Coal demand expected to spike in 2021

Published January 30, 2021
A coal merchant shovels coal at a coal yard. — Reuters/File
A coal merchant shovels coal at a coal yard. — Reuters/File

KARACHI: Coal demand is expected to remain upbeat in 2021 as more coal-fired and captive power plants are coming up in the current year.

According to sources, the import of coal at three coal-based power plants – China Hubco, Sahiwal and Port Qasim Electric — is around 10-12 million tonnes per annum.

According to Nepra, the contribution of coal to the country’s energy mix was a staggering 21 per cent in CY20.

The cement sector is also expanding its capacity to cope with the rising demand under Prime Minister’s Naya Pakistan Housing Scheme, the sources added.

A cement manufacturer and exporter anticipated 30-40 per cent hike in coal demand in 2021 from the current volume of over 20 million tonnes as demand for cement increased, followed by the start of new coal-based power plants by leading business groups in the country.

Talking to Dawn, Pakistan International Bulk Terminal Limited (PIBT) CFO Arsalan Iftikhar Khan said the coal volume imported at the facility rose to 9.496m tonnes in 2020 from 8.994m tonnes in 2019.

Nepra estimates that one-fifth of electricity generated last year was from coal

He said that the final figure of the volume of coal imports in January 2021 — estimated to be between 700,000 and 800,000 tonnes — will be available in February.

Out of the coal handled by PIBTL, approximately 55pc is imported by the cement industry, 20pc by power plants and 25pc by textile, rubber and other such industries that use coal as a fuel, Mr Khan said.

The CFO recalled that PIBTL handled a record 1.04m tonnes of coal cargo in Dec 2020 — 32pc more than the 0.791m tonnes handled in Dec 2019. This was the first month that the terminal volumes had crossed a million tonnes — solidly establishing PIBT as the premier bulk terminal of the country, he added.

PIBTL is the first state-of-the-art and fully mechanised bulk handling facility at Port Qasim for coal, clinker, and cement cargo. It was set up on Build-Operate-Transfer (BOT) basis with an investment of $300m and was fully operational in mid-2017, the CFO added.

The shifting of coal handling from Karachi Port Trust to Port Qasim — under the orders of the Supreme Court in June 2018 over environmental challenges associated with handling of coal — has greatly benefited the national economy as approximately 35pc of PIBTL’s revenue goes to the Port Qasim Authority in terms of royalty payments, Mr Khan added.

Meanwhile, Lucky Cement Limited (LCL), in its financial results for the half year ended Dec 31, 2020, predicted a slight delay in commercial operation of 660MW coal-based power plant. LCL said that the project may now achieve its commercial operation by the middle of first quarter FY2022 as compared to March 1, 2021.

Published in Dawn, January 30th, 2021

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