KARACHI: Sindh Engro Coal Mining Company (SECMC) said on Monday its board has approved the expansion of its Thar coal Block II mine to 12.2 million tonnes per annum. According to a spokesperson for Engro Energy, which is a shareholder in SECMC, this expansion will reduce the coal price from $60 per tonne to $27 per tonne.

At $27 per tonne, Block II coal will become the cheapest fuel source in the country once the company completes the expansion by June 2023.

“It will enable Pakistan to save $420m per annum on account of foreign exchange. Additionally, this expansion of SECMC’s Block II mine will lead to a reduction of Rs74 billion in the circular debt on an annual basis,” a press release said.

International coal prices recently crossed an all-time high of about $250 per tonne. The statement said the expansion offers a hedge against the volatility in coal’s international prices besides reducing the pressure on the current account deficit. “It’s our firm belief that at the price point of $27 per tonne, Thar coal will transcend its current utilisation in the energy sector to other uses,” it added.

The cost of the expansion project is $93m, which will enable Thar Block II to achieve a sustainable supply of 12.2m tonnes annually over the next 30 years.

SECMC currently has an annual production of 3.8m tonnes, which is used for the generation of 660 megawatt electricity since the start of its operation in 2019.

In its second phase, which is already under development and expected to be over by mid-2022, SECMC’s production will increase to 7.6m tonnes per annum. This will enable cumulative power generation of 1,320MW.

Published in Dawn, November 2nd, 2021