Data Collection Survey on Thar Coal Field In Pakistanopen_jicareport.jica.go.jp/pdf/12113221_01.pdf · The Data Collection Survey on Thar Coal Field in Pakistan ... 2.2.4 Coal Recourses

Islamic Republic of Pakistan

Data Collection Survey on

Thar Coal Field In

Pakistan

FINAL REPORT

FEBRUARY 2013

JAPAN INTERNATIONAL COOPERATION AGENCY (JICA)

Nippon Koei Co., Ltd.

Coal Resources & Mining Engineering Co., Ltd.

4R JR

13-014

i

FINAL REPORT for

The Data Collection Survey on Thar Coal Field in Pakistan

CONTENTS

Executive Summary

Location Map

Chapter 1 Introduction

1.1 Background of the Survey ......................................................................................................... 1 - 1

1.1.1 Present Situation of Power Supply and Demand ................................................................. 1 - 1

1.1.2 Political Measures on Energy Sector and Development Plan .............................................. 1 - 2

1.1.3 Latest Government Decision ................................................................................................ 1 - 3

1.2 Objective of Survey .................................................................................................................... 1 - 3

1.2.1 Objective of the Survey ........................................................................................................ 1 - 3

1.2.2 Survey Area ........................................................................................................................ 1 - 3

1.3 Scope of the Survey .................................................................................................................. 1 - 3

1.4 Survey Schedule ....................................................................................................................... 1 - 4

Chapter 2 Basic Data and Information

2.1 Coalfield Developments in Pakistan .......................................................................................... 2 - 1

2.1.1 Coal Role in Pakistan National Energy Policy .................................................................... 2 - 1

2.1.2 Coal-related Organization .................................................................................................... 2 - 2

2.1.3 Coalfields in Pakistan ........................................................................................................... 2 - 4

2.1.4 Coal Resources, Production, and Quality ............................................................................. 2 - 10

2.1.5 Laws or Regulations Related to Coal Development ............................................................. 2 - 14

2.2 Thar Coalfield ............................................................................................................................ 2 - 16

2.2.1 Exploration History ............................................................................................................... 2 - 16

2.2.2 Geological Setting ................................................................................................................ 2 - 16

2.2.3 Meteorology and Hydrology ................................................................................................. 2 - 23

2.2.4 Coal Recourses and Reserves ............................................................................................. 2 - 26

2.2.5 Quality .................................................................................................................................. 2 - 26

2.3 Other Coalfields in Sindh ........................................................................................................... 2 - 27

2.3.1 Lakhra Coalfield ................................................................................................................... 2 - 27

2.3.2 Sonda – Jherruk Coalfield .................................................................................................... 2 - 31

2.3.3 Badin Coalfield ..................................................................................................................... 2 - 32

2.3.4 Lakhra Thermal Power Plant ................................................................................................ 2 - 33

2.4 Power Development Plan .......................................................................................................... 2 - 38

2.4.1 Basic Policy for Power Development Plan ........................................................................... 2 - 38

2.4.2 Long-Term Power Demand Forecast .................................................................................... 2 - 38

2.4.3 Generation Planning ............................................................................................................. 2 - 39

2.4.4 Power Grid Expansion Plan ................................................................................................. 2 - 41

2.4.5 Policy and Plan for Developing and Conducting the Coal Thermal Generation Plant .......... 2 - 48

2.4.6 Other Relevant Plans and Information ................................................................................. 2 - 49

2.5 Power Generation Applications and Tariff .................................................................................. 2 - 50

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2.5.1 General Procedure of Application ......................................................................................... 2 - 50

2.5.2 Tariff Structure ...................................................................................................................... 2 - 51

2.5.3 Incentives on the Tariff ......................................................................................................... 2 - 52

2.5.4 Referential Tariff Generated by Coal Thermal ...................................................................... 2 - 53

Chapter 3 Thar Coalfield Development

3.1 Current Status of Each Block ................................................................................................... 3 - 1

3.1.1 Block I ................................................................................................................................. 3 - 3

3.1.2 Block II ................................................................................................................................ 3 - 5

3.1.3 Block III ............................................................................................................................... 3 - 11

3.1.4 Block IV .............................................................................................................................. 3 - 11

3.1.5 Block V ............................................................................................................................... 3 - 12

3.1.6 Block VI .............................................................................................................................. 3 - 14

3.2 Geological Assessments ............................................................................................................ 3 - 17

3.2.1 Main Issues and Countermeasures in the Thar Coal Development .................................... 3 - 17

3.2.2 Estimation of ROM ............................................................................................................. 3 - 18

3.2.3 Controlling Spontaneous Combustion ................................................................................ 3 - 19

3.3 Mining Technology for Surface Mining ....................................................................................... 3 - 20

3.3.1 Mining Equipment and System ........................................................................................... 3 - 20

3.3.2 Cost performance ............................................................................................................... 3 - 26

3.3.3 Japanese Coal Mining Technologies .................................................................................. 3 - 28

3.4 Hydrogeology ............................................................................................................................ 3 - 35

3.4.1 Groundwater Situation .......................................................................................................... 3 - 35

3.4.2 Dewatering ........................................................................................................................... 3 - 37

3.5 Development Information for Other Similar Coalfields .............................................................. 3 - 40

3.5.1 Comparison with Other Coalfield of South Asia .................................................................... 3 - 40

Chapter 4 Power Generation

4.1 Feasibility of Generation by Utilizing Thar Coal ......................................................................... 4 - 1

4.1.1 Development Plan for the Power Plants ............................................................................... 4 - 1

4.1.2 Constrained Condition in the Thar Coalfield ......................................................................... 4 - 2

4.1.3 Applicable Power Generation Plant in the Thar Coalfield ..................................................... 4 - 2

4.2 Feasibility of Generation by Utilizing Gas Produced from Underground Gasification ............... 4 - 11

4.2.1 General Information .............................................................................................................. 4 - 11

4.2.2 UCG in the Thar Coalfield .................................................................................................... 4 - 11

4.3 Coal Thermal Generation Technology in Japan utilizing the Lignite Coal .................................. 4 - 13

4.3.1 Gasification Technology ....................................................................................................... 4 - 13

4.3.2 Coal Liquefaction Technology............................................................................................... 4 - 15

4.3.3 Other New Technology ......................................................................................................... 4 - 17

4.3.4 Superiority of Japanese Technology ..................................................................................... 4 - 20

Chapter 5 Infrastructures

5.1 Transmission Line .................................................................................................................... 5 - 1

5.1.1 Present Situation .................................................................................................................. 5 - 1

5.1.2 Expansion Plan of 500kV Transmission Line ....................................................................... 5 - 2

5.1.3 Proposed Plan of 500kV Transmission Line ......................................................................... 5 - 7

5.2 Water Supply ............................................................................................................................. 5 - 10

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5.2.1 Present Status ...................................................................................................................... 5 - 10

5.2.2 Outline of the Plan ................................................................................................................ 5 - 12

5.2.3 Construction Schedule ......................................................................................................... 5 - 14

5.2.4 Cost ...................................................................................................................................... 5 - 14

5.3 Mine Water Disposal .................................................................................................................. 5 - 16

5.3.1 Present Status ...................................................................................................................... 5 - 16

5.3.2 Outline of the Plan ................................................................................................................ 5 - 16

5.3.3 Cost ...................................................................................................................................... 5 - 17

5.3.4 Construction Schedule ......................................................................................................... 5 - 17

5.4 Road .......................................................................................................................................... 5 - 18

5.4.1 Present Situation .................................................................................................................. 5 - 19

5.4.2 Outline of the Road Improvement Plan ................................................................................ 5 - 22

5.4.3 Cost of the Improvement Plan .............................................................................................. 5 - 26

5.4.4 Schedule of the Improvement Plan ...................................................................................... 5 - 27

5.4.5 Consideration ....................................................................................................................... 5 - 28

5.5 Other Relevant Infrastructure .................................................................................................... 5 - 29

5.5.1 Thar Airport .......................................................................................................................... 5 - 29

5.5.2 Thar Lodge ........................................................................................................................... 5 - 29

Chapter 6 Candidate Project for the Japanese Yen Loan

6.1 Candidate Project for the Japanese yen Loan ........................................................................... 6 - 1

6.2 Thar – Matiari 500kV Transmission Line Project ....................................................................... 6 - 2

6.2.1 Summary of the Project ........................................................................................................ 6 - 2

6.2.2 Applicability of Japan’s Technique ........................................................................................ 6 - 3

6.2.3 Implementation Schedule ..................................................................................................... 6 - 4

6.2.4 Project Cost .......................................................................................................................... 6 - 5

6.2.5 Support to Construction of Power Plants .............................................................................. 6 - 6

Chapter 7 Environmental and Social Consideration

7.1 Introduction ................................................................................................................................ 7 - 1

7.2 Current Natural and Social Situation........................................................................................... 7 - 1

7.2.1 General ................................................................................................................................ 7 - 1

7.2.2 Current Status of Environmental Pollution ............................................................................ 7 - 2

7.2.3 Current Status of Natural Environment ................................................................................. 7 - 5

7.2.4 Current Status of Social Environment ................................................................................... 7 - 8

7.3 Environmental and Social Regulatory Framework of Pakistan .................................................. 7 -10

7.3.1 Legal Framework for EIA ...................................................................................................... 7 -10

7.3.2 National Environmental Quality Standards ........................................................................... 7 -11

7.3.3 Environmental Impact Assessment (EIA) System ................................................................ 7 -14

7.3.4 Social Environment .............................................................................................................. 7 -16

7.4 Screening and Categorization of the Project ............................................................................. 7 -18

7.4.1 Transmission Line Project .................................................................................................... 7 -18

7.4.2 Other Indivisible Projects ...................................................................................................... 7 -19

7.5 Scoping of the Environmental Impacts ...................................................................................... 7 -20

7.5.1 Transmission Line Project .................................................................................................... 7 -20

7.5.2 Other Indivisible Projects ...................................................................................................... 7 -22

Chapter 8 Financial and Economic Analyses

iv

8.1 Objectives and Methodology of the Financial and Economic Analyses ..................................... 8 - 1

8.1.1 Financial Analysis ................................................................................................................. 8 - 1

8.1.2 Economic Analysis ............................................................................................................... 8 - 1

8.1.3 Methodology ......................................................................................................................... 8 - 2

8.2 Assumptions used in the Financial and Economic Analysis ....................................................... 8 - 2

8.2.1 Project Life, Salvage Value, and Price Base ........................................................................ 8 - 2

8.2.2 Physical Contingency and Price Escalation ......................................................................... 8 - 3

8.2.3 Tariff ..................................................................................................................................... 8 - 3

8.2.4 Operation and Maintenance (O&M) Cost ............................................................................. 8 - 4

8.2.5 Conversion Factor ................................................................................................................ 8 - 4

8.2.6 Cut-off Rate .......................................................................................................................... 8 - 5

8.2.7 Auxiliary Consumption and Transmission and Distribution Loss .......................................... 8 - 6

8.2.8 Use of Water and Coal for Generation ................................................................................. 8 - 6

8.3 Identification and Quantification of Financial and Economic Costs ............................................ 8 - 7

8.3.1 Financial Cost ...................................................................................................................... 8 - 7

8.3.2 Economic Cost ..................................................................................................................... 8 - 8

8.4 Identification and Quantification of Financial and Economic Benefits ........................................ 8 - 10

8.4.1 Financial Benefits ................................................................................................................. 8 - 10

8.4.2 Economic Benefits ................................................................................................................ 8 - 11

8.5 Conclusion of Financial and Economic Analyses ....................................................................... 8 - 15

8.5.1 FIRR and FNPV ................................................................................................................... 8 - 15

8.5.2 EIRR and ENPV ................................................................................................................... 8 - 17

Chapter 9 Conclusions and Recommendations

9.1 Conclusions ............................................................................................................................. 9 - 1

9.1.1 Thar Coalfield Development ................................................................................................. 9 - 1

9.1.2 Candidate Project for Transmission Line .............................................................................. 9 - 2

9.2 Recommendations ................................................................................................................... 9 - 3

9.2.1 Recommendation for Coalfield Development ....................................................................... 9 - 3

9.2.2 Recommendation for Power Generation Development ........................................................ 9 - 5

APPENDICES Appendix 2-1 Functions of Thar Coal Energy Board, Sindh Coal Authority and Coal & Energy Departments Appendix 2-2 PPIB (Private Power and Infrastructure Board) and NEPRA (National Electric Power

Generation Authority) Appendix 2-3 NEPRA Notice of Hearing for Development of Determination of Upfront Tariff for Coal Power

Projects

Appendix 2-4 Assumption of Tariff for 600MW and 300MW Class Coal Thermal Generation

Appendix 3-1 Information of Panandhro Lignite Mine

Appendix 4-1 Basic Information for Thermal Power Generation

Appendix 5-1 Summary of Infrastructures in Thar Coalfield

Appendix 5-2 Route Map of Infrastructures in Thar Coalfield

Appendix 5-3 Route Map of Access Road to Thar Coalfield

Appendix 7-1 Preliminary Scoping of Environmental and Social Impacts of the Indivisible Projects

Appendix 8-1 Financial and Economic Analyses (300MW and 600MW)

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TABLES Table 1-1.1 Peak Power Generation and Demand ............................................................................ 1 - 1

Table 2.1-1 Pakistan Coal Resources ............................................................................................... 2 - 10

Table 2.1-2 Coal Production by Coalfield .......................................................................................... 2 - 11

Table 2.1-3 Coal Consumption in Pakistan ....................................................................................... 2 - 12

Table 2.1-4 Import of Coal in Pakistan .............................................................................................. 2 - 13

Table 2.1-5 Coal Quality of Coalfields in Pakistan ............................................................................. 2 - 13

Table 2.1-6 Broad Terms for Mineral Titles, Sindh Province .............................................................. 2 - 14

Table 2.1-7 Application Fees (Sindh Mining Concession Rules,2002) .............................................. 2 - 15

Table 2.1-8 Annual Rental Fee .......................................................................................................... 2 - 15

Table 2.2-1 Exploration Situation and Coal Resources ..................................................................... 2 - 26

Table 2.2-2 Coal Qualities for Block I to XII ....................................................................................... 2 - 26

Table 2.3-1 Factors on Each Seam in Lakhra Coalfield .................................................................... 2 - 28

Table 2.3-2 Elements of Each Area in Sonda - Jherruck ................................................................... 2 - 31

Table 2.3-3 Quality of Badin Coal ...................................................................................................... 2 - 33

Table 2.3-4 Main Characteristics of Lakhra Power Station ................................................................ 2 - 34

Table 2.3-5 Operation Data ............................................................................................................... 2 - 35

Table 2.4-1 Forecasts for Selected Year ........................................................................................... 2 - 38

Table 2.4-2 Generation Expansion Plan ............................................................................................ 2 - 39

Table 2.4-3 Summary of Major Expansion Plan Up to 2016-17 ......................................................... 2 - 43



Table 2.4-6 Fuel Price Forecasts to the Year 2030 ............................................................................ 2 - 48

Table 2.4-7 Least Cost Generation Plan (Base Case) ....................................................................... 2 - 49

Table 2.4-8 List of Future Plan for Thermal Coal Generation Plants ................................................. 2 - 49

Table 2.4-9 Summary of Jamshoro Thermal Power Plants ............................................................... 2 - 50

Table 2.5-1 Power Generation Application Procedure and Schedule ................................................ 2 - 51

Table 2.5-2 Constitution of Tariff ........................................................................................................ 2 - 52

Table 2.5-3 Levelized Tariff Proposed by PPIB ................................................................................. 2 - 53

Table 2.5-4 Assumption of Tariff of Generation (1,000MW class) ...................................................... 2 - 54

Table 3.1-1 Coal Mine Development and Power Plant Plan .............................................................. 3 - 2

Table 3.1-2 Current Situation of Each Block in Thar Coalfield ........................................................... 3 - 2

Table 3.1-3 Selected Mining Method and Equipment ........................................................................ 3 - 9

Table 3.1-4 Production Schedule (Excavation) – Variant 1 – 6.5 Mt/a T&S ....................................... 3 - 10

Table 3.3-1 Mining Plan for Block II ................................................................................................... 3 - 20

Table 3.4-1 Characteristic of Aquifers ................................................................................................ 3 - 35

Table 3.4-2 Model Settings, Analytical Condition and Boundary Condition ....................................... 3 - 38

Table 3.4-3 Analytical Parameter ...................................................................................................... 3 - 39

Table 3.4-4 Analytical Cases ............................................................................................................. 3 - 39

Table 3.5-1 Comparison of Geological Conditions between Thar Coalfield and Neyveli Coalfield .... 3 - 40

Table 3.5-2 Production and Strip Ratio in Neyveli Lignite Mine ......................................................... 3 - 42

Table 3.5-3 The Outline of Thermal Power Stations in the Neyveli Coalfield ..................................... 3 - 44

Table 4.1-1 Development Plan of Power Plants ................................................................................ 4 - 1

Table 4.1-2 Component Analysis of the Thar Coal ............................................................................ 4 - 2

Table 4.1-3 Comparison of Steam Condition and Plant Efficiency ..................................................... 4 - 4

Table 4.1-4 Water Usage for Coal Thermal Power Plants ................................................................. 4 - 6

Table 4.2-1 Summary of USG in the Thar Coalfield .......................................................................... 4 - 11

Table 4.3-1 Advantages of IGCC ....................................................................................................... 4 - 14

Table 4.3-2 Development Status of Clean Coal Technology .............................................................. 4 - 20

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Table 5.1-1 Development Plan of Power Plants in the Thar Coalfield ............................................... 5 - 1

