At the optimum mine capacity of 4,000MW, power produced from Thar coal can yield a tariff of approximately Rs6 per unit. This is the cheapest among the options currently available, as compared to residual fuel oil or imported coal.
The Sindh Engro Coal Mining Company (SECMC), a joint venture between the Sindh government and Engro Corporation, has been working on the project for the past 4-5years. Engro, as manager of the project, has been working on the technical and commercial aspects, whereas the Sindh government is developing the requisite infrastructure for the project. As the developer of Thar Block II, SECMC plans to expand the mine in phases and reach a sustainable capacity of coal output for the production of 4,000MW in 10 years, which will remain available for the next 50 years.
The first phase of the project envisages mining 3.8m tonnes of coal per annum, to be utilised by a mine-mouth power plant of 660MW. The total investment for the integrated project is estimated to be $1.8bn.
The company has achieved substantial progress on the mining and power projects. An internationally reputed Chinese EPC engineering, procurement and construction (EPC) contractor has been selected, and the term sheets signed. EPC contracts will be finalised within weeks. Six thousand acres of land has been acquired for which no resettlement is required. Work for the 113m cubic metre overburden removal in Thar Block II was started with a local contractor on April 30. Use of a local contractor will help expedite the work before the Chinese EPC contractors are mobilised.
The ground breaking of the project was jointly performed by Prime Minister Main Muhammad Nawaz Sharif and former President Asif Zardari in late January. The presence of both gentlemen greatly enhanced the project’s profile. The project has been declared as one of national significance by the prime minister, and assured full support of the government.
The development of a regulatory and pricing regime for Thar coal is also underway, and the reference coal tariff for Thar coal is expected to be announced as early as next month. Nepra has already announced acceptable power tariff for Thar coal-based power generation.
The Government of Sindh, on the other hand, as the joint venture partner and a developer of Thar, has been diligently working on the necessary infrastructure development. Thar is the most viable power generation option for Pakistan. Development of indigenous Thar coal reserves will not only address the severe power shortage crisis in medium to long term, but also bring energy security to the country.
Excerpts from an overview report by the CEO of the Sindh Engro Coal Mining Company
