THE Thar coalfields have been declared Special Economic Zone, and unprecedented package of incentives, concessions and protections have been offered for investment.

A large number of investors including global key players in coal mining and power generation have shown repeated interest in developing projects based on Thar coal. But no physical progress on project sites is yet visible.

A part of the requisite infrastructure, like road network, telecommunications and housing, has been developed, whereas work on the other schemes, including 500-kv transmission and water supply, is in progress. Yet, Pakistan has not been able to utilise Thar coal even after two decades of its discovery.

The Thar coalfields, spreading over 9,600 square kilometers and with assessed reserves of 175 billion tons, were discovered in 1992, placing Pakistan as world’s 7th leading country for coal resources and top country for lignite (brown coal) deposits.

By the year 2001, four specific blocks (I, II, III and IV) of the coalfields measuring 356 square kilometres were developed that measured proven reserves of 2,800 million tons of lignite, confirming mineable quantity of at least 1,680 million tons. This volume of lignite will be sufficient to cater to fuel four power plants, each of 1,000-MW, for 30 years of project life.

Meanwhile, by 2002, the Sindh government had developed another four blocks V, VI, VII and VIII. At this critical juncture, a row developed between the federal and Sindh governments on the administrative control of the blocks.

Finally, the Thar coal project was handed over to the province. In recent years, the Sindh Coal Authority has developed additional three blocks, VIII, IX and X.

Currently, there are five on-going commercial projects. Block-I has been allocated to the Global Mining Company of China. A public-private JV Sindh Engro Coal Mining Co is developing Block-II, whereas Block-III is with Pakistani subsidiary of Cougar Energy, UK. Block-IV has been allocated to China Three Gorges Corporation. Block-VI is being developed by Oracle Coalfields, UK. Unfortunately, work on all these projects is progressing very slowly, and none has reached the implementation stage.

The Sindh Engro Coal Mining was scheduled to commence construction of mine of 6.5 million tons annual capacity by June 2012, but could not achieve the target and is now rescheduled for January 2013. Consequently, commissioning of 1,200MW power plant is expected in July 2016.

The project costing $3.5 billion would achieve financial close by first quarter of 2013. Bankable feasibility study has been completed having determined techno-economic parameters for developing a coalmine using open-cast technology.

The Sindh Carbon Energy/Oracle Coalfields had plans to start mine construction during early 2013 and to commence coal extraction by second quarter 2014.

But it would be delayed as a bankable feasibility study has not been prepared. Coal exploration and development licence was granted in November 2007 but project could not be implemented within three years validity of the licence.

However, mine lease was granted for developing mine for extraction of five million tons of lignite annually. A technical study prepared in February 2012 has confirmed proven coal reserves and suitability of open-cast mining systems. It has signed an agreement with the KESC in June 2012 to jointly develop a 300MW mine-mouth power plant by 2015.

Block-V has been allocated to Pepco where the controversial pilot project of 2x50MW using underground coal gasification (UCG) technology is in progress. In fact, UCG is a very questionable technology and certainly not applicable to Thar coal.

Technology, which is still in experimental stage, is used to access coal resources that are either uneconomical by conventional open-cast or underground coal mining methods or are inaccessible due to depth, geology or other mining considerations.

Cougar Energy had obtained lease of Block-III with commitment to commence construction of UCG-technology-based project in 2013-14.

There has been no activity on project since long and it appears that project has been abandoned. Exploration licence was awarded on September 16, 2009. Preliminary feasibility report was to be prepared by 2010-11 and final feasibility study this year. These milestones have not been achieved, however.

Reportedly, Cougar’s first pilot UCG project in Kingaroy, Queensland (Australia), was permanently shut down by the Queensland state government in July 2011 subsequent to blockage and rupture of a gas extraction well in the preceding year.

There were charges of breach of environmental rules linked to release of toxic chemicals into groundwater. Cougar has gone into litigation. Global Mining Co and Sino Sindh Resources plan to develop mine of five million tons annually to fuel proposed 900-MW power plant. RWE Power International of Germany has earlier conducted mining feasibility study at Block-I. Coal extraction is scheduled in 2014.

The government, however, needs to take special initiatives for speedy implementation of the projects in the pipeline.

Engr Hussain Ahmad Siddiqui is ex-chairman of State Engineering Corporation.