Table 5.1-2 Scope of Works for the 500kV Network Surrounding Matiari S/S ................................... 5 - 3

Table 5.1-3 List of Major Equipment for the 500kV Transmission Line between Thar and Matiari .... 5 - 4

Table 5.1-4 List of Major Equipment for the Extension of 500kV Matiari Switching Station ............... 5 - 4

Table 5.1-5 Summary of Project Cost ................................................................................................ 5 - 5

Table 5.1-6 Comparison between AAAC and LL-TACSR/AS ............................................................ 5 - 8

Table 5.1-7 Comparison of Project Cost for 500kV Transmission Line

between Thar and Matiari S/S ........... 5 - 9

Table 5.2-1 Calculation of Pipeline and Pump ................................................................................... 5 - 15

Table 5.2-2 Cost Estimation for Water Supply System ...................................................................... 5 - 16

Table 5.4-1 Road Design Works of Segment-4 and Segment-5 ........................................................ 5 - 23

Table 5.4-2 Design Vehicles for the Road Improvement ................................................................... 5 - 24

Table 5.4-3 Construction Cost of the Road Improvement .................................................................. 5 - 27

Table 5.4-4 Contents, Status and Schedule of Segments (as of 10 December 2012) ....................... 5 - 27

Table 6.2-1 Summary of Candidate Project for Japanese Yen Loan ................................................. 6 - 2

Table 6.2-2 Comparison of Construction Cost in Consideration of Integral Plan ............................... 6 - 3

Table 6.2-3 Comparison of Transmission Line Loss .......................................................................... 6 - 4

Table 6.2-4 Project Implementation Cost .......................................................................................... 6 - 5

Table 7.2-1 Groundwater Quality in Thar Coalfield............................................................................ 7 - 3

Table 7.2-2 Ambient Air Quality in Thar Coalfield .............................................................................. 7 - 4

Table 7.2-3 Flora and Fauna and Threatened Species in the Survey Area ....................................... 7 - 7

Table 7.3-1 National Environmental Quality Standard for Ambient Air ............................................... 7 - 11

Table 7.3-2 National Environmental Quality Standard for Ambient Noise .......................................... 7 - 12

Table 7.3-3 National Environmental Quality Standard for Municipal and Liquid Industrial Effluents .. 7 - 13

Table 7.3-4 Illustrative List of Sensitive Sectors, Characteristics, and Areas

in JICA Guidelines and Pakistani Guidelines .......... 7 - 15

Table 7.4-1 Screening and Categorization of Indivisible Projects ...................................................... 7 - 19

Table 7.5-1 Preliminary Scoping of Environmental and Social Impacts of the

Transmission Line Project .............. 7 - 19

Table 8.1-1 Financial Analysis for the Generation and Transmission Projects .................................. 8 - 1

Table 8.1-2 Economic Analysis for the Generation and Transmission Projects ................................. 8 - 2

Table 8.2-1 Assumption on Tariff of Coal Thermal Power Plant ........................................................ 8 - 3

Table 8.2-2 Terms of Trade ............................................................................................................... 8 - 4

Table 8.2-3 Percentage of Wage Earners Earning below the Minimum Wage of 2001 ..................... 8 - 4

Table 8.2-4 Monthly Wages of Regular and All Workers by Type of Enterprise 2003-04 ................... 8 - 5

Table 8.2-5 Calculation of Conversion Factor on Local Cost of Procurement and Construction ....... 8 - 5

Table 8.2-6 Cut-off Yield of the Treasury Bills .................................................................................... 8 - 5

Table 8.2-7 Calculation of Economic Price of Coal ............................................................................ 8 - 7

Table 8.3-1 Financial Cost of the Generation Project upon Completion of Construction .................... 8 - 7

Table 8.3-2 Financial Cost of the Transmission Project upon Completion of Construction ................ 8 - 8

Table 8.3-3 Annual Allocation of Financial Cost (Generation) ......................................................... 8 - 8

Table 8.3-4 Annual Allocation of Financial Cost (Transmission) ........................................................ 8 - 8

Table 8.3-5 Economic Cost of the Project upon Completion of Construction

(Generation and Transmission Alternative 1) ............. 8 - 9

Table 8.3-6 Economic Cost of the Project upon Completion of Construction


Table 8.3-7 Annual Allocation of Economic Cost


Table 8.3-8 Annual Allocation of Economic Cost


vii

Table 8.4-1 Economic Price of Tariff ................................................................................................... 8 - 11

Table 8.4-2 Assumption on the Alternative Energy Sources Based on the Types of Consumers ...... 8 - 12

Table 8.4-3 Average Electricity Consumption per Consumer ............................................................. 8 - 12

Table 8.4-4 Household Expenditure on Energy ................................................................................. 8 - 12

Table 8.4-5 Economic Cost of Hi-Speed Diesel Oil (H.S.D) ............................................................... 8 - 13

Table 8.4-6 Variable Cost of Diesel Generation ................................................................................. 8 - 13

Table 8.4-7 Fixed and Variable Costs of UPS .................................................................................... 8 - 14

Table 8.4-8 Calculation of Saved Cost of Alternative Energy Sources .............................................. 8 - 15

Table 8.5-1 FIRRs and FNPVs of the Projects ................................................................................... 8 - 16

Table 8.5-2 Sensitivity Analysis for the Generation (FIRR & FNPV) .................................................. 8 - 16

Table 8.5-3 Sensitivity Analysis for Transmission Alternative 1 (FIRR & FNPV) ................................ 8 - 17

Table 8.5-4 Sensitivity Analysis for Transmission Alternative 2 (FIRR & FNPV) ................................ 8 - 17

Table 8.5-5 EIRR and ENPV .............................................................................................................. 8 - 17

Table 8.5-6 Sensitivity Analysis for Alternative 1 (EIRR & ENPV) ..................................................... 8 - 18

Table 8.5-7 Sensitivity Analysis for Scenario Alternative 2 (EIRR & ENPV) ...................................... 8 - 18

FIGURES Figure 1.1-1 Peak Power Generation and Demand and Power Shortage .......................................... 1 - 2

Figure 1.2-1 Location of Objective Area .............................................................................................. 1 - 3

Figure 2.1-1 Federal Organization Chart on Energy and Power ......................................................... 2 - 3

Figure 2.1-2 Sindh Province Organization Chart on Thar Coal Development ..................................... 2 - 3

Figure 2.1-3 Coalfields of Pakistan ..................................................................................................... 2 - 4

Figure 2.1-4 Coalfields in Sindh Province ........................................................................................... 2 - 5

Figure 2.1-5 Coal Production by Coalfield .......................................................................................... 2 - 11

Figure 2.1-6 Coal Consumption .......................................................................................................... 2 - 12

Figure 2.2-1 Location map of Thar Coalfield, Sindh, Pakistan ............................................................ 2 - 16

Figure 2.2-2 Stratigraphic Sequence in the Thar Coalfield ................................................................. 2 - 18

Figure 2.2-3 Blocks, Cumulative Thickness and Cross Section Line in the Thar Coal Blocks ............ 2 - 19

Figure 2.2-4 Generalized Cross Section through Block I, IV,II and III Thar Coal Blocks ..................... 2 - 20

Figure 2.2-5 Representative Borehole Sections in Thar Coalfield ...................................................... 2 - 20

Figure 2.2-6 Location of Borehole Sections in Thar Coalfield ............................................................. 2 - 21

Figure 2.2-7 Average Monthly Rainfall and Temperature 1979 – 2008 ............................................... 2 - 23

Figure 2.2-8 Bird’s Eye View of Geography and Geology in the Study Area

with Regional Groundwater Direction ........... 2 - 25

Figure 2.3-1 Generalized Cross Section of Lakhra Coalfield .............................................................. 2 - 27

Figure 2.3-2 Generalized Stratigraphy of Workable coal seams ....................................................... 2 - 29

Figure 2.3-3 Located Relation of Lakhra Coal Mine and Power Station ............................................ 2 - 34

Figure 2.3-4 Relation of Coal and Limestone Supply ........................................................................ 2 - 36

Figure 2.4-1 Peak Demand Forecast for High, Base and Low Cases ............................................... 2 - 39

Figure 2.4-2 Capacity Rate in Thar Coalfield on the Generation Expansion Plan ............................. 2 - 40

Figure 2.4-3 Increment of Generation Capacity in Thar .................................................................... 2 - 40

Figure 2.4-4 Existing Grid Map for 500kV and 220kV Systems ........................................................ 2 - 41

Figure 2.4-5 Expansion Plan Grid Map for 500kV and 220kV Systems Up to 2016 - 17 .................... 2 - 42

Figure 2.4-6 Expansion Plan Grid Map for 500kV and 220kV Systems Up to 2020 ........................... 2 - 44

Figure 2.4-7 Expansion Plan Grid Map for 500kV and 220kV Systems Up to 2030 ........................... 2 - 46

Figure 2.4-8 Installed Capacity as of 2010 ......................................................................................... 2 - 48

Figure 3.1-1 Thar Coal Blocks Layout ................................................................................................ 3 - 1

Figure 3.1-2 Isopach Map of Block I ................................................................................................... 3 - 3

Figure 3.1-3 Cross-section along Boreholes of Block I ....................................................................... 3 - 4

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Figure 3.1-4 Isopach Map of Block II ................................................................................................ 3 - 5

Figure 3.1-5 Cross-section along Boreholes on Block II ..................................................................... 3 - 6

Figure 3.1-6 Isopach Map of Heating Values (ar base), Block II ......................................................... 3 - 7

Figure 3.1-7 Seam Correlation Chart of Boreholes around Block II .................................................... 3 - 7

Figure 3.1-8 Seam Correlation Chart Line .......................................................................................... 3 - 8

Figure 3.1-9 Illustrations of Two Variants of Equipment ...................................................................... 3 - 10

Figure 3.1-10 Infrastructure Situation of Block II Development in 2030 ................................................ 3 - 11

Figure 3.1-11 UCG Production Process ............................................................................................... 3 - 13

Figure 3.1-12 Oracle Coalfields Mining Plan ........................................................................................ 3 - 15

Figure 3.1-13 Layout of Mining Area and Mine-mouth Power Plant in Block VI .................................... 3 - 15

Figure 3.2-1 Selective Mining Criteria Example .................................................................................. 3 - 18

Figure 3.3-1 Full Mechanized Longwall Mining Method ...................................................................... 3 - 30

Figure 3.3-2 General Layout of Single Prop and Iron Bar Method ...................................................... 3 - 31

Figure 3.3-3 Concept of the Room and Pillar Mining Method ............................................................. 3 - 32

Figure 3.3-4 Conceptual Layout of Saw Mining Method ..................................................................... 3 - 33

Figure 3.3-5 Conceptual Cross Section of Hydraulic Mining Method .................................................. 3 - 34

Figure 3.4-1 Aquifers in Thar Coalfield Area ....................................................................................... 3 - 35

Figure 3.5-1 Location Map of Thar and Neyveli Coalfields ................................................................. 3 - 41

Figure 3.5-2 Cross-Section Showing Different Aquifers in Block III, Thar Coalfield ............................ 3 - 41

Figure 3.5-3 Neyveli Lignite Deposit Aquifers ..................................................................................... 3 - 41

Figure 3.5-4 Schematic Diagram of Electricity Generation ................................................................. 3 - 44

Figure 4.1-1 Candidate Sites of the Power Plant ................................................................................ 4 - 1

Figure 4.1-2 CAD Model of Lignite Coal Combustion Boiler ............................................................... 4 - 3

Figure 4.1-3 Process Flow of Circulating Fluidized-Bed Combustion Boiler ....................................... 4 - 4

Figure 4.1-4 Hot Day Power Loss ....................................................................................................... 4 - 8

Figure 4.1-5 Typical Environmental Pollution Control Facility ............................................................. 4 - 8

Figure 4.1-6 Typical Desulphurization Process ................................................................................... 4 - 9

Figure 4.1-7 Recommendation of Boiler Type for Thar Coal ............................................................... 4 - 10

Figure 4.2-1 Schematic Model System of UCG in the Thar Coalfield ................................................. 4 - 11

Figure 4.3-1 Configuration of CCT for Power Generation in Japan .................................................... 4 - 13

Figure 4.3-2 Schematic Diagram of Demonstration Plant and the Structure of Gasifier ..................... 4 - 14

Figure 4.3-3 System Outlook for the Future of Zero-emission Technology ......................................... 4 - 15

Figure 4.3-4 Typical Flow of Direct Liquefaction Process ................................................................... 4 - 16

Figure 4.3-5 Typical Flow of Indirect Liquefaction Process ................................................................. 4 - 16

Figure 4.3-6 UBC Process Diagram ................................................................................................... 4 - 18

Figure 4.3-7 New Slurrification Process for Low Rank Coal ............................................................... 4 - 19

Figure 4.3-8 Property Change of Low Rank Coal ............................................................................... 4 - 19

Figure 4.3-9 Schematic Diagram of Brown Coal Drying System ........................................................ 4 - 20

Figure 5.1-1 500/220 kV Grid Map Surrounding Sindh from 2016 up to 2017 .................................... 5 - 2

Figure 5.1-2 Scope of Works for the Expansion of 500kV Network System by Fund Source ............. 5 - 3

Figure 5.1-3 Route Map of the 500kV Transmission Line between Thar and Matiari .......................... 5 - 4

Figure 5.1-4 Tentative Construction Schedule .................................................................................... 5 - 5

Figure 5.1-5 Operation Method of 500kV Transmission Line (Original Plan) ...................................... 5 - 6

Figure 5.1-6 Operation Method of 500kV Transmission Line (Proposed Plan) ................................... 5 - 7

Figure 5.1-7 Section of LL-TACSR/AS ................................................................................................ 5 - 8

Figure 5.2-1 NDP Project Map ............................................................................................................ 5 - 11

Figure 5.2-2 Water Supply Scheme from LBOD ................................................................................. 5 - 12

Figure 5.4-1 Route Map of the Access Road to the Thar Coalfield ..................................................... 5 - 18

Figure 5.4-2 Schematic Route Map .................................................................................................... 5 - 18

Figure 5.4-3 Route of Port Qasim Road ............................................................................................. 5 - 19

ix

Figure 5.4-4 Typical Cross Section of the Segment-3......................................................................... 5 - 25

Figure 5.4-5 Typical Cross Section of the Segment-4......................................................................... 5 - 25

Figure 5.4-6 Location of New Bypasses ............................................................................................. 5 - 26

Figure 6.1-1 Overall Development Plan for the Thar Coalfield............................................................ 6 - 1

Figure 6.2-1 Summary of Candidate Project for Japanese Yen Loan ................................................. 6 - 2

Figure 6.2-2 Implementation Schedule ............................................................................................... 6 - 4

Figure 7.2-1 Location Map of Runn of Kutch, Ramsar Site ................................................................. 7 - 8

Figure 7.3-1 Environmental Impact Assessment Process in Pakistan ................................................ 7 - 14

Figure 8.5-1 Saved Cost ..................................................................................................................... 8 - 14

x

Abbreviations

AAAC : All Aluminum Alloy Conductor AASHTO : American Association of State Highway and Transportation Officials ACGR : Annual Compound Growth Rate ACSR : Aluminum Conductor Steel Reinforced AJK : Azad Jammu and Kashmir ADB : Asian Development Bank AR : As received basis B.P. : Beginning Point BWE : Bucket Wheel Excavator CCPP : Combined Cycle Power Plant Cct : Circuit CFBC : Circulating Fluidized Bed Combustion CPP : Capacity Purchase Price CRME : Coal Resources & Mining Engineering Co. Ltd CSA : Coal Supply Agreement D/C : Double Circuit DISCO : Distribution Company EAGLE : Coal Energy Application for Gas, Liquid & Electricity EIA : Environmental Impact Assessment EIRR : Economic Internal Rate of Return EPP : Energy Purchase Price EPS : Electro-Static Precipitator ESIA : Environmental and Social Impact Assessment FBC : Fluidized Bed Combustion FDF : Forced Draft Fan FIRR : Financial Internal Rate of Return FO : Fuel Oil FS : Feasibility Study FSA : Fuel Supply Agreement FY : Fiscal Year starting on 1st July ending on 30th June in Pakistan GENCO : Generation Company GOP : Government of Pakistan GOS : Government of Sindh GPS : Global Positioning System GSA : Gas Supply Agreement GSP : Government of Sindh Province HPP : Hydro Power Plant HVDC : High Voltage Direct Current IEE : Initial Environment Examination IEEJ : The Institute of Electrical Engineers of Japan IGCC : Integrated Coal Gasification Combined Cycle IGFC : Integrated Coal Gasification Fuel Cell Combined Cycle IUCN : International Union for Conservation of Nature IPP : Independent Power Producer JCF : JCF Coal Fuel JCOAL : Japan Coal Energy Center JGC : JGC Corporation JICA : Japan International Cooperation Agency KESC : Karachi Electric Supply Company L/A : Loan Agreement LBOD : Left Bank Outfall Drain LC : Local Currency LCDC : Lakhra Coal Development Company LL-TACSR : Low Electrical Power Loss Thermal Resistant Aluminum Alloy Conductor

xi

Steel Reinforced / Aluminum-clad Steel Reinforced LPGC : Lakhra Power Generation Company LOI : Letter of Intent LOS : Letter of Support LRC : Low Rank Coal MCR : Maximum continuous rating N-5 : National Highway No.5 NDP : National Drainage Program NEDO : New Energy and Industrial Technology Development Organization NHA : National Highway Authority MHI : Mitsubishi Heavy Industries, LTD NEPRA : National Electric Power Regulatory Authority NEQS : National Environmental Quality Standards NPSEP : National Power System Expansion Plan NTDC : National Transmission & Despatch Company NWFP : North-West Frontier Province OB : Overburden O&M : Operation and Maintenance ODA : Official Development Assistance PC : Pulverized Coal PEPCO : Pakistan Electric Power Company PF : Pulverized Fuel PMDC : Pakistan Mineral Development Corporation PPIB : Private Power Infrastructure Board PPP : Public-Private Partnership RAP : Resettlement Action Plan RC : Railway Crossing RO : Reverse Osmosis Rs. : Pakistan Rupees SCA : Sindh Coal Authority S/C : Single Circuit SECMC : Sindh-Engro Coal Mining Company Seg : Segment TCEB : Thar Coal & Energy Board TDS : Total Dissolved Solids TOE : Ton of Equivalent UCG : Underground Coal Gasification UBC : Upgraded Brown Coal USGS : United States Geological Survey WAPDA : Water and Power Development Authority WB : World Bank WUL : Water Usage License W&S : Works and Services Department

Exchange Rate (as of October, 2012)

1 US dollar = 95.4 Pakistan Rupee

1 Japanese Yen = 1.21 Pakistan Rupee

(Unless otherwise specified)

EXECUTIVE SUMMARY

Executive Summary

1

Executive Summary

1. Objectives

The Survey aims the following set objectives in order to achieve a stable power supply in

Pakistan:

1) To study the feasibility of utilizing the Thar coal for power generation,

2) To survey the necessity of developing the coalfield, coal procurement system, and power

generation and transmission, and

3) To survey and examine the potential assistance for infrastructure development, such as

installation of transmission lines, securing water for distribution, and development of

roads for transporting coal.

