ISLAMABAD: Under the leadership of the Prime Minister of Pakistan and on the strategic direction of the Federal Minister for Power, Awais Ahmed Leghari, the Power Division has initiated significant reforms to address operational issues in Thar Coal Mining.
These measures will result in substantial savings at the national level by reducing diesel consumption, which will reduce import bills and also reduce electricity prices.
According to the details, these reforms are expected to save about Rs25 million per day in diesel costs, which will result in less dependence on imported fuel and save $25-30 million in annual foreign exchange.
In addition, the price of coal per ton is expected to decrease by about $0.7, which will significantly reduce the cost of generating electricity from Thar coal.
The current cost of generating electricity from diesel for mining operations in Tharcoal, which is 33 cents per kWh, will be reduced to 13 cents per kWh (or even less under the B4 tariff). This is a reduction of more than 60%.
A major issue in mining operations has arisen, particularly in the water management process during coal extraction. Historically, diesel-powered systems were widely used for dewatering and other mining activities. On average, about 35,000 liters of diesel were used per day for dewatering alone,
while the total diesel consumption in mining operations is between 200,000 and 250,000 liters per day. This heavy dependence on imported diesel significantly increases the cost of coal production.
Since these costs are considered as pass-through items, their financial burden was ultimately borne by the electricity consumers in the form of higher tariffs.
Considering the economic and environmental impacts, the Power Division, on the clear policy direction of the Federal Minister, directed stakeholders including Thar Coal Energy Board (TCEB), National Grid Company (NGC), and HESCO to develop a sustainable alternative.
The management of Thar Block I and Block II, after detailed consultation, agreed to invest in the migration of diesel-powered systems to grid-connected infrastructure.
The migration involves an investment of about Rs 5.3 billion, under which grid stations and associated transmission infrastructure will be developed,
which will enable connection to HESCO’s 132 kV Islamkot grid station and facilitate the supply of about 60 MW of power for mining operations.
Federal Minister for Power Sardar Owais Leghari congratulated Thar Coal Energy Board, National Grid Company and HESCO for their cooperation, whose combined efforts will make this transition possible.
This advance planning demonstrates the foresight of the Power Division, which is ensuring long-term savings, especially in the current energy crisis in the Middle East.
In addition to the economic benefits, the environmental benefits of this project are also noteworthy. These measures are expected to reduce carbon emissions by about 80,000 tons per year.
Furthermore, instructions have also been issued to convert diesel-powered mining vehicles to electric vehicles, which will improve efficiency and help achieve long-term decarbonization goals.
These reforms are a practical and effective step towards improving the efficiency of Pakistan’s energy sector.
By replacing expensive diesel-based operations with grid-fed electricity under the strategic oversight of the Federal Minister for Power, the government is not only reducing the cost of power generation but also reducing the pressure on foreign exchange reserves.
Importantly, a large portion of mining-related energy demand—estimated at 60 MW—will be shifted to the national grid, improving overall system utilization and ensuring that these efficiency gains ultimately reach consumers in the form of more affordable and sustainable electricity.
