Recently, the expression of interest for consultancy services were invited by the ministry of petroleum and natural resources for formulating national coal policy. Included in selected consultative firms are proposals for making Pakistan competitively attractive for investment in coal mining though viable fiscal package of income tax, royalty, custom duty rates etc

The firms would also be required to design a viable layout for coordination between federal and provincial governments/institutions keeping in view the requirements of 1973 Constitution. .

While the move to evolve the national coal policy is a welcome step, it should preferably have been initiated soon after the discovery of Thar coal deposits, if not earlier. The urgency for such a policy would be appreciated better if we look at our fossil fuel energy resources and national supply and demand gap.

Geological investigations have shown 185 billion tonnes of measured coal reserves in zone 2, 3, & 5 of which more than 184 billion tonnes deposits are located in Sindh, with Thar coal field being the largest, followed by Thatta-Sonda, Lakhra and Jhimpir. The coal is lignite to lignite-A to sub-bituminous B&C in character with an average heating value of 6000 BTU/lb.

Thar coal deposits warrant investment for use of coal in power generation and preparation of clean fuel products. Pre-feasibilities reports have already been prepared by the Chinese and German experts and the Sindh government has signed a number of memoranda of understanding (MOUs) with the prospective investors. Already, a power plant of 150 MW capacity using Lakhra coal is in operation in Sindh.

Coal-related projects included in PSDP 2006-2007 comprised: (i) systematic evaluation and appraisal of coal specific tracts in Thar; (ii) assessment of coal potential of Ghazij Basin in Balochistan; (iii) exploration of Hangu and Karak coal deposit, NWFP; (iv) exploration for Coal in Kotli area, AJ&K; (v) feasibility study on gasification of Thar Coal, district Tharparkar, and (vi) feasibility study on coal gasification plant at Bhakkar. Coal briquettes could also find a ready market in domestic sector. There is need to expedite work on these projects.

Looking at the prevailing economic conditions in the country, there is no time to lose for the development of a national coal policy and making it operational.

While formulating the national coal policy, the petroleum ministry may bring all stakeholders/provincial governments on board and exchange views on different aspects, without waiting for the appointment of consultants.

This would allow more time for consideration of important matters and possibly in arriving at a consensus. Consultants/firms when appointed may possibly visit all provinces and other stakeholders to collect any remaining baseline information and to give final touches to the design of a viable layout for coordination between federal and provincial governments/institutions keeping in view the requirements of 1973 Constitution. The provincial governments might also up-date and finalise their positions on relevant issues.

The respective federal and provincial ministries/departments were supposed to undertake necessary administrative measures and amendments to relevant mining and fiscal laws to give full effect to the provisions of the policy. They may take an objective review of the measures already taken and the progress made in the formalisation of the policy. These developments may be posted on the ministry’s website for information. For convenience of the interested consultants/firms the procedure for the selection may also be posted on the website.

It is not clear whether the consultants would be local or foreign or both. Association of local consultants may be made a must in case the foreign consultants are finally considered for the assignment for improved outcomes.

The consultants are required to suggest methodology to enhance coal production from the existing proven coal reserves and setting up of down stream coal mining industry by adoption/utilisation of latest technology. Looking at the progress being made for exploitation of Thar coal- the major coal deposit- for various power generation projects, it is expected that mining methods and technology would be already decided for a number of coal concessions before the consultants are appointed for the proposed policy. This may have lessons for the proposed policy work.

A specific item on the scope of services of the consultants may be added as to how mining companies can have better access to the bank credit considered essential for mechanising and modernising of mining operations.