2. Thar Coalfield Development

(1) Summary of the Thar Coalfield

Sindh Province has a total coal resource of 184.6 billion tons, of which mostly are found in Thar

area having 175.5 billion tons reserve. A brief description of the Thar coalfield and quality of

coal are cited below:

1) Thar Desert Area : 22,000 km2

2) Coalfield Area : 9,100 km2

3) Coal Resources : 175.506 billion tons

4) Chemical Analysis of Coal (AR: as received basis)

Moisture (AR) : 46.77%

Ash (AR) : 6.24%

Volatile Matter (AR) : 23.42%

Fixed Carbon (AR) : 16.66%

Sulphur (AR) : 1.16%

Heating Value (AR) : 5,774 Btu/lb (3,208 kcal/kg)

Coal Rank : Lignite-B to Lignite -A

As the lignite coal has high moisture contents generally, and low heating value, it is usually

suitable for domestic use, not for export.

(2) Status of the Thar Coal Development

The Government of Sindh has established and opened 12 blocks, 1,432km2 in total (Block I to

Data Collection Survey on Thar Coal Field

2

Block XII, of which Block III was divided into two) in the Thar coalfield, of which four blocks

listed below are currently being developed:

Table 1 Current Situation of Each Block in the Thar Coalfield

Block Developer Exploration

License Granted

Bankable F/S Completed

Mining Lease Issued

ESIA for Mining Accepted

Mining Start Planned

Coal coming Note

I

Global Mining Company of China 10.0 Mt/a

October 2011

March 2012 May 2012

EIA Public Hearing was done on 27 September 2012

In 2013 3 years from the starting mining

Financing of the project is being arranged.

II

Sindh Engro Coal Mining Company 6.5 Mt/a (Initially 3.5 Mt/a)

August 2009 August 2010 February 2012

EIA public hearing will be held in November 2012


Financing of the project is being arranged

V UCG Pilot Project by GoP

Test burn conducted in December 2011and Syngas produced

Presently the 8-10 MW Power Plant is being established at the cost of Rs.1.8 billion

VI

Oracle Coalfields, PLC

2.4 Mt/a

November 2007

October 2011

April 2012 In near future In 2013 2 years from the starting mining

JDA was concluded with KESC

Source: TCEB

Note: For the mining of coal in Thar, all license/leases are approved by the Thar Coal and Energy Board

Global Mining Company of China have got No Objection Certificate (NOC) from Sindh Environmental Protection Agency (SEPA) on EIA on 29 Nov.2012

Progress of Block I and Block II is ahead among the others planned. Summary of mining plan

for Block II is shown below. In addition, since public hearing for ESIA is completed already,

Block II will be possibly developed by 2013 year.

1)Total production

: 360～380 million tons of lignite

2) Production level : First phase 6.5 million tons （for 1,200 MW） Second phase 13.0 million tons （for 2,400 MW） Third phase 22.8 million tons （for 4,000 MW）

3) Mining method : Surface mining (Open cut method) Truck & Shovel

4) Mining area : One-third of the southern of Block II with an area of about 20 km² is the initial mining area

5) Overburden removal : Overburden from construction and initial stage will be dumped outside the dumping area located in the eastern corner of Block II. The dumping site will have a capacity of 586 million m3 and can accommodate a maximum height of 88 m.

(3) Thar Coal for Power Generation

The coal is lignite having low calorific value of 3,208kcal/kg, which is relatively low compare

with general coal for generation having calorific value of 5,000~6,000kcal/kg, and the high

moisture of around 47%.

As the almost of all coal are imported from abroad in Japan, there is no coal thermal plant

Executive Summary

3

utilizing same quality of coal in Thar. However, there are some countries that have the power

plants utilizing the similar quality of coal of Thar. Therefore there no issues utilizing Thar coal

for power generation.

(4) Applicable Japanese Technology

The average depth of coal in the Thar coalfield is 170 m, wherein the above 50 m is made up of

loose sand.

Open cut mining is suitable in the Thar coalfield. However, most of the coalfields in Japan

adopt underground mining and only minor cases of open cut mining. Hence, there is no

Japanese technology applicable for open cut mining of coal.

3. Power Generation

(1) Development Plan of Power Generation

At present, the developers for the three blocks, namely, Block I, Block II, and Block VI in the

Thar area have initiated their development of power generation, as listed in Table 2.

Table 2 Development Plan of Power Plants

Block I Block II Block VI

Developer Global Mining Company of

China Engro Powergen Oracle

Capacity 900 MW Initial phase: 600 MW Final phase: 1200 MW

Initial phase: 300 MW; Final phase: 1100 MW

Souse : TCEB

(2) Recommended Generation Facilities

Boiler types recommended to be applied in the Thar coalfield are CFBC and PC with up to 300

MW(Sub Critical) and 600 MW(Super Critical ) unit generation capacities, respectively.

As for the cooling system, since ambient temperature is very high in the Thar area, efficiency

needs to be decreased in case of dry condenser cooling type. Therefore, it is recommended to

apply wet cooling system.

(3) Applicable Japanese Technology

Japanese clean coal technologies such as IGCC and gasification, take into account

high-efficiency and reduction of environmental burdens. However, there have been protests

against these technologies at present, and corresponding price values are relatively high.

Therefore, Japanese technology is not recommended to be applied in the Thar coalfield at

present.


4

However, if the mine-mouth power plants utilizing the Thar coal will operate steadily in the

future, it is necessary to reconsider the clean coal technology of Japan.

4. Infrastructures

Important infrastructures such as ttransmission line, water supply, effluent disposal, and road

are currently under development as shown in Table 3. The budget have been allocated for the

latter three infrastructures by the Government of Sindh, and the design and construction have

been started. As for the transmission line, it is necessary to provide support for the

construction fund.

Table 3 Current Situation of the Development of Infrastructures

No. Type of Infrastructure Budget Allocation Progress

1. Transmission Line Budget is not allocated F/S is completed already

2. Water Supply Budget is allocated by the Government of Sindh Construction stage will start in 2013

3. Mine Water Disposal Budget is allocated by the Government of Sindh Construction stage will start in 2013

4. Road Budget is allocated by the Government of Sindh

Construction stage will start in 2013

Source：TCEB

5. Candidate Projects for Japanese Yen Loan

(1) Transmission Line

Candidate projects for Japanese yen loan are shown in Table 4. It is noted that there are two

alternatives applicable as conductor for transmission lines. However, although its initial cost is

high, it is recommended to adopt LL-TACSR/AS conductor of Japanese technology based on

the conclusion derived from the financial analysis.

Outline of the candidate projects are described in Chapter 6.

Table 4 Candidate Projects for Japanese Yen Loan

Unit: Rs. million

Description Alternative 1 Alternative 2

AAAC “Araucaria”

LL-TACSR/AS 750 mm2

1) Construction of the 500 kV Transmission Line (250 km, 2 cct.) 15,356.35 20,214.13

2) Expansion of the Matiari S/S (2 line bays with SR) 1,349.35 1,349.35

Total Construction Cost 16,705.70 21,563.48

Source: Prepared by the JICA Survey Team

Note: Above cost is based on PC-1 for interconnection of Thar Coal Based 1200 MW Power Plant with NTDC system.

Executive Summary

5

Above cost excludes price escalation, contingency, consulting services of eligible cost, non-eligible cost, interest and commitment charge.

(2) Power Generation Plants

Currently, the construction of power generation plants is planned by private sector by IPP.

Where the investment for the IPP by private sector will not proceed, JICA has potential to

finance the Yen loan to construct the power plants through the Government of Pakistan.

6. Environmental and Social Considerations

The candidate project for Japanese yen loan involves the construction of a 500 kV

transmission line with a 250 km length. The project needs to compensate affected farmers for

their agricultural land even though it is expected that said project will not cause destruction of

the natural protected area, and deforestation. According to JICA guidelines, the project could

be classified as Category A.

Moreover, according to a local regulation in Pakistan, the candidate project is classified as

“transmission lines (11 kV and above) and grid station” in Schedule II; and hence, the project

needs to undergo the official procedure for EIA approval as prescribed under the Pakistan

legislation.

In addition, since the candidate project is applied as an indivisible project, it is necessary to

undergo the procedure for EIA as a relevant project. Screening and categorization of

indivisible projects are shown in Table 5.

Table 5 Screening and Categorization of Indivisible Projects

Projects Categories by JICA Guideline,

2010 Appendix3

PEPA (Review of IEE and EIA)

Regulations, 2000

Coal Mining Projects A Sensitive Sector EIA

Thermal Power

Generation A Sensitive Sector EIA

1,200MW (over 200MW)

Road Project A Sensitive Sector EIA Federal or provincial highways or major roads greater than Rs. 50 million in value.

Water supply A Sensitive Sector EIA Major urban water supply infrastructure, including major head works and treatment plants.

Mine Water Disposal A Sensitive Sector (as a reservoir)

IEE Dams and reservoirs with a storage volume less than 50 million m3 or surface area less than 8 sq km)

Source: JICA Survey Team based on JICA Guidelines and PEPA Regulations


6

7. Economic and Financial Analysis

Economic and financial analyses were done for constructing 500kV 250km transmission line

and 1,200MW power generation.

(1) FIRR and FNPV

Benefits and costs are compiled and calculated considering the 2012 prices in order to obtain

the financial investment rate of return (FIRR). Moreover, the opportunity cost of capital (12%)

is used as the discount rate for calculating the financial net present value (FNPV).

The power generation project showed a positive NPV and slightly higher return than the cut-off

rate for FIRR. However, it should be noted that this return can only be achieved if the cost of

the generation is immediately translated into tariff. If the tariff approval by NEPRA and the

notice of the government’s gazette are delayed and/or the petition on tariff increase is partially

approved or disapproved, the rate of return of the generation project will reduce accordingly.

Both alternatives for the transmission project showed negative NPVs and below the cut-off

rate for FIRR (12%). The FIRRs of the transmission projects are significantly lower than the

cut-off rate. This is because the same fixed tariff is applied regardless of the length of the

transmission line. The longer the transmission line, the lower the IRR because of the higher

capital cost. However, as the peak demand increases after the completion of other Thar

generation projects, the FIRRs of the transmission project alternatives are expected to

increase.

Table 6 FIRR and FNPV

Case FIRR FNPV (Rs. million) FNPV (US$ million) Generation 14.1% 22,765 239 Transmission (Alternative 1) 4.0% (8,479) (89) Transmission (Alternative 2) 1.6% (13,140) (138)


The FIRR of Transmission (Alternative 2) is lower than Transmission (Alternative 1). This is

due to the fact that the capital cost of the former is more expensive than the latter at the initial

stage, while the expected transmission loss is almost the same between the two alternatives.

However, if the cost for accommodating the future expansion of generation is taken into

consideration, the additional cost of Alternative 2 amounting to Rs.0.8 billion is significantly

smaller compared to Alternative 1 at Rs.13 billion. As a result, the total cost of Alternative 2

amounting to Rs.22.9 billion becomes smaller than Alternative 1 at Rs.30.4 billion, and hence,

the FIRR of the former is expected to be higher than that of the latter.

Executive Summary

7

(2) EIRR and ENPV

Benefits and costs are compiled and calculated using the economic cost, in order to obtain the

economic internal rate of return (EIRR). Moreover, a social discount rate of 12% is used to

calculate the ENPV.

Table 7 EIRR and ENPV

Case EIRR ENPV (Rs. million) ENPV (US$ million)Generation + Transmission (Alternative 1) 28.9% 242,181 2,539 Generation + Transmission (Alternative 2) 28.9% 237,995 2,495


In both cases, the economic benefit is ensured as the EIRRs are significantly higher than the

cut-off rate (12%), and the ENPVs are positive. Thus, the project can be justified for

implementation as it contributes to the national economy’s enormous savings from the

alternative energy sources.

Location Map

IRAN

Islamabad

Lahore

INDIA

CHINA

AFGHANISTAN

Karachi

PAKISTAN

ARABIAN SEA

Thar Coalfield

Source：UNITED NATIONS

Source：JICA Survey Team

CHAPTER 1

INTRODUCTION


1 - 1


1.1 Background of the Survey

1.1.1 Present Situation of the Power Supply and Demand

In the Islamic Republic of Pakistan (hereinafter referred to as “Pakistan”), the power demand

has increased to 9.3% per annum in the past ten years along with the economic growth of the

country. However, the power supply capability could not catch up with the power demand that

continue to increase year after year. Consequently, about 6,105 MW power supply-demand

gap was recorded in the summer of 2011. While the peak demand was 18,860 MW, the actual

generating capacity is 12,755 MW only, though the installed capacity is approximately 21,000

MW. Under these circumstances, people of the country have been forced to accept the

scheduled power outage for about 8 hours a day on the average. The power outage has

caused difficulties in people’s lives and development of agriculture, which needs power for

irrigation. The industry has also suffered a great loss due to power outage, causing

unemployment and high cost of finished products. Therefore, reduction of the power

supply-demand gap on the power sector of the country is urgently required.

Table 1.1-1 shows the peak generation power, peak demand, power shortage, and power

shortage ratios against the peak demand from 2001 to 2011, while Figure 1-1.1 illustrates the

trend of the parameters shown in Table 1.1-1.

Table 1.1-1 Peak Power Generation and Demand

Year

Peak Generation Power [MW]

Peak Demand

[MW]

Power Shortage

[MW]

Power Shortage Rate [%]

2001 10,894 10,459 -435 -4.2

2002 10,958 11,044 86 0.8

2003 11,834 11,598 -236 -2.0

2004 12,792 12,595 -197 -1.6

2005 12,600 13,847 1,247 9.0

2006 13,292 15,838 2,546 16.1

2007 12,442 17,398 4,956 28.5

2008 13,637 17,852 4,215 23.6

2009 13,413 18,583 5,170 27.8

2010 13,163 18,521 5,358 28.9

2011 12,755 18,860 6,105 32.4

Source: Presentation Documents for Participants of 10th SMC of National Institute of Management, Karachi


1 - 2

Source: Presentation Documents for Participants of 10th SMC of National Institute of Management, Karachi

Figure: 1.1-1 Peak Power Generation and Demand and Power Shortage

For the power generation mix in the country, almost 37% comes from oil thermal, 31% hydro,

30% gas turbine, 2% nuclear, and 0.1% coal thermal. Coal thermal power generation in the

neighbouring countries India and China are more than 50% and 80%, respectively. Compared

to these countries, the dependency on coal thermal is relatively low in Pakistan. Oil thermal

generation is the most dependable fuel in Pakistan at present; however, oil cost remains high

and is fluctuating in the international market, which indicates that oil unfortunately cannot be a

suitable fuel. Utilizing coal and renewable energy including hydro, which are presently

available energy sources in Pakistan for generation, are the most essential means of securing

stable power.

1.1.2 Political Measures on Energy Sector and Development Plan

In "Vision 2030" and "Medium Term Development Framework (MTDF) 2005-2010 ", which are

highly ranked policies of the country, Pakistan formulates the energy policies consisting of i)

developing the power sources by utilizing the domestic resources such as hydro power, coal,

and natural gas, ii) promoting the power generation by public private partnership, iii)

promoting the privatization of all power sectors, and iv) reducing the power system losses. In

addition, the Government of Pakistan has announced its energy policy that the power supply

should increase to around 24,000 MW by 2020, in which 13,200 MW is expected to be from

coal thermal generation.

Under such circumstance, JICA has decided to conduct data collection survey (hereinafter

referred to as “the Survey”) in order to collect and organize the necessary information to

examine potential assistance for infrastructures, such as transmission line, water supply and

road access.

0

5,000

10,000

15,000

20,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Year

Peak Generation Power

Peak Demand

Power Shortage

Pe

ak

Ge

ne

ratio

n P

ow

er,

P

ea

k D

em

an

d, P

ow

er S

ho

rta

ge

[MW

]


1 - 3

1.1.3 Latest Government Decision

According to a write up released on 4 October 2012, the Government of Pakistan has decided

on 3 October 2012 that Thar coal will be used for coal based power generation, and all

conversions of existing and construction of new power projects will be designed on the basis of

Thar coal specification, throughout the country. The decision encourages both public and

private sectors to join in the development of Thar

coal.

