Thar coal mines to boost output by 23 percent after tariff approval

KARACHI: The Thar Coal Energy Board has approved levelised tariffs for two mines operating in Thar coalfields to scale up their output to 19 million tonnes per annum from currently 15.4 million tonnes per annum, a statement said on Tuesday.

The board approved a levelised tariff of $37.36 per tonne for a financial close stage petition for 7.8 million tonnes per annum of the Block-I, which is operated by Shanghai Electric. It also approved a levelised tariff of $30.40 per tonne for a contract stage petition for 11.2 million tonnes per annum of the Block-II, which is operated by Sindh Engro Coal Mining Company.

The approvals were given in the board’s 25th meeting, chaired by Sindh Chief Minister Syed Murad Ali Shah.

The meeting, held at CM House, was attended by Federal Planning Minister Ahsan Iqbal (through video link) Energy Minister Imtiaz Sheikh, Minister Mines & Mineral Shabbir Bijara, Minister Education Sardar Shah, Advisor Law Murtaza Wahab, Secretary Energy Abubakr Madani, MD Thar Coal Energy Board Khadim Hussain Channa, and other concerned officers.

Imtiaz Shaikh briefed the chief minister regarding the progress of SECMC and SSRL mines operating in Thar coalfields.

“The mines are currently producing 15.4 million tonnes of coal per annum and are being primed to scale up to 19 million tonnes per annum over the next eighteen months,” Imtiaz Shaikh said.

The coal being produced from the mines is powering 2640 megawatts of electricity, energising more than seven million households from Thar coalfields.

Power generated from the the coalfields also has one of the lowest costs of power generation in the country, Shaikh said.

During the meeting, the management of Thar Coal Energy Board also briefed the board regarding the financial close stage petition for extraction of 7.8 million tonnes per annum for the Block-I and the contract stage petition for extraction of 11.2 million tonnes per annum for the Block-II.

It was highlighted that as the mines continued to scale up, the overall cost of production would decline largely due to the mines attaining economies of scale. The coal tariff is expected to reduce further, which will result in a reduction in electricity generation tariff from mine-mouth power plants located on Thar coalfields.

The board also considered a proposal for making Thar coal available for non-power uses, and enabled a framework that would allow the existing, and any potential mining players to create an active market for Thar coal, effectively enabling sales to various other industries, and not restricting the same to power uses only.