Business Recorder
The Power Division has launched a major reform initiative aimed at addressing operational inefficiencies in Thar coal mining, which will save approximately Rs25 million per day in diesel costs translating into annual foreign exchange savings of USD 25–30 million. “Under the leadership of the Honorable Prime Minister and the strategic direction of the Federal Minister for Power, Awais Ahmed Leghari, the Power Division has undertaken a significant reform to address operational inefficiencies in Thar coal mining,” the Power Division said in a press release. The press release said that the initiative was projected to deliver substantial national savings by drastically reducing diesel consumption, thereby cutting import bills and lowering electricity costs. “The cost of coal is projected to decrease by around USD 0.7 per ton, leading to a significant reduction in electricity generation costs. The cost of power generated through diesel for mining operations, currently around US cents 33 per kWh, will decline to US cents 13 per kWh (or even lower as per B4 tariff)—a reduction of over 60 percent,” the press release said. A key inefficiency was identified in the mining operations, particularly in the process of water management during coal extraction. . READ MORE: Petroleum supply challenges in region: French envoy lauds Pakistan’s approach Recognizing the economic and environmental implications, the Power Division, under clear policy direction from the federal minister, engaged key stakeholders including the Thar Coal Energy Board (TCEB), National Grid Company (NGC), and HESCO to develop a sustainable alternative. Following detailed deliberations, the management of Thar Block-I and Block-II agreed to transition mining operations from diesel-based systems to grid-powered infrastructure by investing capital for this intervention, the press release said. “This transition involves an investment of approximately PKR 5.3 billion for the development of grid stations and associated transmission infrastructure, enabling connection with HESCO’s 132 kV Islamkot grid station and facilitating an offtake of around 60 MW of electricity to support mining operations.” Beyond its economic advantages, the initiative also offers significant environmental benefits. It is projected to cut carbon emissions by around 80,000 tons each year. Additionally, directives have been issued to shift diesel-powered mining vehicles to electric alternatives, improving efficiency while supporting long-term decarbonization goals. “This reform represents a practical and impactful step toward improving efficiency in Pakistan’s energy sector. READ MORE: Thar’s forgotten promise By replacing expensive diesel-based operations with grid-supplied electricity under the strategic oversight of the Federal Minister for Power, the government is not only reducing the cost of power generation but also alleviating pressure on foreign exchange reserves. Importantly, a significant portion of the mining-related energy demand—estimated at around 60 MW—will be shifted to the national grid, which shall improve overall system utilization while ensuring that these efficiency gains are ultimately passed on to consumers in the form of more affordable and sustainable electricity.”
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