1.2 Objectives of Survey

1.2.1 Objectives of the Survey

For achieving stable power supply in Pakistan, the

following are the set objectives of the Survey:

1) To study the feasibility of utilizing the Thar coal

for power generation;

2) To survey the necessity of developing the

coalfield, coal procurement system, generation

and transmission; and

3) To survey and examine the potential assistance for infrastructures such as construction of

transmission lines, securing water for generation and development of roads for transporting

the coal.

1.2.2 Survey Areas

The main survey area is the Thar coalfield shown in Figure 1.2-1. In addition, as reference,

existing coalfield and coal thermal power plant in Lakhra, as well as Sonda coalfield are

included in discussing the subject survey area.

1.3 Scope of the Survey

The following are the contents of the Survey:

1) Review of coalfield developments in Pakistan;

2) Collect and analyze the data on the development of Thar coalfield;

3) Review power development plan;

Source: JICA Survey Team

Figure 1.2-1 Location of Objective Area

Thar Coal Field

Islamabad

Lahore

Karachi Sonda Thatta Coal Field

Lakhra Coal Field


1 - 4

4) Review power generation development plan;

5) Review the present infrastructures surrounding and/or relevant to the coal thermal power

station;

6) Conduct economic and financial analyses; and

7) Hold seminar in Karachi in January 2013.

1.4 Survey Schedule

The entire survey schedule is about six months, from September 2012 to February 2013. The

first field survey in Pakistan was conducted from September 17, 2012 to October 16, 2012.

The second and third field surveys in Pakistan are to be conducted in November 26, to

December 15, 2012 and January 2013, respectively.

Submission schedule of reports during the survey period is as follows:

1) Inception report: end of September 2012

2) Interim report: middle of November 2012

3) Draft final report: early January 2013

4) Final report: middle of February 2013

CHAPTER 2

BASIC DATA AND INFORMATION


2 - 1


2.1 Coalfield Developments in Pakistan

2.1.1 Coal Role in Pakistan National Energy Policy

Pakistan does not have a national coal policy. The Government of Pakistan National Mineral

Policy (September 1995) states clearly in its Chapter 2 that “minerals are a provincial subject

under the Constitution, except oil, gas, and nuclear minerals and those occurring in special

areas”. Therefore, coal development works are under the provincial governments. Small

private mining companies are producing more than half of coal production in Pakistan for

supply to the brick and cement industries in each province. The GoP announced a private

power policy entitled “Policy for Power Generation Project 2002” which focuses on the use of

indigenous resources, especially coal, for power generation1. The Thar coal development

goes forward under the policy.

Coal had historically been the primary fossil fuel in Pakistan with the major consumers being

railways and cement, fertilizer and power plants. This was true until large deposits of oil and

natural gas were discovered in the 1960s2. As of 2006, coal shared 7% of Pakistan’s total

primary energy consumption, compared to natural gas at 45%, oil at 33%, and hydroelectricity

at 13% (EIA, 2008). Given the increasing costs of imported energy, Pakistan is, however, now

seeking to expand the share of coal in its energy mix to 19% by 2030 and to 50% by 2050.3

The Energy Security Action Plan has set a target of generating 20,000 MW power from coal by

2030. There is presently only one plant in the country that uses coal as fuel, i.e., the 150 MW

Lakhra Power Plant in Lower Sindh. However, the coal thermal plant can only presently

generate 35 MW power using coal from Lakhra.

There is limited production of oil and natural gas, and even more limited production of coal. No

coal has been produced in the Thar coalfields, the seventh largest lignite field in the world,

after being discovered in the 1990s. Some amounts of coals are imported, which have much

higher quality than the indigenous coal in Thar.

According to Pakistan Energy Yearbook 2011, total coal consumption, coal domestic

production, and imported coal in 2010-11 were 7,717,149 tons, 3,450,091 tons, and 4,267,058

tons, respectively. Coal comprises 10.4% (4,025,380 TOE) of the final energy consumption

(38,841,783 TOE) in 2010-11. The occupancy state of coal in the total energy consumption is

stably low at 10% to 13%. Main users of coal are brick-kiln and cement industries. Pak Steel

1 Raja Pervez Ashraf, Federal Minister of Water & Power, July 2008 2 Coal, Pakistan & Gulf Economist, July 2001 3 The figures are changed in NTDC National Power System Expansion Plan 2011-2030


2 - 2

uses imported bituminous coal at 429,000 tons/year and WAPDA coal thermal power plant

burns up only 93,000 tons of Lakhra coal per annum. While Lakhra Coal Development

Company (LCDC), a main coal supplier to GENCO, says that their original consumption plan

was about 750,000 tons per annum, and 300,000 tons per annum as of 1996 4 , their

consumption as of 2010-11 is only 93,000 tons as stated above. The decrease in consumption

is only due to GENCO Lakhra Power Station. The LCDC mine has a capacity of production of

800 tons/day (800 tons x 300 days = 240,000 tons/annum). However, LCDC’s production level

is less than 200,000 tons/annum due to WAPDA’s reduced consumption. Summarizing the

above, coal plays a minor role in the energy planning in Pakistan.

After Thar coalfield was discovered early in the 1990s, Thar coal has drawn the attention of

energy policy planners as an unlimited indigenous fuel. Thar coalfield has immense coal

resources of 175 billion tons that would be sufficient for generating 100,000 MW of electricity

for 300 years. However, the development of Thar coalfield made not the slightest progress for

a long time.

“Circular debt, week financial position of energy companies, falling gas production, high

dependence on oil and gas at over 80%, low exploitation of indigenous coal and hydro

resources, and unutilized power generation capacity owing to fuel supply constraints are

leading to severe energy shortages.”5.

The GoP has decided that in the future, only Thar coal would be used for thermal power

generation. In the future, all conversions of existing power projects and construction of new

ones will be on the basis of Thar coal specifications throughout the country6. This is the

foundation of an energy policy which is based on Pakistan’s indigenous resources today.

2.1.2 Coal-related Organization

Organizations related to coal development in the federal government are shown in Figure

2.1-1. Also, the Sindh Province organization chart on Thar coal development is shown in

Figure 2.1-2.

4

NEDO study 1996 5 Presentation by Aamer Mehmood, Research Officer, Planning Commission, Planning & Development Division at IEEJ, May

2012 6 News, Oct. 5, 2012


2 - 3


Figure 2.1-1 Federal Organization Chart on Energy and Power

Source: TCEB

Figure 2.1-2 Sindh Province Organization Chart on Thar Coal Development

Coal and Energy Development Department

Major Task- Development of coal resources - Grant of license, permits, leases for coal mining

Government of Sindh Province

Sindh Coal Authority

Main Subjective

- To attract potential investors to establish integrated projects of coal-mining and coal-fired power plants in Sindh

Major Task - To develop infrastructures for coal related projects - To accelerate the pace of activities relating to responsible for

planning, promoting, organizing, undertaking appropriate projects in this behalf and implementing programmed for exploration, development, exploitation, mining, processing and utilization of coal

Thar Coal and Energy Board

Major Task - One-stop organization on behalf of all the ministries, departments

and agencies of the GoP and the GoS in the matters relating toformulation of policies

- To accord approval of projects for coal mining in Thar and for coalfired power generation plants or for other uses of Thar coal forother uses of Thar coal.

Compositions of Thar Coal and Energy Board - Chief Minister Sindh - Federal Minister for Water & Power - Federal Minister for Finance - Federal Minister for Law and Justice - Deputy Chairman, Planning & Commission - Province Minister (Irrigation) - Province Minister (Revenue) - Province Minister (Finance) - Woman MNA from Thar - region - Federal Secretary, Ministry of Water and Power - Chief Secretary, Government of Sindh - Secretary, Coal & Energy Development Dept. - One Eminent Person - Managing Director, TCEB

Government of Pakistan

Ministry of Planning and Development

(MPD)

Ministry of Petroleumand Natural Resources

(MPNR)

Ministry of Waterand Power

(MPNR)

Ministry of Industry (MOI)

Geological Surveyof Pakistan

(GSP)DISCO

GENCO

NTDC

PPIB

NEPRA

Pakistan MineralDevelopment Coap.

(PMDC)

Lakhra CoalDevelopment Coap.

(LCDC)

Oil and GasDevelopment Coap.

(OGDC)

Sui Northern GasCoap.

Sui Southern GasCoap.

Pakistan State OilCoap.

PAKISTAN PETROLEUMLIMITED

KESC

IPPS

Private


2 - 4

2.1.3 Coalfields in Pakistan

The presence of coal deposits in Pakistan was known before independence. Seventeen

coalfields are confirmed, locations of which are shown in Figure 2.1-3, and the other coal

occurrences are observed all over Pakistan. Coal resources in Punjab and Balochistan

provinces were developed before the World War II. Its economic value was highlighted in 1980

when large coal resources were discovered in the Lakhra and Sonda areas of Sindh Province.

In the 1990s, the discovery of Thar coalfield depositing 175 billion tons at an area of about

9000 km2 in the Tharparker District of Sindh Province puts Pakistan up as the world’s fourth

largest coal resources

country.

Mining takes place in a

number of areas.

Recently, the

production from

Balochistan Province

was more than half of

Pakistan’s annual

output. All coals are

extracted manually and

come from small

underground mines.

There are several

hundred mines (IEA

2004).

The well-developed

coalfields in Pakistan

are located in Punjab, Balochistan, and Sindh, which are situated in three distinct areas

termed as coal provinces, while there are other coalfields in NWFP and the northern state,

which are being exploited on small scale. Figure 2.1-3 shows the positions of these coalfields.

Figure 2.1-3 Coalfields of Pakistan


2 - 5

(1) Sindh Coalfields

Sindh Province has total coal resources of 184.6 billion tons. The quality of coal is mostly

lignite-B to sub-bituminous A-C. Locations of six major deposits are shown in Figure 2.1-4.

Brief descriptions of major coalfields are as follows:

1) Lakhra Coalfield a. Distance from Karachi 193 km b. Area 1,309 km2 c. Coal Reserves 1.328 billion tons d. Chemical Analysis of Coal:

Moisture (AR) 28.9% Ash (AR) 18.0% Volatile Matter (AR) 27.9% Fixed Carbon (AR) 25.2% Sulphur (AR) 4.7% to 7.0%

Source: Original Base Map of Sindh Coal Authority (Coalfields of Sindh)

Figure 2.1-4 Coalfields in Sindh Province


2 - 6

Heating Value (Ave.) 4,622 Btu/lb to 7,554 Btu/lb

(2,568 kcal/kg to 4,197 kcal/kg)

e. The exploration and evaluation of North Lakhra coalfield have been sponsored with an estimated cost of Rs.38,516. The study is presently at the exploration stage.

2) Sonda-Jherruck coalfield a. Distance from Karachi 150 km (approx.) b. Identified Area 1,206 km2 c. Shallowest Coal Bed 37.8 m d. Deepest Coal Bed 265.28 m e. Coal Resources 7.112 billion tons f. Chemical Analysis of Coal:

Moisture (AR) 31.23% to 34.72% Ash (AR) 7.69% to 14.7% Volatile Matter (AR) 27.9% Fixed Carbon (AR) 25.2% Sulphur (AR) 1.38% to 2.82% Heating Value (Ave.) 6,780 Btu/lb to 11,029 Btu/lb


3) Indus East coalfield a. Explored Area 616 km2

b. Drill Holes 16 c. Thickest Coal Bed 2.40 m d. Coal Resources 1.5 billion tons e. Chemical Analysis of Coal:

Moisture (AR) 33.1% Ash (AR) 15.2% Volatile Matter (AR) 27.7% Fixed Carbon (AR) 23.9% Sulphur (AR) 2.6% Heating Value (Ave.) 6,300 Btu/lb to 8,000 Btu/lb

(3,500 kcal/kg to 4,444 kcal/kg) Coal Rank Lignite-B to Sub-bituminous-B

4) Thar coalfield a. Thar Desert Area 22,000 km2 b. Coalfield Area 9,100 km2 c. Total Drill Holes 217 d. Coal Resources 175.506 billion tons e. Chemical Analysis of Coal:

Moisture (AR) 46.77% Ash (AR) 6.24% Volatile Matter (AR) 23.42% Fixed Carbon (AR) 16.66% Sulphur (AR) 1.16% Heating Value (Ave.) 5,774 Btu/lb (3,208 kcal/kg) Coal Rank Lignite-A to Lignite-B ------Data Source7

5) Metting-Jhimpir coalfield The coalfield is situated 128km from Karachi, The area of 896km2 is near the railway station. Small amount of coal are produced.

6) Badin coalfield The coalfield is new still in geological exploration stage. Section 2.3.3 shows the outline.

7 Harnessing of Coal Resources of Sindh Province December 2003, Sindh Coal Authority


2 - 7

(2) Balochistan Coalfields

The coal seams in Balochistan are found in Ghazig Formation of Eocene Age. The quality of

the coal is sub-bituminous A to high volatile bituminous B. There are five known coalfields that

mostly lie around Quetta.

1) Sor-Range - Deghari Coalfield

Sor-Range - Deghari coalfield lies 13 km to 25 km southeast of Quetta covering an area of

about 50 km2 and is easily accessible through a metalled road from Quetta. The northern half

of the field is known as Sor-Range while Deghari is situated in the southern end of the field.

The thickness of the coal seam varies from 1.0 m to 2.0 m but in Sor-Range, seam sections up

to 5.0 m have been encountered. The Sor-Range coal is of better quality, with low ash and

sulphur content. The quality of the coal is high sub-bituminous A to high volatile bituminous B.

The following is the average composition:

Moisture 3.9% to 18.9% Volatile Matter 20.7% to 37.5% Fixed Carbon 41.0% to 50.8% Ash 4.9% to 17.2% Sulphur 0.6% to 5.5% Heating Value 11,245 Btu/lb to 13,900 Btu/lb


2) Chamalang Coalfield

This coalfield is newly discovered and needs detailed exploration and development. The GSP,

which did the preliminary work in these areas, has indicated that it has a good potential. The

quality of coal is better compared to the coals produced in the rest of Balochistan. The rank of

coal ranges from high volatile bituminous C to high volatile bituminous A with a total resource

of 6 million tons. Its heating value is over 12,000 Btu/lb (6,670 kcal/kg). It may be a coking coal.

3) Duki Coalfield

Coal seams in Duki are in the lowest part of Ghazing Formation. It shows a variation in

thickness from 0.15 m to 2.3 m. Geological structure is formed in syncline. The rank of the

coal ranges from sub-bituminous B to sub-bituminous C with high volatile matter and high

sulphur contents. The resource is 56 million tons.

4) Khost-Sharing-Harnai Coalfield

Khost-Sharing-Harnai coalfield lies about 40 km east of Quetta and found in the anticline and

syncline structure trending northeast to southwest with many faults. Coal seams show steep

dipping of more than 40 degrees. Workable coal seams consist of three seams (upper seam:

0.4 m- 0.7 m, middle seam: 0.7 m- 1.0 m, lower seam: 0.5 m). The Khost-Sharing-Harnai coal

is of better quality with high heating value. The coal rank is sub-bituminous B to high volatile


2 - 8

bituminous A. The total resource is 88 million tons, of which 13 million tons are measured and

75 million tons are indicated and inferred.

5) Pir Ismail Ziarat Coalfield

Pir Ismail Ziarat coalfield lies southeast of Quetta. Several coal seams are confirmed in the

complex geological structure. Upper seam (0.6 m– 0.7 m) and lower seam (0.4 m-0.45 m) are

workable. The coal rank is sub-bituminous A to high volatile bituminous B.

6) Mach Abegum Coalfield

Mach Abegum coalfield lies southeast of Quetta with an area of about 40 km2. More than 17

coal seams are confirmed, three of them are workable with maximum coal thickness of 1.5 m.

The quality is reported as having heating value of 5,500 kcal/kg, moisture of 12%, and sulphur

content of 4.0%-5.5%. The coal rank is sub-bituminous C. Coal resources are 9 million tons as

measured and 23 million tons as indicated and inferred.

(3) Punjab Coalfields

The Punjab provinces comprise the coalfields of eastern, central, and western Salt Range

between Khushab, Dandot, and Khewra while Makerwal coalfield lies in Trans Indus Range

(Sarghar Range). The rank of the coal is sub-bituminous A to high volatile bituminous.

1) Salt Range

The Salt Range coalfield covers an area of about 260 km2 between Khushab, Dandot, and

Khewra. The entire coal-producing area is well-connected with roads and railways. The top

seam varies in thickness from 0.22 m to 0.30 m while the middle seam is up to 0.60 m thick.

The lower seam is up to 1 m thick and is relatively of better quality. lt is being mined in Dandot,

Choa-Saiden Shah, and adjoining areas. Punjab Mineral Development Corporation and

several private companies are operating the mines in the area. Reserve of the deposit is 235

million tons. Average chemical analysis is as follows:

Moisture 3.2% to 10.8% Volatile Matter 21.5% to 38.8% Fixed Carbon 25.7% to 44.8% Ash 12.3% to 44.2% Sulphur 2.6% to 10.7% Heating Value 9,472 Btu/lb to 15,801 Btu/lb


2) Makerwal/Gullakhel

Makerwal/Gullakhel coalfield is situated in Sarghar Range (Trans Indus Range). The coalfield

extends from about 3.2 km west of Makerwal to about 13 km west of Kalabagh and covers an

area of about 75 km2 in Mianwali District. The quality of Makerwal/Gullakhel coal is better than

that of Salt Range coal and is preferred by the consumers. Total reserve is 22 million tons.


