By Syed Fazl-e-Haider
Balochistan plans to set up a coal-fired power plant of 50 megawatts to overcome power shortage in the province. Last week, the provincial government signed a memorandum of understanding (MoU) with a Canadian firm for undertaking the project by utilising locally extracted coal.
Under the deal, Balochistan Power Generation Limited (BPG) and Canadian Everlight Energy Corporation (EEC) would prepare project feasibility and submit it to provincial Thermal Power Board for approval. The Board would settle matters relating to tariff and supply of electricity between Quetta Electric Supply Company (QESCO) and these companies. The companies would be bound to spend five per cent of their total revenue on development of social sector in the areas where they supply power.
Pakistan Steel Mills Corporation (PSMC) also plans to purchase 60,000 tons of coal during the current financial year from the province. The PSMC chairman recently visited Balochistan and found the coal of good quality that fulfils the Pakistan Steel criteria.
The coal can be used for power generation and in different industries.
The coal reserves in the province are estimated at 196 million tons. Presently about 1.5 million tons are being mined from the various fields. The 60km-long Chamalang mines produce good quality coal that ranges from high volatile C bituminous to high Volatile A bituminous with a total reserves of six million tons.
Presently, over 80 per cent of the local production of coal is being used by bricks makers, while the rest is being consumed by cement factories to blend it with the imported coal to reduce the cost of production. About one per cent coal is utilised by coal-based power plants.
There is no facility of washing plant, and that’s why cement industry is forced to import coal. There is vast scope for investment in coal-washing plants. Raw coal contains different impurities like sulphur, calcite, clay, rock and shale. This impure coal cannot be utilised in the industry hence impurities must be washed out. For saving energy and cost, there is a need to set up coal washing plants in the province.
A few years back, Small and Medium Enterprise Authority (Smeda) Balochistan proposed that coal-washing plants should be set up to meet specific standard of the cement industry. Coal is the cheapest source of thermal energy used in industrial sector. It has the potential to replace other expensive fuels such as furnace oil.
According to an estimate, the use of coal instead of furnace oil can result in a saving of about Rs495 million per year for a plant producing 3,000 tons of cement per day. According to an estimate cement industry requires around 3.5 million tons of coal to run its plants.
The government has decided to increase the share of coal in the country’s energy mix from 7.6 per cent to 18 per cent by the year 2018. In view of the rapidly mounting energy deficit, there is a need to modernise the province’s coal-mining sector.
Pakistan’s coal mining sector has urged the Federal Board of Revenue (FBR) to extend tax incentives which include duty-free import of mining machinery, equipment and transportation trucks, withdrawal of GST for another five years, bank loans at three per cent interest and the depreciation allowance exceeding 50 per cent of the total investment.
The supply of coal from Chamalang mines, earlier stopped, has started. The Chamalang-Mekhtar track has also been made operational for heavy traffic, enabling coal trucks to go to the markets. The mines were made operational following the tripartite agreement between the Marri and Luni tribes and mine contractors last year.
The project also envisages education facility for 300 students by the army. The package includes free education, books, uniforms, stationery and monthly stipend of Rs500. In the initial stage, the army would bear the cost. Later it would be managed through the Chamalang Development Fund.
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