Thar coal: Pakistan’s only hope for energy security

December 06, 2023

KARACHI: With the country's import deficit growing, it is clear that we must look for local sources of production. Otherwise, the import bill will continue to drain our limited dollar reserves. With gas sources depleting and a rising population, exploring and promoting local energy sources is mandatory.

The famous proverb states, "We go to war with the army we have, not the army we want." We must consider what resources this country offers. Thar coal, along with hydro and solar power, is the only indigenous resource. For decades, Pakistan has relied on local gas, and such reliance is now absolutely crucial for the nation's survival. We import RLNG at 12-13 US$ per MMBtu, yet we hesitate to mine our own coal, which would cost 2-4 US$ per MMBtu. This is illogical.

The image shows the Thar Block-1 Integrated Coal Mine Power Project. — APP File

The energy import bill currently stands at 26 billion US$ and is projected to rise to 41 billion US$ (even without increasing energy consumption) due to gas depletion, necessitating the import of more LPG and LNG. Additionally, the demand for electrification is rising, and baseload power must be added. Without baseload power, the entire industrialization process will fail. We need energy sources that can provide electricity when the sun is down and in areas where wind or run-of-river hydro projects are not feasible. Thar coal is the only solution. With electricity, we can replace oil, which already accounts for a 20 billion US$ import bill and is projected to double according to government documents.

Speaking to The News, Abdur Rahim, CEO of Siddiqsons Limited, said, "We are very competitive and the only source of baseload energy projects in IGCEP. With so many IPPs expiring, where would the government find the baseload? – Thar coal is the answer for all upcoming baseload plants. We need electricity to replace gas in a manner that reduces the import bill, and a substantial number of projects will be required. We will ensure our success and restore foreign investor confidence in Thar Coal. It is the responsibility of all of us to make this dream come true."

This has become a critical need, and the timing is such that investors are less willing to invest due to limited funding. However, some local investors are still keen to participate. They actively promote Thar coal as long as the government provides them with the necessary support. Siddiqsons Energy has an active project that has been working on a Thar coal-based project. The project has secured funding and EPC, the two crucial elements ensuring project completion. The group is confident in Thar coal and looks forward to completing the project, paving the way for a multitude of other local investors to contribute to national development.