2 - 9

Average chemical analysis is as follows:

Moisture 2.8% to 6% Volatile Matter 31.5% to 48.1% Fixed Carbon 34.9% to 44.9% Ash 6.4% to 30.8% Sulphur 2.8% to 6.3% Heating Value 10,688 Btu/lb to 14,000 Btu/lb


(4) Coalfields in KP, AZAD JAMMU & KASHMIR (AJK)

The coalfields of KP (Northwest Frontier Province) are not yet fully explored. The coal deposits

are located in two areas, namely, Hangu and Cherat. These coal resources are estimated to

be 91 million tons. The coal is classified as sub-bituminous and its heating value ranges from

9,386 Btu/lb to 14,217 Btu/lb (5,214 kcal/kg to 7,898 kcal/kg). It has low sulphur and low ash

content. The coal seams in Hangu area are up to 3.5 m thick whereas the coal seams in

Cherat area are generally less than 1 m in thickness. The coal quality and resources are as

follows:

Moisture 0.1% to 7.1% Ash 5.3% to 43.3% Volatile Matter 14.0% to 33.4% Fixed Carbon 21.8% to 76.9% Sulphur 1.1% to 9.5% Heating Value 9,386 Btu/lb to 14,217 Btu/lb


Coal Resources Million tonsMeasured 2 Indicated 5 Inferred 84

Total 91

The AJK coalfield is located near Katli about 80 km southeast of Islamabad. One or two coal

seams occur in the steeply dipping Patala Formation of Paleocene Age, Paleogene. The coal

seams have an average thickness of 0.6 m. The total coal resources of AJK are estimated at 9

million tons. The coal is classified as sub-bituminous. The quality and resources are as

follows: Moisture 0.2% to 6.0% Ash 3.3% to 50.0% Volatile Matter 5.1% to 32.0% Fixed Carbon 26.3% to 69.5% Sulphur 0.3% to 4.8% Heating Value 7,336 Btu/lb to 12,338 Btu/lb


Coal Resources Million tonsMeasured 1 Indicated 1 Inferred 7

Total 9 Source: Pakistan Coal Power Generation Potential, June 2004, PPIB


2 - 10

2.1.4 Coal Resources, Production, and Quality

As of 2011, coal resources in Pakistan were reported to be as huge as 186 billion tons by GSP.

Two large coalfields were discovered in Sindh Province, namely, Lakhra coalfield and Thar

coalfield. Thar coalfield located near the border with India, accounts for 94% of Pakistan’s total

coal resources. The amounts of resources are enough for coal thermal power generation

(Table 2.1-1).

Table 2.1-1 Pakistan Coal Resources

Province /Coal Field

Seam Thickness (m)

Reserves (million tons) Status

Total Measured Indicated Inferred Hypothetical

SINDH 185,457 3,339 11,635 53,346 114,137

Lakhra 0.3-3.3 1,328 244 629 455 Developed

Sonda-Thatta 0.3-1.5 3,700 60 511 2,197 932 Not Developed

Jherruk 0.3-6.2 1,823 106 810 907 Not Developed

Ongar 0.3-1.5 312 18 77 217 Not Developed

Indus East 0.3-2.5 1,777 51 170 1,556 Not Developed

Meting-Jhumpir 0.3-1.0 161 10 43 108 Developed

Badin 0.55-3.1 850 150 0 200 500 Not Developed

Thar Coal* 0.2-22.8 175,506 2,700 9,395 50,706 112,705 Not Developed

BALOCHISTAN 217 54 13 134 16

Barkhan-Chamalang 0.3–2.0 6 1 5 Developed

Duki 0.2–2.3 50 14 11 25 Developed

Mach Abegum 0.6–1.3 23 9 14 Developed

Sor Range - Deghari 0.3-1.3 50 15 19 16 Developed

Pir Ismail Ziarat 0.4–0.7 12 2 2 8 Developed

Khost-Shahrig-Harnai 0.3–2.3 76 13 63 Developed

PUNJAB 235 55 24 11 145

Makarwal 0.3–2.0 22 5 8 9 Developed

Salt Range 0.15–1.2 213 50 16 2 145 Developed

KP 90 1.5 4.5 84.0 0.0

Hangu/Orakzai 0.43–0.6 81.5 1.0 4.5 76.0 Developed

Cherat/Gulla Khel 0.8–1.2 8.5 0.5 8.0 Developed

Azad Kashimir 9 1 1 7 0

Kotli 0.25 – 1.0 9 1 1 7 0 Developed

Total Original

Table 186,007 3,450 11,677 56,582 114,298

Source: Geological Survey of Pakistan

Measured Reserves: having a high degree of geological assurance,;coal lies within a radius of 0.4 km from a point of coal measurement.

Indicated Reserves: having a moderate degree of geological assurance; coal lies within a radius of 0.4 km to 1.2 km from a point of coal measurement.

Inferred Reserves: having a low degree of geological assurance; coal lies within a radius of 1.2 km to 4.8 km from a point of coal measurement.

Hypothetical Resources: undiscovered coal resources and are generally extension of inferred reserves in which coal lies beyond 4.8 km from a point of coal measurement.

Coal production in Pakistan is either sub-bituminous or lignite, which is distributed widely over

the country. Pakistan coal production reached 4.87 million tons in fiscal year 2005-06 and is

stable in the 3.5 million-ton level recently. According to GoP, about 85%–89% (fiscal year


2 - 11

2006-07) of the total production were from small- and medium-sized private businesses.

Please refer to Table 2.1-2 and Figure 2.1-5 for the coal production per coalfield.

Table 2.1-2 Coal Production by Coalfield

Province/Field 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 ACGR

BALOCHISTAN:

Sor Range 122,471 119,276 117,681 115,802 101,715 101,989 -3.6% Degari 47,257 48,229 43,175 41,632 36,419 22,305 -13.9% Sharigh 265,804 199,153 184,989 140,370 169,793 193,671 -6.1% Sinjidi 121,413 138,009 120,515 117,118 114,020 73,614 -9.5% Mach 307,539 294,642 293,340 236,274 185,574 131,158 -15.7% Harnai-Khost- Nasaka-Zardalu 169,086 122,783 93,931 103,358 102,702 112,024 -7.9% Duki 531,929 508,362 564,944 469,524 226,325 211,941 -16.8% Pir Ismail Ziarat 366,090 337,586 318,166 294,567 176,808 156,340 -15.6% Abegum 27,380 14,928 11,697 17,623 6,623 28,839 1.0% Barkhan/Chamalong 48,321 520,185 521,041 383,034 310,178 Sub-Total 1,958,915 1,831,289 2,268,623 2,057,309 1,503,013 1,342,059 -7.3%PUNJAB: Makerwal/Salt Range 573,684 508,168 553,453 571,493 591,420 620,245 1.6% Sub-Total 573,684 508,168 553,453 571,493 591,420 620,245 1.6%SINDH: Lakhra * 981,250 1,038,926 825,860 1,189,211 1,097,348 Jhimpir * 18,652 19,936 14,666 10,820 3,152 Sub-Total 2,010,000 999,902 1,058,862 840,526 1,200,031 1,100,500 -11.3%KPK/FATA. Makerwal/Gulakhel/ 328,560 303,504 242,969 52,969 56,424 85,566 -23.6% Kohat, FATA 215,825 129,786 301,721 Sub-Total 328,560 303,504 242,969 268,794 186,210 387,287 3.3%

Total:Tonnes 4,871,159 3,642,863 4,123,907 3,738,122 3,480,674 3,450,091 -6.7%

TOE 2,179,357 1,629,817 1,845,036 1,672,436 1,557,254 1,543,571

Annual growth rate 6.20% -25.22% 13.21% -9.35% -6.89% -0.88% Source: Pakistan Energy Yearbook 2011

Source: Pakistan Energy Yearbook 2011

Figure 2.1-5 Coal Production by Coalfield


2 - 12

For fiscal year 2010-11, 54.3% of consumption for domestic and imported coal was from

cement industry, 38.9% from brick factories, 5.6% from iron making (all imported), and only

1.2% from the power industry. Sindh government has intended to develop a large-scale mine

in Thar coalfield to supply coal for power generation with the help of private enterprises,

including those from overseas under a legally and financially-assisted project. Please refer to

Table 2.1-3 and Figure 2.1-6.

Table 2.1-3 Coal Consumption in Pakistan

Sector 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 ACGR

- 994 1,000 813 - -

445 447 364

4,221,825 3,277,472 3,760,707 3,274,789 3,005,192 3,003,603 -6.6%

1,888,845 1,466,341 1,682,540 1,465,141 1,344,523 1,343,812

2,778,379 4,140,986 5,720,972 3,801,751 4,577,007 4,187,935 8.6%

1,722,646 2,682,255 3,721,727 2,427,497 2,937,538 2,681,567

564,450 310,209 465,968 1,200,000 430,822 429,123 -5.3%

371,352 204,087 306,560 789,480 283,438 282,320

149,334 164,397 162,200 112,520 125,482 96,488 -8.4%

66,812 73,551 72,568 50,341 56,141 43,169

Total: Tonnes 7,713,988 7,894,058 10,110,847 8,389,873 8,138,503 7,717,149 0.0%

TOE 4,049,654 4,426,678 5,783,844 4,732,823 4,621,639 4,350,868

Annual growth rate -2.28% 2.33% 28.08% 17.02% -3.00% -5.18%Note: Sectiral consumption data of coal is mostly not available, except for power sector and has, threrfor, been estated.*: Estimated by deducing other uses of indigenous coal from the total production.**: Include indigenous as well as imported coal.***.Imported coal/coke used as coke in Pak Steel Source: Cement Factories, DG(Minerals), FBS, Pak Steel,PMDC, WAPDA

Unit: TonsTOE

Domestic

Brick-Kiln Industry*

Cement / Other Industry**

Pak Steel***

Power (WAPDA)


Note: Sectiral consumption data of coal is mostly not available, except for power sector and has, threrfor, been estated.*: Estimated by deducing other uses of indigenous coal from the total production.**: Include indigenous as well as imported coal.***.Imported coal/coke used as coke in Pak Steel

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Brick-Kiln Industry*Cement / Other Industry**Pak Steel***Power (WAPDA)Total


Figure 2.1-6 Coal Consumption


2 - 13

Imported coals are used mainly at steel mills and cement factories in Pakistan, and not in

power stations. Please refer to Table 2.1-4. Heating Value is estimated at 6,580 Kcal/kg.

The quality of Pakistan coal is based on many different analysis data by reports. Generally

speaking, Balochistan coals have higher heating value, lower total moisture and higher total

sulphur content than Sindh coals. Thar coal shows lower total sulphur content than Lakhra

coal. This quality means that it is a suitable fuel for thermal generation. Badin coalfield will be

newly explored; thus, quality data will be changed in the future. Please refer to Table 2.1-5.

Table 2.1-5 Coal Quality of Coalfields in Pakistan

MoistureVolatileMatter

FixedCarbon

Ash Total Sulphur

SINDH

Lakhra 9.7 - 38.1 18.3 - 38.6 9.8 - 38.2 4.3 - 49 1.2 - 14.8 LigB to SubC 5,503 - 9,158 3,057 - 5,088 1,112,406

Sonda-Thatta 22.6 - 48.0 16.1 - 36.9 8.9 - 31.6 2.7 - 52.0 0.2 - 15.0 SubC to hvBb 8,878 - 13,555 4,932 - 7,531 -

Jherruk SubC to hvCb 8,800 - 12,846 4,889 - 7,137 -

Ongar LigB to SubA 5,219 - 11,172 2,899 - 6,207 -

Indus East LigA to SubC 7,782 - 8,660 4,323 - 4,811 -

Meting-Jhumpir 26.6 - 36.6 25.2 - 34.0 24.1 - 32.2 8.2 - 16.8 2.9 - 5.1 LigA to SubC 7,734 - 8,612 4,297 - 4,784 -

Badin* 15.4 - 29.8 29.8 - 39.8 31.0 - 36.3 8.2 - 14.6 3.4 - 7.4 6,740 - 11,100 3,744 - 6,167 -

Thar Coal 29.6 - 55.5 23.1 - 36.6 14.2 - 34.0 2.9 - 11.5 0.4 - 2.9 LigB to SubA 6,244 - 11,045 3,469 - 6,136 -

BALOCHISTAN

Barkhan-Chamalang 1.1 - 2.9 24.9 - 43.5 19.4 - 47.1 9.1 - 36.5 3.0 - 8.5 hvCb to hvAb 12,500 - 14,357 6,944 - 7,976 NA

Duki 3.5 - 11.5 32.0 - 50.0 28.0 - 42.0 5.0 - 38.0 4.0 - 6.0 SubB to hvAb 10,131 - 14,164 5,628 - 7,869 278,518

Mach Abegum 7.1 - 12.0 34.2 - 43.0 32.4 - 41.5 9.6 - 20.3 3.2 - 7.4 SubA to hvCb 11,110 - 12,937 6,172 - 7,187 317,004

Sor Range -Deghari

3.9 - 18.9 20.7 - 37.5 41.0 - 50.8 4.9 - 17.2 0.6 - 5.5 SubA to hvBb 11,245 - 13,900 6,247 - 7,722 279,564

Pir Ismail Ziarat 6.3 - 13.2 34.6 - 41.0 19.3 - 42.5 10.3 - 37.5 3.2 - 7.4 SubA to hvCb 10,786 - 11,996 5,992 - 6,664 384,108

Khost-Shahrig-Harnai 1.7 - 11.2 9.3 - 45.3 25.5 - 43.8 9.3 - 34.0 3.5 - 9.55 SubB to hvAb 9,637 - 15,499 5,354 - 8,611 227,784

PUNJAB

Makarwal 2.8 - 6.0 31.5 - 48.1 34.9 - 44.9 6.4 - 30 8 2.8 - 6.3 SubA to hvAb 10,688 - 14,029 5,938 - 7,794 47,928

Salt Range 3 2 - 10.8 21.5 - 38.8 25.7 - 44.8 12.3 - 44.2 2.6 - 10.7 SubC to hvAb 9,471 - 15,801 5,262 - 8,778 221,964

NWFP

Hangu/Orakzai 0 2 - 2.5 16.2 - 33.4 21.8 - 49.8 5.3 - 43.3 1.5 - 9.5 SubA to hvAb 10,500 - 14,149 5,833 - 7,861 77,000

Cherat/Gulla Khel 0.1 - 7.1 14.0 - 31.2 37.0 - 76.9 6.1 - 39.0 1.1 - 3.5 SubC to hvAb 9,388 - 14,171 5,216 - 7,873 36,006

Azad Kashimir

Kotli 0 2 - 6.0 5.1 - 32.0 26.3 - 69.5 3.3 - 50.0 0.3 - 4.8 LigA to hvCB 7,336 - 12,338 4,076 - 6,854 .

hvAb =high volatile A bituminous coal ASTM =American Society For Testing and Materials

hvBb =high volatile B bituminous coal To convert Btu to Kcal/Kg multiply by 0.556.

hvCb =high volatile C bituminous coal To convert Kcal /Kg to Btu/lb multiply by 1.798

Average AnnualProduction 2000-

2001 (tonnes)

9.0 - 39.5 20.0 - 44.2 15.0 - 58.8 5.0 - 39.0 0.4 - 7.7

Coal Quality Proximate Analysis (in percent)Rank ASTM

ClassificationHeating Value

(mmmf) Kcal/kgHeating Value (mmmf) Btu/lb

Province / Coal Field

Source: Geological Survey of Pakistan (June 30, 2011), Badin*: Sindh Coal & Energy Department, GoS 2010

Table 2.1-4 Import of Coal in Pakistan

Unit 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Tons 2,842,829 4,251,195 5,986,940 4,651,751 4,657,829 4,267,058

TOE 1,870,297 2,796,861 3,938,808 3,060,387 3,064,386 2,807,297

Import value (Million Rs.) 9,248 15,720 36,210 47,321 34,937 44,832

Annual growth rate of imports -14.04% 49.54% 40.83% -22.30% 0.13% -8.39%



2 - 14

2.1.5 Laws or Regulations Related to Coal Development

In Pakistan, coal development works are under the discretion of the provincial governments.

Therefore, the laws and regulations related to coal development are established by each

province.

Table 2.1-6 Broad Terms for Mineral Titles, Sindh Province

Category Size Validity

Period

(Years)

Renewals Record & Report Remarks

Reconnaissance

License

Not more

than 100

km2

Not

exceeding

12

months

Within 60 days after the end of the period of

license

Exploration

License

Not more

than 1,000

km2

Not

exceeding

3 years 2

Quarterly report within 15 days after the end

of each quarter.

A summary report within 60 days after the

end of the period of such exploration license

Mineral Deposit

Retention License

300 km2 Not

exceeding

2 years

1

Within 30 days after the end of the period of

licence (a report containing an evaluation of

the prospects and economical viability of

future mining operations in the retention

area)

Within 60 days after the end of the period (an

application for the renewal of the mineral of

deposit retention license or a mining lease)

To carry out the

proposal for future

mining operations

Mining proposals

are made in

writing to the

licensing authority

Mining Lease Not

exceeding

250 km2

Not

exceeding

30 years

Source: Sindh Mining Concession Rule, 2002

Remarks

1: Within 30 days, renewal of mining lease should be made accordingly.

2: Work is carried out within a particular time period in accordance with the scheduled program as may be specified in the license.

3: Exploration shall be valid for such period not exceeding 2 years as may be specified in the license and for additional period if

any renewal thereof.

4: After mine leasing, the holder shall commence mining operations within 6 months in accordance with the approval plan.


