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January 8, 2019

Pakistan’s coal imports to surge to 30 million tons per annum by 2020

Business

January 8, 2019

KARACHI: Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the planned expansion of cement manufacturers and coal-based power plants scheduled to come online in a couple of years, Shariq Siddiqui, CEO of Pakistan International Bulk Terminal (PIBT) said.

Talking to The News on Monday, Siddiqui said around 8.0 million tons of coal was imported by cement companies every year, while 12 million tons was imported by power plants including Sahiwal Power Plant and Port Qasim power plants.

The demand by cement manufacturers was estimated to increase by 2.0 million tons, while 8.0 million tons would be required by coal-based power plants by 2020.

“PIBT is the only dirty bulk cargo terminal with state-of-the-art mechanised system having capacity to handle 12 million tons/annum. As the imports surge, we would go for expansion,” Siddiqui said.

The Supreme Court of Pakistan (SCP) in July 2017 imposed a complete ban on coal handling at Karachi Port, and ever since, PIBT was the only terminal handling commercial imports of coal. The power plants have their own coal-import jetties.

“PIBT started operations in July 2017, and has so far running in operational losses. However, planned expansion in the wake of rising demand would help the company’s balance sheet,” Siddiqui added.

Talking about the terminal operations, Siddiqui said, “PIBT empties a 60,000 tons vessel in 30 hours, which used to take around seven days at Karachi Port, thus saving demurrages to shipping line and the importer. Moreover, the mechanised system avoids pilferage and environment hazards.”

He said a proposal had been forwarded to the Ministry of Railways for laying four kilometre train tracks connecting PIBT to Juma goth junction, which, he added would facilitate coal transportation a lot.

It is worth noting that a vessel has to pay demurrage to the tune of $14,000/day at Karachi Port and this expense is borne as per the arrangement between the importer and the shipping company.

An importer said about 60 percent of the coal imported was transported to cement manufacturers in the northern region, and shifting of coal handling from Karachi Port to Port Qasim eased this transportation.

Coal handling at Port Qasim also generates revenue for the government, as a royalty of $2.27/ton is imposed by the Port Qasim Authority (PQA), which was absent at Karachi Port.

Shariq Siddiqui suggested that clinker export handling should also be banned at Karachi Port as this commodity was even more hazardous for environment and human health than coal.

“Switching of coal handling from Karachi Port has improved environment in Karachi and switching of clinker handling would have even better impact,” he added.

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