ISLAMABAD, March 10: The government has decided to enhance the share of coal in overall energy mix from 7 per cent to 20 per cent for generating additional 20,000 megawatts of electricity in next 20 years.
According to the official sources the objective was to restrict the unfavourable impact of high cost of imported energy to the national economy and improve the energy supply by developing coal as strategic national asset in line with the Energy Security Plan.
However, they admitted that it was becoming difficult for the government to attract foreign investment in the coal mining sector due to countless problems including inadequate institutional arrangements, no focus for coal development and harsh climate conditions.
“No real success has so far been achieved to attract sizable investment in the coal mining despite offering adequate incentives to the investors,” an official said. Law and order problem, he said was also one of the main reasons while perhaps more fiscal incentives need to be offered to the international companies for effectively developing coal industry in Pakistan, he said.
The ministry of petroleum and natural resources has informed the higher authorities that large capital was required to have any integrated coal and mining and power generation programme to remove the growing power crisis in the country.
It said that there was no industrial support services existed and that there was also a need for clean coal technologies and developed human resource base to attract investment in the mining field.
The ministry conceded that Pakistan had no mechanised coal mining and that the human resources were needed to be developed within the country to harness the coal reserves of 175 billion tons in Thar subsequently.
Considering various problems, the federal government and the Sindh government have agreed to jointly establish Thar Coal Mining Company to develop coal as “strategic national asset”.
Sindh is expected to receive a large sum as royalty from coal beside inexpensive electricity by attracting foreign investment in coal mining through the proposed mining company.
One of the major objectives of establishing the company was to encourage Independent Power Producers to plan commissioning of power plants on Thar coal.
The ministry of petroleum and natural resources and the government of Sindh will be the equity holder partner of the proposed company.
The plan is to produce and market the planned quantity of coal and coal products efficiently and economically with due regard to safety, conservation and quality.
The main thrust of the company will be making its operations as per market requirements besides maintaining at the same time financial viability to meet the resource need. Also, the company will develop available cost efficient clean coal technologies for harnessing Thar coal for other utilisation option like liquefaction, co-generation and extraction of high unit value chemicals.
It will develop an open cast mine on an evaluated coal Blocks at Thar having capacity of minimum 6 million tons annually for supply to 1,000-mw power plants.
The geopolitical events of new millennium, sources said, highlight the fragility of the world’s energy supply system and volatility of prices. Ever-increasing crude oil prices have constrained the world at large to develop their indigenous energy resources for energy security.
Sources said that Pakistan has witnessed an accelerating development during the last few years. However, its power growth could not commensurate with the development of other sectors.