2 - 15

Table 2.1-7 Application Fees (Sindh Mining Concession Rules, 2002)

Title/Concession Rupees Equiv. US$ Equiv. Yen

Reconnaissance License 15,000 156.90 12,295

Exploration License 25,000 261.51 20,492

- First Renewal 50,000 523.01 40,984

-Second Renewal 50,000 523.01 40,984

- Amendment 10,000 104.60 8,197

Mineral Deposit Retention License 100,000 1,046.03 81,967

-Renewal 100,000 1,046.03 81,967

-Amendment 20,000 209.21 16,393

Mining Lease 100,000 1,046.03 81,967

-Renewal 100,000 1,046.03 81,967

-Amendment 20,000 209.21 16,393


Note: Exchange rate US$=Rp 95.6, Yen=Rp 1.22(Oct 12, 2012)

Table 2.1-8 Annual Rental Fee

Category Period Rental Fee (per/km2) (Years)

Rupees Equiv. US$ Equiv. Yen Term of License

Reconnaissance License Year 1-3 10,000 104.60 8,197

Exploration License Year 1-3 15,000 156.90 12,295

-First Renewal Year 1 1,500 15.69 1,230

Year 2 2,000 20.92 1,639

Year 3 2,500 26.15 2,049

-Second Renewal Year 1 4,000 41.84 3,279

Year 2 5,000 52.30 4,098

Year 3 6,000 62.76 4,918

Mineral Deposit Retention License Year 1-3 10,000 104.60 8,197

- Renewal Year 1 6,000 62.76 4,918

Mining Lease Term of Ease 10,000 104.60 8,197

- Renewal Renewal Period 6,000 62.76 4,918


Note: Exchange rate US$=Rp 95.6, Yen=Rp 1.22(Oct 12, 2012)


2 - 16

2.2 Thar Coalfield

2.2.1 Exploration History

The first indication of the presence of coal beneath the sands of the Thar Desert was reported

while drilling water wells by the British Overseas Development Agency (ODA) in 1991. The

coalfield, with a resource potential of 175.5 billion tons of coal, covers an area of 9000 km2 in

the Tharparker District based on the GSP and USAID exploration drilling works. Studies made

so far on the development of Thar coal such as those by J.T. Boyd in 1994, RWE of Germany

in 2002, Shenhua of China in 2004 elucidated that the Thar coal deposit could be operated

through open cut mining9.

Global Mineral Company of China

signed an MoU for Block I Coal

Development and Power

Generation with the Government of

Sindh on September 19, 2011. The

Engro Group and the Government

of Sindh established the joint

venture company, Sindh-Engro

Coal Mining Company (SECMC) for

developing Block II. The final

bankable feasibility study was

completed on August 31, 2010. For

Block III, Cougar Energy (UK) is

processing the desktop study. The

Pakistani government is going to

carry out the Underground Coal

Gasification Project in Block V. For

Block IV, Oracle coalfields PLC (UK)

is in the process of geotechnical

drilling and ESIA completion. Other blocks, Block VII to Block XII, are available for investment.

2.2.2 Geological Setting

The Thar coalfield area is covered by sand dune that extends to an average depth of over 80

m and rests upon a structural platform in the eastern part of the desert. This platform is

9 GSP paper

Figure 2.2-1 Location Map of Thar Coalfield, Sindh, Pakistan

Source: Thar Block II Coal Mining Project, BFS by SECMC 2010


2 - 17

underlain by relatively shallow granite basement rock. It shows that the granite basement

complex dips down abruptly beneath the western part of the Thar Desert and is highly faulted

there. The generalized stratigraphic sequence in the Thar coalfield area is shown in Figure

2.2-2. It comprises of basement complex, coal-bearing Bara formation of Paleocene to early

Eocene Age, alluvial deposits of sub-recent age, and sand dune of recent age.

There are not any coal outcrops in the Thar coalfield area due to thick sand dune and

sub-recent alluvial sedimentary rocks. All the geological information have been obtained

through drilling. Coal is found in the Bara formation of Paleocene - Eocene Age and is present

just below the sub-recent deposits. A number of coal seams are present in the area (Figure

2.2-3). The coal beds of variable thickness ranging from 0.20 m to 22.81 m are developed.

The maximum number of coal seams found in some of the drill holes is 20. The cumulative

thickness of the coal beds ranges from 0.2 m to 36 m (IEA 2004).

A large coalfield, having a resource potential of about 175 billion tons, has been discovered at

Thar in the eastern part of Sindh Province about 400 km southeast of Karachi. The coalfield

extends over 9100 km2. Out of this area, 12 blocks are developed (Block I to XII) in 1432 km2

with total coal reserves of 39.78 billion tons. The first four blocks were developed by GSP in

association with USGS. Eight blocks were developed by China North East Coalfield

Geological Survey Bureau and six blocks through Deep Rock Drilling Pvt Ltd. Pakistan.

The main coal seam thickness ranges from 12 m to 21 m at an average depth of 170 m with

the upper 50 m being loose sand (sand dune). The quality of coal has been examined by

chemical analyses of 2000 samples or more. Based on the analyses, the rank of the coal was

defined as ranging from lignite B to lignite A.

The weighted averages of chemical contents measured from the coal samples from the entire

Thar coalfield are as follows:

Moisture (AR) 46.77%; Volatile Matter (AR) 23.42%; Fixed Carbon (AR) 16.66%; Ash (AR) 6.24%; Sulphur (AR) 1.16%; Heating Value 5,774 Btu/lb (3,208 kcal/kg);

Note: AR: as received base Dry: dry based


2 - 18

Formation Age Thickness Lithology

Sand Dune Recent 14 m to 93 m Sand, silt and clay

-----------------------------------------------Unconformity-----------------------------------------------

Alluvial Deposits Sub-recent 11 m to 209 m (variable)

Sandstone, siltstone

-----------------------------------------------Unconformity-----------------------------------------------

Bara Formation Paleocene to Early Eocene

+52 m (variable)

Claystone, shale, sandstone, coal, carbonaceous claystone

-----------------------------------------------Unconformity-----------------------------------------------

Basement Complex

Pre-Cambrian

Granite and quartz diorite.


Figure 2.2-2 Stratigraphic Sequence in the Thar Coalfield

The color of the coal is generally brown to brownish black. Thar coal is slightly banned and

cleared. Resins of different colors ranging from greenish yellow to dark brown are present.

Pyrite is present as fine grains. Some numbers of coal seams are present.

Detailed development status of Thar coalfield is discussed in Chapter 3.


2 - 19

Figure 2.2-3 Blocks, Cumulative Thickness, and Cross Section Line in Thar Coal Blocks

A-B: Cross Section Line

Base Map: Coal Resources of Four Blocks in Thar Coalfield, Sindh, Pakistan, Geological Survey of Pakistan


2 - 20


Figure 2.2‐4 Generalized Cross Section through Block I, IV,II and III Thar Coal Blocks

Source: Prepared by JICA Survey Team referring to U.S. Department of Interior/U.S. Geological Survey Open-File Report 94-167

Figure 2.2‐5 Representative Borehole Sections in Thar Coalfield


2 - 21

Source: Prepared by JICA Survey Team

Figure 2.2‐6 Location of Borehole Sections in Thar Coalfield


2 - 22

Photo 2.2-1 Mining Area of Block II Photo 2.2-2 Mining Area of Block II

Photo 2.2-3 Rescue Center in Thar Photo 2.2-4 Underground Gasification in Block V

First Gas-blow up Hole

Photo 2.2-5 Underground Gasification

Gas and Air Piping

Photo 2.2-6 Underground Gasification

Drilling the Hole


2 - 23

2.2.3 Meteorology and Hydrology

(1) Meteorology

Thar Desert has a semi-arid climate with a short monsoon period. Rainfall is often

concentrated in a period of two or three days. Drought year recurs every third year. In general,

annual rainfall is 100 mm to 200 mm. The minimum annual rainfall is 24.6 mm and the

maximum is 1500 mm recorded in 1991 and 2011, respectively.

Average monthly rainfall and temperature in 30 years between 1979 and 2008 are shown in

Figure 2.2-7. In summer, it is extremely hot during the day; on the other hand, nights are

bearable.

The characteristics of rainfall are as follows:

Rainfall is concentrated during monsoon from July through September;

Individual monthly rainfalls can be as high as 500 mm while daily rainfalls can show value up to around 100 mm.

The characteristics of temperature are as follows:

The hottest month is May and June. The coldest month is January. Daily maximum temperatures may be as high as 50°C in May and June;

The average yearly temperature is around 26°C.

Climate in Thar Desert (1979-2008)

0

10

20

30

40

50

60

70

80

90

100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Rai

nfal

l (m

m))

0

5

10

15

20

25

30

35

40

45

50T

empe

ratu

re(°

C)

RainfallTemperature

Source: Sindh Engro Coal Mining Company (2010)

Figure 2.2-7 Average Monthly Rainfall and Temperature 1979–2008

(2) Hydrology

1) Surface Water

The main water sources in Sindh Province are surface run-off irrigation channels and


2 - 24

groundwater. However, surface water is not present in Thar Desert. The nearest rivers and

channels, located in Indus River valley, to Thar Desert run about 120 km west. The absence

of river channels in the area makes it difficult to discharge any pumped groundwater or surface

water; therefore, a pipeline for disposal of waters is necessary.

Rann of Kutch, a seasonal salt marsh located in Thar Desert, extends over Pakistan and India,

and covers a huge area of about 30,000 km2. The salt lakes and pans existing in the south

border of Sindh Province are filled with rainwater during the rainy season.

Heavy rainfall sometimes brings extreme floods. In mid-August 2011, heavy monsoon rains

caused considerable damages to Sindh, eastern Balochistan and southern Punjab. Mithi in

Thar Desert received a record rainfall of 1290 mm during the spell. An estimated 434 people

died, and 5.3 million people and 1,524,773 homes suffered in these areas (The Express

Tribune, 2011). Such floods often cause the death of thousands of cattle and also severely

endanger the local population in Thar Desert.

2) Regional Groundwater

The Thar coalfield area has at least three aquifers, i.e., Sand Dune Aquifer, Coal Seam Roof

Aquifer (Sub-recent Aquifer), and Coal Seam Floor Aquifer (Footwall Aquifer). Coal Seam

Floor Aquifer is the main aquifer in this region. Most of the people in Thar Village use the

groundwater in Sand Dune Aquifer for their consumption both for domestic purposes and

cattle. The details are presented in Chapter 3.4 - Hydrogeology.

Although the groundwater in Sand Dune Aquifer is recharged by rainfall, the groundwater in

the other two aquifers flow in from the Indian side where the sediments subcrop beneath the

sand dune about 200 km to the northeast of the Thar Coalfield.

Salt lakes and pans in Rann of Kutch may be connected to the groundwater. Figure 2.2-8

shows the bird’s eye view of geography and geology in the survey area with regional

groundwater direction. The regional groundwater generally flows along surface slope from

northeast to southwest.

In Nagarparker located in the southeast boundary of Pakistan, there are two perennial springs

named Anchleswar and Sardharo, and two temporary streams called Bhetiani River and

Gordharo River. Adequate water flow is noted after the rain in these rivers (Environmental

Management Consultants, 2012).


2 - 25

Source: JICA Survey Team (Base Map: Geological Survey of Pakistan and NASA)

Figure 2.2-8 Bird’s Eye View of Geography and Geology in the Study Area with Regional Groundwater

Direction


2 - 26

2.2.4 Coal Recourses and Reserves

Coal resources and reserves for block I to block XII are summarized in Table 2.2-1.

Table 2.2-1 Exploration Situation and Coal Resources

Block Allocated Investors

Exploring Agency

Classification System

Period Total Drill

Holes

Area (km2)

Resources (million tonnes) Measured Indicated Inferred Total < 0.4km 0.4-1.2km 1.2-4.8km

I Sino Sindh Resources

GSP GESCR 1994-1995 41 122 620.42 1,918.06 1,028.43 3,566

Rheinbraun Engineering (Germany)

USGS 2003 30 40 588.035 403.351 11.934 1,003

II Sindh- Engro

GSP GESCR 1994-1995 26 + 17 55 640 944 - 1,584

Engro USGS 2010 113 79.6 1,216 1021 114 2,351

Engro JORC-AusIMM 2010 113 79.6 425 1392 423 2,240

III-A Couger GSP GESCR 1995-1996 41 99.5 412.75 1,337.01 258.28 2,008

III-B GSP GESCR 2007-2008 14 76.8 225.94 938.91 288.33 1,453

IV GSP USGS 1996-2001 42 82 684.09 1,711.28 176.14 2,571

V UCG

Project CNCGB GESCR 2005-2006 35 63.5 637 757 - 1,394

VI Oracle

Coalfields

CNCGB GESCR 2005-2006 35 66 762 893 - 1,655

Oracle JORC 2008 7 66 653.000 770 - 1,423

VII DRD USGS 2008-2009 52 100 572.28 1,514.51 89.15 2,175

VIII DRD USGS 2008-2009 58 100 882.81 2,131.36 21.68 3,035

IX DRD USGS 2009-2010 50 100 661 2,048 152 2,862

X DRD JORC 2011 45 100 857.8 1,265.59 747.23 2,870

XI DRD USGS

2012 31 101.46315.6 1,014.28 282.17 1,612.05

JORC 449.38 669.04 467.37 1,585.79

XII DRD USGS

2012 31 100.74510.01 1,755.85 79.74 2,345.60

JORC 737.17 1,309.33 243.90 2,046.50

Total 1432 39780

Source: TCEB

2.2.5 Quality

Coal qualities for Blocks I to XII are summarized in Table 2.2-2.

Table 2.2-2 Coal Qualities for Blocks I to XII

Block Area (km2)

Total Reserves

(billion ton)

Moisture(%)

Ash (%)

Vol. Matter(%)

Sulphur(%)

Heating Value (As Received)

(Btu/lb)

Fixed Carbon

(%)

I 122.0 3.56 43.13 6.53 30.11 0.92 6,398 20.11II 79.6 2.24 47.89 7.37 25.15 1.12 5,008 19.68

III-A 99.5 2.00 45.41 6.14 28.51 1.12 6,268 19.56III-B 76.8 1.45 47.72 9.30 25.49 1.15 4,808 16.79IV 82.0 2.47 43.24 6.56 29.04 1.20 5,971 21.13V 63.5 1.39 46.82 8.92 30.24 1.20 5,682 13.26VI 66.1 1.65 46.80 5.89 29.34 0.90 5,727 16.6VII 100.0 2.17 48.27 8.03 25.30 1.16 5,440 25.30VIII 100.0 3.03 49.57 7.78 24.32 1.44 5,302 18.10IX 100.0 2.86 48.60 5.92 29.03 0.96 5,561 15.73X 100.0 2.87 48.99 6.35 30.79 1.17 4,840 13.54XI 101.0 1.61 49.97 8.07 24.16 1.61 5,228 17.26XII 100.0 2.34 50.82 5.71 25.00 1.11 5,459 17.26

Source: Mines & Minerals Development Department, Government of Sindh


2 - 27

2.3 Other Coalfields in Sindh

2.3.1 Lakhra Coalfield

The Lakhra Coalfield, located in Dadu District, Sindh, lies 16 km to the west of Khanot Railway

Station of the Pakistan Railways, and covers an area of approximately 200 km2. The location is

well connected to Hyderabad and Karachi through roads and railways. Mining in the area is

done by underground method. Three coal seams are established in the field, however,

generally only the middle seam, known as Lailian Seam, possesses the necessary

persistence and thickness for consideration in large-scale mining (Figure 2.3-1). Lakhra

coalfield is being operated by 20 to 25 private and two public companies, namely, Pakistan

Mineral Development Corporation (PMDC) and Lakhra Coal Development Company (LCDC),

which is the joint venture of PMDC, Sindh government, and WAPDA.

The largest coal mine company in the coalfield is LCDC which was set up to supply the coal to

Lakhra Power Generation Company. The coals are produced from about 90 underground pits,

and sold at a fixed price of approximately Rs.3300 per ton, while other coal companies sell

their coal at market price. Private coal companies employ a lot of labourers to increase their

production with high wage when the price of coal goes up, normally during the period of

working the brick kilns. Labourers can earn more at other local private mines, and many men

leave at short notice from the public sector’s mines (IEA 2004).

Source: A.H. Kazmi and R.A. Sidiqi – Significance of the Coal Resources of Pakistan

Figure 2.3-1 Generalized Cross Section of Lakhra Coalfield


2 - 28

After the first discovery of coal in 1853, as aforesaid, many geological investigations had been

done in the Lakhra area by both national and international organizations. A large-scale

exploration of coal for power generation began in the early 1960s when GSP and USGS

performed a systematic geological investigation of the area. The West Pakistan Industrial

Development Corporation (WPIDC)’s tests found Lakhra coal unsuitable for hard coke

production, but suitable for power generation. In 1996, WPIDC engaged a Polish firm to

undertake a mining and power generation feasibility study utilizing the Lakhra coal. In 1978,

JICA carried out additional technical and financial and economical feasibility studies. In 1981,

JICA concluded that a 300-MW power generation plant can be technically feasible; however,

the financially estimated coal production cost is very high. Then, GoP asked USAID to review

all studies on Lakhra and to assess the establishment of the coal thermal power station.

USAID completed the feasibility study in 1986, in which they concluded that utilizing Lakhra

coal for two units of 250 MW power plants is technically, socially and environmentally feasible

(PMDC Coal Mines Internship Report Jan 2012). However, GoP finally selected the fluidized

bed combustion (FBC, 50 MW x 3) from Chinese Dongfang Electric Corporation (DEC) with

supplier’s credit. These three FBCs were completed in 1995.

Lakhra coal is associated with the Bara Formation of late Paleocene Age. The stratigraphic

sequence is predominantly marine sediment, but also includes lacustrine, estuarine, deltaic

and lagoonal deposits containing plant fossils and carbonaceous beds at several horizons.

