
  17. ↑ "Pakistan mine gas explosion 'kills 52'" Guardian, March 21, 2011.
  18. ↑ "Bodies of dead miners recovered in Pakistan" BBC News, March 22, 2011.
  19. ↑ Mumtaz Alvi, "Govt ignores allocations for Thar Coal project" The News International, June 20, 2011.
  20. ↑ "Thar coal project to become operational by 2013: Dr Samar" Dawn.com, Nov. 25, 2011.
  21. ↑ uploader. "Associated Press Of Pakistan ( Pakistan's Premier NEWS Agency ) - Pak-China Economic Corridor to get high-speed railway track". app.com.pk.
  22. ↑ "Economic corridor: Chinese official sets record straight". The Express Tribune. 2 March 2015.
  23. ↑ "China's Xi Jinping Launches Investment Deal in Pakistan". Wall Street Journal. 21 April 2015. Retrieved 21 April 2015.
  24. ↑ "China's landmark investments in Pakistan". Express Tribune. 21 April 2015. Retrieved 21 April 2015.
  25. ↑ "China's Xi in Pakistan to cement huge infrastructure projects, submarine sales BY TOM HUSSAIN Read more here: http://www.mcclatchydc.com/2015/04/19/263699/chinas-xi-in-pakistan-to-cement.html#storylink=cpy". mcclatchydc. 22 April 2015. Retrieved 22 April 2015. {{cite news}}: External link in |title= (help)
  26. ↑ "Five areas where Pakistan will benefit from the China president, Xi Jinping's visit". Economic Times. 21 April 2015. Retrieved 21 April 2015.
  27. ↑ "China's new silk road: What's in it for Pakistan?". Dawn. 21 April 2015. Retrieved 21 April 2015.
  28. ↑ "MUCH OF INVESTMENT, $35 BILLION OF WHICH WILL GO TO ENERGY PROJECTS, WILL BE IN FORM OF DISCOUNTED LOANS". Newsweek Pakistan. 21 April 2015. Retrieved 21 April 2015.
  29. ↑ "Pakistan media hails Chinese investments as 'game-changer'". India Times. 21 April 2015. Retrieved 21 April 2015.
  30. ↑ "One-on-one meeting between Mamnoon Hussain and his Chinese counterpart was followed by delegation level talks". Radio Pakistan. 21 April 2015. Retrieved 21 April 2015.
  31. ↑ "What China's and Pakistan's special friendship means". Washington Post. 22 April 2015. Retrieved 22 April 2015.
  32. ↑ "What China's and Pakistan's special friendship means". Washington Post (blog). 21 Apr 2015.
  33. ↑ "China and Pakistan pave way for 'economic corridor'". South China Morning Post.
  34. ↑ "China, Pakistan to accelerate 'economic corridor' construction". pakistantoday.com.pk.
  35. ↑ Christopher Ernest Barber, The Diplomat. "The Pakistan-China Corridor". The Diplomat.
  36. ↑ "Pak-China Economic Corridor Secretariat inaugurated in Islamabad". The News International, Pakistan. 27 August 2013.
  37. ↑ "China commits $45.6 billion for economic corridor with Pakistan". Reuters.
  38. ↑ Shannon Tiezzi, The Diplomat. "China, Pakistan Flesh Out New 'Economic Corridor'". The Diplomat.
  39. ↑ "Details of agreements signed during Xi's visit to Pakistan". Dawn. 21 April 2015. Retrieved 21 April 2015.
  40. ↑ Amer Mahmood, "Pak, China tighten knot with 51 agreements, 13 projects," Pakistan Today, 22 April 2015
  41. ↑ "China gets 40-year rights at Pakistani port". thejakartapost.com.
  42. ↑ "US$46 billion Pakistan-China Corridor will not use Asian bank funds". South China Morning Post. 17 April 2015.
  43. ↑ "Accord today for $900m ADB assistance," Dawn.com, Feb 12, 2014.
  44. ↑ Fahim Khan, "Power Park: An ill-conceived project," Dawn.com, Sep. 28, 2013.
  45. ↑ Diarmaid Williams, "Burj Power to develop coal power in $700m deal," Power Engineering, Feb 22, 2013.
  46. ↑ Diarmaid Williams, "Czechs plan coal power plant in Pakistan," PEI, Dec. 12, 2012.
  47. ↑ Fahim Khan, "Power Park: An ill-conceived project," Dawn.com, Sep. 28, 2013.
  48. ↑ "Coal-based ventures: Chinese firm eyes up to four plants at Gadani Power Park," The Express Tribune, March 19, 2014
  49. ↑ "Exports of petroleum, coal surge" The Nation (Pakistan), October 27, 2011.

External resources

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