ISLAMABAD, Jan 3: The federal government has directed coal miners to reduce their prices immediately to contain its import.
Official sources told Dawn that coal prices had doubled during the last six months and went up from Rs1,200 per ton in June to Rs2,400 per ton in December. These have, however, come down to Rs1,800 per ton last week.
Total annual coal production stands at around 3.5 to 4 million tons and mostly used in cement and brick industry. Imported coal is mainly utilized by Pakistan Steel. Its consumption is around 5 million tons per annum.
Official sources said that Finance Minister Shaukat Aziz presided over a meeting on the subject early this week to develop the coal industry that asked miners to finalize long term agreements with cement industry for smooth supply and payments. The prices had increased following government directive to converting cement plant on coal.
The meeting, attended by secretary petroleum, coal miners and provincial authorities, was primarily of the opinion that provincial governments were not serious in the development of indigenous resources like coal.
The provincial governments were asked to develop infrastructure like roads, electricity, etc., to enhance coal production and cost effective utilization instead of just collecting royalty from the existing mines. “If this is not done there would be no end to import of coal,” secretary petroleum was quoted as saying.
The meeting was told that South African coal was available at $37.50 per ton in Karachi, Indonesian coal at $30, Chinese at $39, Indian at $5 to $29. Compared to this, ex-mine price of coal in Balochistan was $31 per ton, Lakhra coal $12, Makarwal coal $29 and Quetta coal $34 per ton.
In this situation, there were apprehensions that cement and brick manufacturers would be left with no option other than imported coal.
The meeting was told that if all the 23 cement factories were fully converted to coal, another 2.5 million coal would be required. At present, the managements of Fauji Foundation and Askari Cement had placed orders for the import of machinery for conversion to coal under directives from the chief executive, the sources said.