The beds have been affected by orogenic movements of different intensities during different

times, resulting in the warping, faulting and dislocation of coal seams.

Table 2.3-1 Factors on Each Seam in Lakhra Coalfield

Dhanwari Seam Lalian Seam Katih Seam

Coal Seam Depth 43 m– 90 m 27 m– 123 m

Area or Distance Confirmed

17.61 km2 68.8 km along the long

crest of Lakhra Anticline6.12 km2

Thickness max 2.94 m 1.0m – 3.80m max 1.4 m Ash 14.5% – 24.5% 10.8% – 27.4% 22.1% VM 39.8% – 47.6% 37.3% – 45.1% 43.5% FC 32.2% – 40.0% 32.3% – 38.3% 34.6% TS 6.9% – 8.5% 2.3% – 8.3% 9.8%

Heating Value 10,910 Btu/lb

(6,060 kcal/kg)

Source: PMDC Report

The coal beds at Lakhra have been gently folded by an anticline. Nearly all the coal occurs at

depth of 50 m to 450 m from surface in gently dipping strata. A large number of coal seams

have been encountered in boreholes, only three of them are significant and have been named

as Dhanwari, Lailian, and Kath. The Lakhra coal is dull black and contains amber resin flakes.


2 - 29

It tends to crumble on larger exposures and is often susceptible to spontaneous combustion.

The Lakhra coal ranges from

lignite A to sub-bituminous C.

The gross heating value ranges

from 2,570 kcal/kg to 4,260

kcal/kg.

Mining in Lakhra area is done

manually underground. The

extracted coals are put into

small bags for lifting to the

ground level by motor-driven

winch, which is also equipped

with a small-scale ventilation

fan. The mine of LCDC consists

of one vertical shaft and 6 or 7

inclined shafts normally. One

mining team, consisting of 12

labourers, produces 24 tons per

day.

In 2007, the LCDC had 44

mines which were fully developed and had production capability of 40-50 tons per day per

mine. The additional 39 mines were under development (PakMintPet 2007).

Based essentially on the results of the initial exploratory work done by the GSP, more detailed

exploration has been subsequently undertaken by PMDC, JICA, WAPDA, and USAID. The

total reserves of the deposit have been estimated to be 1,328 million tons of which 244 million

tons are measured, 629 million tons are indicated, and 455 million tons are inferred.

Average annual production of coal from Lakhra is over one million tons. Most of this production

should be used in the WAPDA power plant at Khanote (Lakhra Power Plant), Sindh and in the

brick kiln industry.

Exploration and evaluation of North Lakhra coalfield have been sponsored with estimated cost

of Rs.38.516 million. The study is at the exploration stage. (Sindh Coal Authority, December

12, 2003)

Figure 2.3-2 Generalized Stratigraphy of Workable coal seams


2 - 30

Photo 2.3-1 View of Lakhra Coalfield Photo 2.3-2 Vertical Shaft at Lakhra Coalfield

Photo 2.3-3 Winch for Coal Lifting up through Vertical

Shaft

Photo 2.3-4 Entrance of Inclined Shaft

Photo 2.3-5 Inside of Inclined Shaft

(Incline of 35 degrees)

Photo 2.3-6 Small Ventilation Fan for Underground

Mining

Inclined shaft Vertical shaft


2 - 31

2.3.2 Sonda - Jherruk Coalfield

Sonda - Jherruk coalfield was discovered by GSP/USGS in 1981. From 1986 to 1989, GSP

drilled 80 holes in the area, which covers an area of 1500 km2. The drilling data indicates that

the accumulated coal bed is about 6.2 m thick, the maximum thickness of one coal seam is 3.3

m in Jherruck, and the overburden is about 120 m at the mineable seam. The total coal

reserves are estimated at 7,773 million tons, of which 147 million tons are considered as

mineable (Pakistan Coal Power Generation Potential by PPIB June 2004).

Sonda - Jherruk coalfield consists of four areas, namely: Sonda/Thatta, Jherruck, Ongar, and

Indus East. Table 2.3-2 shows elements of each area in Sonda - Jherruck. The rank of coal is

lignite A.

Table 2.3-2 Elements of Each Area in Sonda - Jherruck

Block Sonda- Thatta

Jherruck Ongar Indus East Total

Area (km2) 635 300 65 500 1,500

Boreholes 26 30 6 18 80

Coal Seam Thickness (average m)

0.9 3.3 1.3 1.6

Coal Resources (million tons)

measured 60 106 18 51 235

Total 3,700 1,823 312 1,777 7,612

Coal Rank ligA~subC ligA~subC ligA~subC ligA~subC

Moisture (%) 28.40 31.15 - 46.90

Ash (%) 15.70 15.70 15.70 6.50

Volatile Matter (%) 27.90 28.12 27.90 22.60

Fixed Carbon (%) 25.20 24.96 25.20 21.88

Total Sulphur (%) 2.60 2.68 2.60 3.81

Heating Value (kcal/kg) 3,866 4,421 3,659 3,889

Source: Sindh Coal Authority [Coalfields of Sindh]

The coal seams in the upper zone, above the Sonda Seam in the geological columnar, are

termed as "Dhaduri Seams" whereas the name of "Jherruck Seams" is assigned to the coal

seams falling in the lower coal below the Sonda Seam (Ahmad and others, 1986).

Three other seams encountered only in drilling hole DH-20 are stratigraphically just above the

Sonda coal seam, in the middle coal zone and are named as “Inayatabad Seams”. The drilling

data indicates that in the Sonda coalfield, pinching and swelling of the lenticular coal beds are

pronounced which make the correlation of seams difficult. The beds are almost horizontal to

two degrees dipping towards the west. The beds plunge gently towards the south. The main


2 - 32

Sonda coal seam is considered to have a reasonable consistency in its extension, although it

could be discontinuous or change to carbonaceous shale, and wash out between the widely

spaced drill holes (Sindh Coal and Energy Department, GOS 2010).

The Sonda-Jherruk Coal Mine and Power Plant Project is currently being undertaken by

China National Machinery Import and Export Cooperation. The project consists of mine

development with annual production of 1.8 million tons and coal thermal power generation with

capacity of 3 x 135 MW. Total investment is US$760 million, in which mining and power plant

costs are allocated US$290 million and US$470 million, respectively. The development

schedule was not shown in the presentation pamphlet in November 2011.

Photo 2.3-7 Sonda Village Photo 2.3-8 Jherruk Area (China Team’s Exploration Area)

2.3.3 Badin Coalfield

A new coalfield is discovered at Badin located between Sonda-Jherruck and Thar coalfields.

The GSP and USGS carried out exploration works at Badin coalfield by drilling. First

information on Badin coal shows that the coal seam thicknesses are 0.2 m and 0.35 m at

depths of 78.18 m and 80.42 m, respectively. The Geological Survey of Pakistan reported coal

seam thickness of 0.55 m to 3.1 m and coal resources of 850 million tons as of June 30, 2011.

According to the Nation (a newspaper) dated June 2012, the coal resources of Badin are

1,785 million tons more than those of Lakhra Coalfield.

The Badin coal belongs to Paleocene Age confined to Bara Formation of the Ranikot Group

(Hunting Survey, 1961). Badin area is a flat area covered with alluvial deposits, completely

devoid of outcrops. The stratigraphic sequence as per Geological Survey of Pakistan shows

silt, clay and sand from 50 m to112 m with alluvium of sandstone, siltstone and mottled

claystone. Bara Formation is composed of sandstone, carbonaceous clay stone, and coal.

Coal is brackish, blight and dull in appearance, with occasional resin globules at present. It is


2 - 33

compactly massive to cleaved coal. The coal is separated into thin seams. The maximum

number of seams encountered is six. The average thickness of the coal seams ranges from

0.35 m to 2.98 m. The cumulative coal thickness of the coal seams ranges from 0.45 m to 7.17

m (Information Memorandum on Badin coalfields, District Badin, Province Sindh, Pakistan

Coal and Energy Development Department, Government of Sindh).

Table 2.3-3 Quality of Badin Coal

Moisture Volatile Matter

Fixed Carbon Ash Sulphur

Heating Value

Heating Value Coal Rank

% % % % % (Btu/lb) (kcal/kg)

15.4 to

29.8

29.8 to

39.8

31.0 to

36.3

8.2 to

14.6

3.4 to

7.4

6,740 to

11,100

3,744 to

6,167

Lignite A to Sub-bituminous

Source: Sindh Coal & Energy Department, GoS 2010

2.3.4 Lakhra Thermal Power Plant

(1) The Outline of the Lakhra Thermal Power Station

The Lakhra power station at Khanote was constructed by the EPC contractor of Dongfang

Electric Corporation in China. The type of boiler is FBC (Fluidized Bed Combustion) Boiler

licensed by Foster Wheeler (USA). Unit No.1 to No.3 started operations in 1995 to 1996.

The Lakhra power station (GENCO IV) is the one of subsidiary of The Pakistan Electric Power

Company Private Limited (PEPCO) named the Lakhra Power Generation Company Limited

(LPGCL).

The 800t/day coal is supplied from The Lakhra Coal Development Company Ltd. (LCDC) by

truck. The distance between the mine and the power station is about 20km.The water for the

station is supplied from the Indus River, where the intake of the water is constructed, through

the 2.5km underground pipe line. The located relation of the mine and the power station is

illustrated in the Figure 2.3-3. And the main characteristics of Lakhra Power Station is shown

in Table 2.3-4


2 - 34

Figure 2.3-3 Located Relation of Lakhra Coal Mine and Power Station

Table2.3-4 Main Characteristics of Lakhra Power Station

Item Unit No. 1 Unit No. 2 Unit No. 3

Start of Operations Jun.1995 Oct.1995 Jan.1996

Boiler Manufacturer Dongfang Boiler

Boiler Capacity(MCR) 220 t/hr

Steam Pressure 9.8MPa

Steam Temperature 514 °C

Turbine / Generator Manufacturer Dongfang Turbine/Dongfang Electric Machinery

Turbine Capacity 50 MW

Coal Ash in coal 19.52%(design)

Moisture in coal 32%(design)

Sulphur in coal 5.2%(design)

Water Supply Source and Volume 2.55m3/sec (9 cusec)

(from Indus river)

Condenser cooling Wet type cooling tower system

Source : Lakhra Power Station

(2) Operational Condition

The low availability and the low performance for all units have continued since commissioning

due to many technical problems. The comprehensive rehabilitation work for the boiler No.1 of

the plants started in 2006, and re-commissioned on March 2007. Then only the unit can be

operate on 35MW continuously. On the other hand, other 2 unit cannot operate anymore.

The key operational functions are shown in Table 2.3-5.

Indus River

P

Water Intake

Power Station

Transport by Truck 20t/car×40car=800t/day

Lakhra Coal Mine

20km

０

2.5km

Indus Highway


2 - 35

Table 2.3-5 Operation Data

Unit 2007-08 2008-09 2009-10

Gross Generation GWh 136 113 116

Send Output GWh 99 84 86

Auxiliary Consumption % 27 26 26

Maximum Load MW 42 37 38

Load factor % 37 35 35

Operating time hrs 3819 3506 3906

Total Number of Shutdown Time 17 18 17

Forced outage factor % 56 57 55

Availability factor % 17 18 15

Thermal efficiency(gross) % 21 24 23

Source : Lakhra Power Station

(3) Analysis on the low availability and accelerated deterioration of facilities

The operation of plants was started in1996, however the plants was old design concept such

as manual control system (no automatic control system) and usage of old type components

(Ref. Photo 2.3-9) compared with other plants installed in the period. In addition, the boilers

were ugly deteriorated, two units have not been able to operate any more in these five years.

Only one unit can be operated with comprehensive rehabilitation. The LPGCL makes the

comprehensive refurbishment plan again, which is estimated at about Rs.1.5 b for 3 Units.

The chief executive officer of the power station explained that the deterioration has been

caused by the higher sulphur and ash contents, that much exceed the design value of the coal.

Addition to the above, the JST assumes that the next two issues cause the rapid deterioration

form the technical point of view.

1) The ash erosion problem rerated the low quality of limestone

The relation between coal quantity and limestone is shown in Figure 2.3-4. The rated

design values of coal and limestone consumptions are 51.6t/h and 26.5t/h respectively

(blue line). Where the sulphur content is 5.0% of the coal, necessary volume of pure

limestone (100%) calculated as only 8.4t/h theoretically (green line). If sulphur content in

coal is 7%, 37.1 t/h of limestone (red line) is necessary. Counting backward, the purity of

the limestone is calculated at 35%, the remaining 65% is assumed metal oxide mainly such

as silica and alumina.

It was found that the evaporation tubes at the lower part of furnace are covered by

protecting plates. The area is the same part of fluidizing burning zone of coal and limestone.

The protecting plate (Ref. Photo 2.3-10), may reduce the volume of steam evaporation

eventually reduce the generation output. In consequence, maximum output of the unit can

generate 35MW only despite rated output 50MW.


2 - 36

The remaining material volume was calculated from molecular weight percentage in

limestone. The remaining material volume is 65% of 26.5t/h (rated volume of limestone),

17.2t/h. But then the coal ash weight is 20% of 51.6t/h (rated volume of coal), 10.3t/h, if ash

percentage increase from 20% to 30%, total ash weight increase 5t/h only. Consequently,

the low quality of limestone is assumed to affect the erosion of boiler tubes and ash

handling system because metal oxide such as silica and alumina is very hard material.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

25.8t/h 38.7t/h 51.6t/h

25MW（50%） 37.5MW（75%） 50MW(100%）

limestone(S 5%)

limestone(S 7%)

pure limestone

supply limit (design)

t/h


Figure: 2.3-4 Relation of Coal and Limestone Supply

2) The management of de-sulphurization rate and high sulphur in coal

As stated above, the purity of the limestone may be very low. Injected volume of limestone for

de-sulphurization shall be controlled in accordance with the sulphur content or purity of

limestone. However, since neither automatic control system nor SOx measurement system

are equipped, feeding volume of limestone is controlled manually in proportion of the coal

consumption. The lack of calcium in the limestone may induce the outbreak of the sulphurous

acid gas in the exhaust gas which causes various erosions and corrosions of equipment,

namely early deterioration of the boiler and the bag filter system.

Also the coal with high contents of sulphur, mixing with high moisture, cause deterioration on

coal handling system such as coal feeder, coal conveyer and coal crushers.

Strict management of sulphurous acid gas concentration introducing automatic control system

is recommended. Furthermore, utilizing the anti-sulphate material and the anti-erosion

material is recommended.

Volume of Limestone

Volume of Coal


2 - 37



Photo 2.3-9 Obsolete Local Distribution Box Photo 2.3-10 Protect Plate in Furnace

(4) Lesson Learned from the Lakhra Power Station

The points connecting to the difficulty of handling coal contained high sulphur and high

moisture, were observed, which are mentioned below.

The erosion by the ash of the boiler area occurred by mainly by ash form low purity of

limestone not so much by coal ash. Therefore using high purity limestone for

de-sulfurization agent is important.

The SOx concentration in the exhaust gas should be controlled strictly by feeding back the

injection quantity of limestone.

In addition, it is suggested that the exhaust gas temperature should be kept higher than the

dew point of sulphic acid, 140°C at least, at the point of stack inlet, and the in-furnace pressure

should be kept negative pressure to prevent deterioration of the facilities in boiler area by acid

gas.


2 - 38

2.4 Power Development Plan

2.4.1 Basic Policy of Power Development Plan

As described in Paragraph 1.1.1 - Present Situation of Power Supply and Demand, the total

installed capacity of Pakistan was around 21,000 MW in 2011. However, rapid growth and

inadequate generation created a gap between supply and demand resulting in significant load

shedding in all countries.

In order to address this gap, the National Transmission and Despatch Company (NTDC) of

Pakistan identified the need to develop a National Power System Expansion Plan (NPSEP).

The objective is to provide a plan for the development of hydroelectric, thermal, thermal

nuclear, and renewable energy resources to meet the expected load up to the year 2030. The

plan was prepared during the period from December 1, 2010 through May 31, 2011.

The NPSEP is known as the latest plan for power generation and grid expansions.

2.4.2 Long-Term Power Demand Forecast

In the NPSEP, four forecasts, namely: Base Case, Base Case with DSM, Low Case and High

Case, are prepared wherein the forecasted values for the selected years only are summarized

in Table 2.4-1.

Table 2.4-1 Forecasts for Selected Year

2010 2020 2035 Growth Rate(2010-2035)

Sales (GWh) Base Case 106,569 254,105 737,860 8.1%Base Case with DSM 106,569 254,105 737,860 8.1%Low Case 106,569 217,348 551,314 6.8%High Case 106,569 280,299 916,155 9.0%

Generation (GWh) Base Case 139,954 306,797 889,583 7.7%Base Case with DSM 139,954 306,797 889,583 7.7%

Low Case 139,954 262,518 665,210 6.4%High Case 139,954 338,663 1,106,567 8.6%

Peak Demand (MW) Base Case 22,251 49,824 149,665 7.9%Base Case with DSM 22,251 49,146 144,779 7.8%Low Case 22,251 42,612 111,906 6.7%High Case 22,251 54,998 186,228 8.9%

Source：NTDC National Power System Expansion Plan 2011-2030

Note: DSM: Demand side management

The peak demand forecast growth for High, Base, and Low cases are shown in Figure 2.4-1.

Peak demand, below 20,000 MW in 2010-11, will increase to double in 2016-27 and exceed

100,000 MW in 2028-29 for the Base Case.

Therefore, for developing the generation plan, the dynamic challenge of not only

compensating the present gap but also catching up with the increase demand is

indispensable.


