KARACHI: The mining process of Phase III of the Thar Coal Mine Block II is in jeopardy as critical equipment and parts stalled at the ports due to Letter of Credits (LCs) issues.
Industry sources said that the operations of the mine II can also completely halt due to further LCs delays.
Moreover, the delay in the release of spare parts and machinery will also adversely impact the Phase III and Phase IV coal mine expansion, which can provide cheap coal for use in key sectors of the economy like power, cement, and steel as well.
Sources said that the Fuel Cost Adjustment (FCA) for the month of March awaits approval by the Nepra which will announce the rate after the public hearing Thursday (May 4).
With the advent of summer, consumers across the country expect long hours of load shedding and power woes overall. The reduction in the rate is crucial because of the inflationary pressure already drowning the common man.
With the upcoming summer season, electricity demand from consumers is expected to increase, making it crucial to have reliable and cost-effective sources of power generation.
The cost per unit of energy generated from Thar Coal remains around Rs 7 to 9 per kWh during FY 2021-2022, making it one of the cheapest baseload fuels available locally. Comparatively, power generation from plants using imported fuel coal costs around Rs 35 per kWh. Thus, Thar Coal is critical in providing affordable electricity to the country.
The production output of the mine in Block II has increased from 3.8 MTPA to 7.6 MTPA allowing for an additional 660 MW of power generation to the national grid, helping to counter the current energy crisis.
Sources said that the phase III expansion of Thar Block II will further reduce coal price significantly and boost its affordability as a fuel source. Furthermore, the expansion has the potential to save the country's forex reserves approximately $1.2 billion annually.
With approximately 15 percent of the electricity generated in Pakistan is via Thar Coal Block I and II combined and millions of dollars being saved in forex reserves every month by reducing oil import. This game changer project is essential for making Pakistan energy secure in the long run.
Copyright Business Recorder, 2023
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