THE view from the edge of the open pit coal mine in Islamkot is both awe-inspiring and frightening.

Located about 360 kilometres from Karachi, the hole in the ground is so deep that at least two Habib Bank plazas, stacked vertically on top of one another, can easily fit inside it.

From this height, the massive earth-moving machinery crawling along the bed of the mine looks more like toy cars, and the men operating them appear as mere specks on the dusty Thar landscape.

Standing at the edge of this yawning crater, one can’t help but be overwhelmed - if only for a brief moment. To think that those tiny specks in the distance are the workers who have carved out this hole, which dominates the landscape of this area.

It puts you in mind of man’s ability to irreversibly damage the complex and highly fragile natural order of things, and today there is little doubt the environmental consequences of mining and burning coal will continue to prevail long after anyone alive today is gone.

Yet the country is charging ahead full steam when it comes to the use of coal.

“I have no doubt that coal is the dirtiest form of fuel,” says Ahmad Muneeb, general manager at Sindh Engro Coal Mining Company (SECMC), speaking to a group of Karachi-based journalists on a recent visit to the mine.

“But our footprint in global carbon emissions is too tiny compared with that of Germany or China.”

SECMC has been mining 3.8 million tonnes of coal every year since 2019. It sells its entire output to Engro Powergen Thar Ltd (EPTL), the country’s only indigenous coal-based 660-megawatt power plant located next to the mine.

Engro Energy Ltd owns 50.1 per cent shares in EPTL while its shareholding in SECMC is 11.9pc. The Sindh government controls the majority stake (54.7pc) in the mining company.

SECMC expects to double the mine’s output to 7.6m tonnes per annum by June. The mine’s expansion under the ongoing second phase will coincide with the commissioning of a 330-megawatt power plant by Thar Energy Ltd, whose majority ownership is with The Hub Power Company (Hubco).

Another Hubco-sponsored power plant of 330MW, ThalNova Power Thar Ltd, will be commissioned immediately afterwards. Its commissioning will ensure 100pc consumption of the enhanced output of SECMC’s mine.

With its third-phase expansion by June 2023, its output will increase to 12.2m tonnes per year. The increased mining will supply fuel to the 660MW power plant that the Lucky Group is building at Port Qasim.

Yet these expansion plans – however large in scope – constitute only a fraction of the country’s overall coal mining ambitions.

The Thar coal field measuring 9,100 square-kilometres has been divided into as many as 13 blocks. SECMC operates in Block II only, which has an area of just 96 square-kilometres.

“Thar coal’s mineable potential is 50 billion tonnes of oil equivalent, which is higher than Saudi Arabian and Iranian oil reserves,” says Mr Muneeb.

Claiming great virtue in his profit-conscious enterprise, he said mining indigenous coal has resulted in import bill savings of $210m since July 2019.

In a recent interview with Dawn, Engro Energy Ltd CEO Ahsan Zafar Syed said the price of Thar coal wasn’t pegged to the international market. SECMC earns an internal rate of return or IRR of 20pc above the project cost. The price of indigenous coal, therefore, is currently $61 per tonne, which is less than one-third of the rate prevailing in the international market.

Thar coal’s price will come down to $42 per tonne upon the completion of the ongoing second phase and will drop further to $27 per tonne when the third phase is completed.

The share of local and imported coal in the country’s total power generation last month was more than 33pc, highest among all fuel sources. “Thar coal has already proved its high economic value,” Mr Muneeb says.

In his words, India set up coal-based power plants of more than 8,000MW on its side of the border a long time back, but it has now exhausted whatever little deposits it could access under its ground. “India could be a suitable export market for Thar coal if the government decides to sell the indigenous resource to its neighbouring country,” he said.

Published in Dawn, February 24th, 2022