Recently the Small and Medium Enterprises Authority (SMEDA) Balochistan held a seminar on ‘Need for a Coal Washing Plant’ in Quetta. The participants were of the view that there was an urgent need to set up coal-washing plants to meet the demand of coal of specific standard for the cement industry.
Current estimates are that requirement of foreign coal for the consumption in Pakistan’s cement industry may increase to three million tons in the next three years in view of the rising number of cement makers switching over to coal from fuel oil. According to an estimate, the cement industry utilized one million tons of imported coal worth $35 million this year despite the availability of indigenous coal at much cheaper rates. This coal was imported from South Africa and Indonesia.
While the imported coal is being sold at Rs3,150 to Rs3,500 per ton, local coal is available at Rs1300 to Rs2500 per ton.
Local production of coal is estimated at three million tons out of which over 80 percent is being utilized by brick kilns, while the rest is being consumed by cement plants in blending it with the imported coal to reduce the cost of production. About one percent of local coal is utilized by power stations.
The increasing dependence of cement plants on imported coal necessitates the establishment of coal washing plants to produce coal of specific standard meeting the requirements of cement plants.
Raw coal contains different impurities like sulphur, calcite, clay, rock and shale. This impure coal cannot be utilized in cement industry hence impurities must be washed out. Coal wishing plant is the answer to reduce the import of coal and save around $240 million through a cut in cost of furnace oil imports. According to an estimate cement industry requires around 3.5 million tons of coal. The coal washing plant would provide clean coal with less impurities reducing the production cost of cement industry.
The local coal lacks the capability of producing required level of heats and has higher level of sulphur contents as compared to the imported coal. The switch-over to coal has benefited some cement manufacturers. The price decline of Rs.180-185 per 50 kg bag from Rs210-225 has resulted in higher sales to 5.5 millions tons in July-December 2002 as compared to 4.7 million tons during the same period of 2001.
Coal is the cheapest source of thermal energy used in industrial sector. It has the potential to replace other expensive fuels such as furnace oil. In this regard, the first sector, which is in the process of switching over from oil to coal, is the cement industry. Balochistan possesses huge reserves of coal. The estimated reserves of all coal fields in the province are 196m tons. Presently about 1.5m tons of coal is being mined from the coal fields of Balochistan.
It is worth mentioning that the cement sector is in crisis due to excess capacity, heavy government taxes, stagnant demand and mounting cost of fuel oil.
Use of coal instead of furnace oil would result in a saving of nearly Rs495 million per year for a plant producing 3000 tons of cement per day. The furnace oil consumed in producing one ton of cement would cost Rs924 while coal would cost nearly Rs374.
In terms of dollar the national exchequer would save $170 million if the cement sector runs on 100 per cent capacity.At the present rate of 63 per cent production the saving would be about $100 million a year.
In Pakistan at present there is no facility of washing coal. That’s why cement industry is obliged to import coal.If clean coal becomes available it may also be used in the furnaces of the Pakistan Steel Mill and in other industries for heating purposes.The government should facilitate granting of loans to mine owners and other investors for establishing coal washing plants.
Recently the Small and Medium Enterprises Authority (SMEDA) Balochistan held a seminar on ‘Need for a Coal Washing Plant’ in Quetta. The participants were of the view that there was an urgent need to set up coal-washing plants to meet the demand of coal of specific standard for the cement industry.
