The world has become a better place as its countries capitalised on the opportunities they had from time to time. Pakistan, however, lags behind – not because it has dearth of opportunities, but because it always misses to capitalise upon the chances it gets. Coal is just one example of the countless missed opportunities.
The story of coal in India and Pakistan presents a stark contrast of development, albeit both countries had access to relatively inferior quality of coal when compared to countries like Australia, USA etc.
India, under the visionary leadership of the 1960s and 1970s, embarked on a path to harness its coal resources. Its leadership was determined to “find success in their own resources”.
Today, India stands as a major producer of coal, and utilises it extensively in energy production and petrochemicals. This foresight has paid dividends, positioning India as a key player in the global energy market.
In contrast, Pakistan’s journey with its Thar coal reserves tells a tale of squandered potential.
During the 1990s, Pakistan had a golden opportunity to develop its Thar coal fields. However, due to a lack of vision and persistent delays, billions of dollars were wasted. Pakistan’s bureaucracy was causing hurdles, wasting 20 years on its viability. It was only after a national agenda followed by political leadership that this hurdle was overcome in 2013-2023.
In comparison, Coal India was formed in 1975 and now it contributes 77% of India’s 1 billion tonnes of coal production.
In comparison, Pakistan is merely a single digit fraction of it and the first real project achieved financial close in 2016. The result – Indian energy sector is a major contributor of economic growth and exports while Pakistan’s energy sector is the biggest barrier for exporters and economic killer of the common man.
This pattern of missed opportunities is not new; the country has similarly faltered in capitalising on its copper mining potential and other industrialization. Reko Diq and Pakistan Steel are two examples best fit to explain this situation.
The Reko Diq project, located in the Chagai district of Balochistan, is one of the world’s largest copper and gold deposits. Instead of becoming a cornerstone of Pakistan’s economic development, it turned into a significant financial and legal debacle.
The trouble began in the early 2000s when Tethyan Copper Company (TCC), a joint venture between Barrick Gold Corporation of Canada and Antofagasta PLC of Chile, was granted a mining lease to develop the Reko Diq site.
However, in 2011, the Government of Balochistan refused to grant TCC the mining lease, citing various legal and procedural issues. This decision led to a protracted legal battle, with TCC taking the matter to the International Centre for Settlement of Investment Disputes (ICSID). In 2019, the ICSID ruled in favor of TCC, awarding the company $5.84 billion in damages, one of the largest arbitration awards ever.
This ruling was a significant blow to Pakistan, which was already grappling with economic challenges. Despite the setbacks, there is renewed hope for the Reko Diq project. In recent years, efforts have been made to resolve the legal issues and restart the project. We have only SIFC to thank for this.
Same is the story of Pakistan Steel’s privatization.
What could have produced millions of dollars for Pakistan in 2008 has caused national exchequer to lose billions of dollars. Pakistan’s industrialisation has drastically failed because our decision makers don’t follow a national agenda.
While other countries provide ample duty support for their industries to develop, the decision makers in the country start debating as to why we should industrialise if the country has to offer a nominal duty regime. The result is that we are mere traders of industrial products. From solar panels to petrochemicals, we import everything.
Every country has a story similar to Coal India. US has shale gas amongst thousand others, Bangladesh has garments, Saudi has oil, Brazil has corporate agriculture, Qatar has gas, and Vietnam has aquaculture.
Pakistan, on the contrary, has a lot of stories where we would sadly narrate a missed opportunity. Now let’s discuss in brief the historical and current perspective of those who stand in the of developing Thar.
While Thar was being developed and approved even in 2016, a lobby was working against it.
The same lobby that promoted imported coal and RLNG based power projects. The result being that in 8-10 years, the country has only 2,400 MW on Thar Coal, around 4,500 MWs on RLNG and 4,200 MWs on Imported Coal.
And this is the cause of the biggest problems today: firstly, the rising energy imports that are eating our precious and scarce dollars (making us a slave of IMF), and secondly, very high capacity payments because we can’t afford expensive LNG for power generation now.
Guess what, all of these plants remain dormant now. This is in addition to thousands of oil based power plants that country developed between 2002 and 2010.
Thar coal, however, offers a glimmer of hope still. Thar coal stands as the country’s cheapest thermal energy source. In a time of skyrocketing energy costs, utilising Thar’s coal reserves could offer much needed relief to Pakistan’s beleaguered economy.
The alternatives—imported fuels and expensive energy projects—are unsustainable. Pakistan’s energy future depends on maximizing the use of its domestic resources, particularly Thar coal and renewable energy sources like hydroelectric power.
The country’s revival strategy should be based on the resources it already has, not the ones it wishes to have.
Thar coal and hydropower are two key pillars that must be prioritized if Pakistan hopes to overcome its energy crisis and lay a solid foundation for future economic growth. Instead of continuing to miss critical opportunities, Pakistan must now seize the moment, harness its natural and human resources, and ensure a brighter future for generations to come.
Only through a unified national strategy—free from the influence of vested interests—can Pakistan fully tap into its potential.
The time for unwarranted delay and missed chances is over. It’s time to focus on building a future with the resources we possess, rather than chasing after those we don’t. As a wise leader once said, “you go to war with the army you have, not the army you want”, it is time that we look what we have and then get determined to reap its benefit for our people.
The article does not necessarily reflect the opinion of Business Recorder or its owners
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