2 - 39

Source：JICA Survey Team prepared based on Table 2.4-1

Figure 2.4-1 Peak Demand Forecast for High, Base, and Low Cases

2.4.3 Generation Planning

The generation development plan in NPSEP is shown in Table 2.4-2. By the year 2029-30,

98,120 MW additional generations are planned to be developed in the countries. Out of this,

the coal thermal generation in Thar shall share 37,422 MW, which is 38% of the required

additional generation.

Table 2.4-2 Generation Expansion Plan

Year Demand

(MW)

Additional Capacity （MW）

Gas Turbine

CC Gas Turbine

Steam Turbine

Coal Thermal in Thar *

Nuclear Hydro Wind Import Annual Total

2011-12 22,567 364 320 166 100 9502012-13 24,259 267 546 452** 249 1,5132013-14 26,225 1,841 658 165 8232014-15 28,423 -1,841 0 400 2,2412015-16 31,018 4,363 1,189 400 4,1102016-17 33,750 2,835 320 370 500 2,000 6,0252017-18 36,728 2,267 320 2,136 300 5,0242018-19 40,149 3,969 1,236 100 5,3052019-20 43,967 3,969 940 1,435 6,3442020-21 47,879 2,268 940 4,089 7,2972021-22 52,147 1,379 567 3.061 400 5,4072022-23 56,665 5.316 400 5,7162023-24 61,424 2,267 940 4,768 400 8.3762024-25 66,418 940 5,544 400 6,8842025-26 71,610 307 3,402 911 400 5,0202026-27 77,015 1,379 4,356 400 6,1352027-28 82,586 5,670 940 400 7,0102028-29 88,324 307 4,536 940 400 6,1832029-30 94,231 307 1,379 5,670 400 7,756

Total 1,188 10,167 453 37,422 6,600 34,991 5,400 2,000 98,120

* Steam Turbine using Thar Coal ** Including 76 MW Jamal Din Wali R.Y. Kham, Punjam (Bagasse) and 24 MW bio waste plant and 352 MW converted from oil to coal in KESC system, GT: Gas Turbine, CCGT: Combined Cycle Gas Turbine, ST: Steam Turbine

Source：NTDC National Power System Expansion Plan 2011-2030

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

2019

-20

2020

-21

2021

-22

2022

-23

2023

-24

2024

-25

2025

-26

2026

-27

2027

-28

2028

-29

2029

-30

2030

-31

2031

-32

2032

-33

2033

-34

2034

-35

Pea

k D

eman

d F

ore

cast

Year

High Case

Base Case

Low Case

(MW)


2 - 40

Figure 2.4-2 shows the dependence ratios of generation type. Coal thermal in Thar shares

38%, hydro has 36%, CC gas turbine has 10%, nuclear has 7%, wind has 6%, import has 2%,

gas turbine has 1% and steam turbine is negligible.

Source: Prepared by the JICA Survey Team based on the data in Table 2.4-2

Figure 2.4-2 Capacity Rate in Thar Coalfield on the Generation Expansion Plan

The incremental plan of the generation capacities in Thar coalfield is shown in Figure 2.4-3. By

2029-30, 66 units of 600-MW (33 MW of which is self-used and the balance of 567 MW can be

sent to the grid) coal thermal power plants are forecasted to be installed. In 2016-17, the first

five units are planned to be put into operation. Then, this will be gradually increased to 66

units.

Source: Prepared by the JICA Survey Team based on the data in Table 2.4-2

Figure 2.4-3 Increment of Generation Capacity in Thar

37420

0

5000

10000

15000

20000

25000

30000

35000

40000

2011‐12 2019‐20 2029‐30

(MW)

Year

Installed Capacity (MW)

1%

10%0%

38%

7%

36%

6% 2%Gas Turbine

CC Gas Turbine

Steam Turbine

Coal Thermal in Thar

Nuclear

Hydro

Wing

Import

Wind


2 - 41

2.4.4 Power Grid Expansion Plan

(1) Existing Power Grid

The transmission network is maintained and operated by the National Transmission and

Despatch Company (NTDC). The NTDC has 12 grid stations at 500 kV and 29 grid stations at

220 kV, and 5077 km of 500 kV transmission line and 7359 km of 220 kV transmission line in

Pakistan at present. The existing grid map for 500 kV and 220 kV systems is shown in Figure

2.4-4.

Source: NTDC

Figure 2.4-4 Existing Grid Map for 500 kV and 220 kV Systems


2 - 42

(2) Expansion Plan up to 2016-17

In order to meet the demand forecast and development of generation capacity up to 2016-17,

NTDC will expand the transmission network. The expansion plan for 500 kV and 220 kV

systems up to 2016-17 is as follows:

Source: National Power System Expansion Plan 2011-2030

Figure 2.4-5 Expansion Plan Grid Map for 500 kV and 220 kV Systems up to 2016-17


2 - 43

Table 2.4-3 Summary of Major Expansion Plan up to 2016-17

Power Plants Transmission Line Guddu–New (CCPP) - 500 kV Guddu New CCPP – M. Garh

- 500 kV In/out of Guddu – Multan at Guddu New (CCPP) - 500 kV In/out D.G. Khan – Multan at M. Garh

Haveli Bahadur Shah (CCPP)

- 500 kV Haveli Bahadur Shah CCPP – Faisalabad-West - 500 kV In/out of M. Garh – Faisalabad-West S/C at Haveli Bahadur Shah

CCPP Sahiwal (CCPP) - 500 kV In/out of Sahiwal–Multan 500 kV S/C at Sahiwal (CCPP) Neelum-Jehlum (Hydro)

- 500 kV Neelum-Jehlum to existing Gujranwala (Gakhar)

Thar (Coal) - 500 kV Thar - Matiari Imported Coal (AES and Public Sector)

- 500 kV In/out of Hub-Jamshoro at AES - 500 kV AES to Matiari - 500 kV In/out of AES - Matiari at Public Sector (Imported Coal) - 500 kV In/out of Jamshoro - Moro S/C at Matiari

Import of power from Iran

- ± 500 kV HVDC Bipoles from Zahedan to Quetta - 220 kV Quetta – Quetta Ind - 220 kV Quetta – Mastung - 220 kV Quetta – Loralai

Import of power from CASA

- ± 500 kV HVDC Bipoles from Tajikistan to Peshawar - 500 kV In/out of Tarbela – Peshawar 500 kV S/C at Peshwar-2 (new 500/220

kV substation) - 220 kV In-out of Peshawar – Shahibagh S/C at Peshawar-2

CHASHNUPP-III and IV

- 220 kV Chashma New – Bannu - 220 kV In-out of D.I. Khan – Jauharbad at Chashma New

Two clusters of wind power plants at Gharo and Jhimpir

- 220 kV Jhimpir – T.M Khan Road - 220 kV Gharo – Jhimpir

Source: NTDC


2 - 44

(3) Expansion Plan for 2017-20

In this period, in order to supply power to the northern areas from the Thar power plants, the

high voltage direct current (HVDC) transmission lines are planned in the domestic areas for

the first time.

Expansion plan for 500 kV and 220 kV systems for 2017-20 is as follows:

Source: NTDC

Figure 2.4-6 Expansion Plan Grid Map for 500 kV and 220 kV Systems up to 2020


2 - 45

Table 2.4-4 Summary of Major Expansion Plan for 2017-20

Power Plants Transmission Line Thar Coal - ± 600 kV HVDC 4000 MW Bipoles from Thar to Lahore-South with two

converter stations of same capacity at both ends - ± 600 kV HVDC 4000 MW Bipoles from Thar to Faiselabad-West with two

converter stations of same capacity at both ends - 500 kV from Thar to Karachi new 500/220 kV substation at KDA-33

Karot - 500 kV In-out of one circuit of Neelum-Jehlum to Gujranwala via Aliot Azad Pattan - 500 kV In-out of one circuit of Neelum-Jehlum to Gujranwala via Aliot Diamer-Basha 1 and Bunji 1

- 500 kV Basha – Chilas - 500 kV Basha - Mardan via Swat Valley - 500 kV Bunji – Chilas- Three 500 kV switching stations/substations at Chilas, Aliot, and Mardan with

the following arrangements: a. New 500/220 kV Mardan Substation to feed local loads b. 500/220 kV Aliot Substation to connect to Chakothi HPP at 220 kV

- 500 kV In-out Neelum Jehlum - Gujranwala 500 kV D/C at Aliot Switching Station

- 500 kV Aliot to Islamabad West - 500 kV Aliot to Lahore North 500 kV D/C (with a new 500/220 kV substation of

Lahore North) Gabral-Kalam, Kalam-Asrit, Asrit-Kedam, and Madyan (Swat Valley HPPs)

- 500 kV In-out one each of Basha - Mardan New 500 kV D/C at each of Swat HPPs

Shogosin, Shushgai and Golen Gol (Chitral Valley HPPs)

- 220/132 kV Chitral Substation to collect power from all HPPs at 132 kV - 220 kV Chitral – Chakdara

Suki Kinari - 500 kV In-out of one circuit of Chilas-AliotChakothi - 220 kV Chakothi – AliotChashma Nuclear - 500 kV Chashma – LudewalaQadirabad Nuclear - 500 kV Qadirabad Nuclear Power Plant to Gujranwala (Gakkhar) Kaigah - Kaigah-Mardan New 500 kV D/C (operated as an interim arrangement until the

commissioning of the 2nd stage of Basha)



2 - 46

(4) Expansion Plan for 2021-30

In this period, since the chunks of generation plants such as thermal power at the Thar

coalfield and hydropower plants in the northern areas are planned in order to meet the

demand forecast, transmission network will also be expanded.

Expansion plan for 500 kV and 220 kV systems for 2021-30 is as follows:

Source: NTDC

Figure 2.4-7 Expansion Plan Grid Map for 500 kV and 220 kV Systems up to 2030


2 - 47

Table 2.4-5 Summary of Major Expansion Plan for 2021-30

Power Plants Transmission Line Bhikki - 500 kV In-out Lahore-Gatti 500 kV S/CThar Coal - Three ± 600 kV HVDC 4000 MW Bipoles from Thar to Lahore-South with six

converter stations of same capacity on both ends - Two ± 600 kV HVDC 4000 MW Bipoles from Thar to Faisalabad with four

converter stations of same capacity on both ends - One ± 600 kV HVDC 4000 MW Bipoles from Thar to Multan with two converter

stations of same capacity on both ends - Three 500 kV D/Cs from Thar to Matiari Two 500 kV D/Cs from Matiari to Moroo 500 kV D/C from Moro to R. Y. Khan

- Two 500 kV D/Cs from Thar to Karachi (Karachi-East) Bunji 2 and 3 - 500 kV D/C from Bunji to Chilas

- 500 kV D/C from Chilas to AliotBasha-2 - 500 kV In-out Basha-1 to ChilasMunda - 220 kV In-out Peshawar-2 (Pajjagi Rd.) – Ghalanai

- 220 kV Munda – Mardan New (Charsaddah) Kohala - 500 kV In-out Neelum-Jehlum to Aliot Palas Valley - 500 kV Palas-Valley to MansehraDasu - 500 kV Dasu-Mansehra

- 500 kV Dasu to Palas-ValleyLower Spatgah - 500 kV In-out one circuit of Dasu-Palas ValleyPAEC Karachi - 500 kV from PAEC to Karachi-South

- 500 kV from Karachi-South to Karachi-EastWind Power Cluster at Jhimpir

- 500 kV In-out one circuit of Karach East-Matiari

For Wind Power Cluster at Gharo

- 500 kV In-out Thar-Karachi-East

Thakot - 500 kV Thakot-MansehraPattan - 500 kV Pattan-Thakot

- 500 kV Thakot-MardanDhudnial - 500 kV Dhudnial - Neelum Jehlum D.I. Khan (CCPP) - Connect at 220 kV substation of D.I. KhanYulbo - 500 kV Yulbo-Bunji Tungus - 500 kV Tungus-Yulbo Chashma (Nuclear) - 500 kV Chashma-BannuBalloki - 500 kV In-out Lahore-South to Okara (Sahiwal)



2 - 48

2.4.5 Policy and Plan for Developing and Conducting the Coal Thermal Generation Plant

The total installed capacity of existing generation plants for the PEPCO and KESC systems

including IPPs is about 21,455 MW as of the end of 2010. As for thermal coal, the existing

generation capacity of the Lakhra generation plant is only 30 MW and its ratio to the total of the

generation capacity is only 0.1% at present. Installed capacity is shown in Figure 2.4-8.


Figure 2.4-8 Installed Capacity as of 2010

However, in order to fill in the gap between power supply and power demand, and shift the fuel

of generation from high cost oil to domestic coal, many thermal coal generation plants are

planned in the future. Fuel prices in US$/MMBtu are shown in table 2.4-6 and generation plan

is shown in Table 2.4-7.

Table 2.4-6 Fuel Price Forecasts to the Year 2030 (US$/MMBtu)

Unit: US$ / MMBtu

Fuel As of Projection 2010 2015 2020 2025 2030

Crude Oil 13.75 16.46 18.85 20.05 21.51 Imported Natural Gas 9.26 10.60 11.87 12.51 13.29 Imported LNG 7.96 13.23 13.98 14.68 16.84 Furnace Oil (HSFO) 12.48 12.57 14.41 15.32 16.44 Furnace Oil (LSFO) 13.72 13.84 15.85 16.85 18.07 Diesel 19.84 21.68 24.78 26.31 28.20 Imported Coal 4.83 6.19 6.91 6.36 5.88 Thar Coal 3.99 3.99 3.99 3.99 3.99


Thermal – Oil 7,838MW

36% Thermal – Gas

6,571MW 31%

Hydro 6,555MW

31%

Nuclear 461MW

2%

Thermal – Coal 30MW 0.1%


2 - 49

Table 2.4-7 Least Cost Generation Plan (Base Case)

Generation Capacity 2010-11 2020-21 2029-30

MW % MW % MW % Hydro 6,555 31 17,590 30 41,546 37Thermal gas 6,571 31 11,242 19 12,015 11Thermal oil 7,838 37 7,056 12 6,855 6

Thermal-coal 30 0.1 15,691 27 37,774 34

Bagass and Bio Waste Plants 0 0 100 0.2 100 0.1Nuclear 461 2 3,187 5 6,947 6Wind 0 0 1,800 3 5,400 5Import 0 0 2,000 3 2,000 2

Total 21,455 58,866 112,639


Since the Thar coalfield has resource potential of 175 billion tons of coal and mine-mouth

power plant is suitable due to mining coal of Thar coalfield is lignite coal which is unsuitable for

long distance transportation, the thermal coal power plants using the lignite coal are planned

to be concentrated in the Thar area.

Table 2.4-8 List of Future Plan for Thermal Coal Generation Plants

Year Name of Project Number of Units

Net Unit Capacity

(MW)

Total Capacity

(MW) 2016 – 17 Thar #1 or Imported Coal Plant 5 567 2,835 2017 – 18 Thar #2 4 567 2,268 2018 – 19 Thar #3 7 567 3,969 2019 – 20 Thar #4 7 567 3,969 2020 – 21 Thar #5 4 567 2,268 2021 – 22 Thar #6 1 567 567 2023 – 24 Thar #7 4 567 2,268 2025 – 26 Thar #8 6 567 3,402 2027 – 28 Thar #9 10 567 5,670 2028 – 29 Thar #10 8 567 4,536 2029 – 30 Thar #11 10 567 5,670

Total 66 - 37,422 Source: National Power System Expansion Plan 2011-2030

2.4.6 Other Relevant Plans and Information

(1) Plan of Jamshoro Thermal Power Plant

Jamshoro Thermal Power Plant is operated using furnace oil and dual (gas / FO) thermal at

present. Its total installed capacity is 850 MW. However, since utilization of furnace oil has high

cost, the Jamshoro thermal plants have an upgrading plan for utilization of coal through ADB

fund.


2 - 50

Table 2.4-9 Summary of Jamshoro Thermal Power Plants

Number of Unit

Installed Capacity (MW)

Fuel Type Commissioning Date

Unit I 250 Furnace Oil (FO) 27.01.1990 Unit II 200 Dual (Gas / FO) 03.12.1989 Unit III 200 Dual (Gas / FO) 27.06.1990 Unit IV 200 Dual (Gas / FO) 21.01.1991 Total 850

Source: Jamshoro Power Company Limited

Consequently, it has been decided, as requested by the Government of Sindh, GENCO, that

the existing two units of power plants at Jamshoro be designed so that Thar coal can be used

and will be upgraded to coal thermal plants. New 600 MW coal thermal plants will be

constructed wherein Thar coal can be used. In addition, conclusion of coal off-take agreement

with SECMC is strongly desired for coal supply to the above coal thermal plants.

However, according to ADB, in case the specification for the utilization of coal is changed to

Thar coal from Indonesian coal of as scheduled in the original plan, it is necessary to resubmit

the project for EIA, and there is a possibility that the financing from ADB will be cancelled.

Further, if Thar coal will be used for the new construction plan of 600 MW, the F/S and

construction plan process will be delayed at least for one year. However, there is possibility

that Thar coal can be used, at around 10%, in a mixture with other coals as per the existing

plan.

2.5 Power Generation Applications and Tariff

2.5.1 General Procedure of Application

For private sector participation in the power sector, there are two authorities where application

shall be made. One is PPIB, which facilitates the investor, and the other is NEPRA, which

issues the license and decides the generation tariff. The outlines of their functions are

explained hereafter, and their detailed functions are shown in Appendix 2-2.

The PPIB’s role is to provide a one-window facility for implementation of projects with more

than 50 MW capacity; issue the letter of intent (LOI) and letter of support (LOS); assist the

sponsor/project companies in seeking necessary consent/permission from various

governmental agencies; carry out negotiations on the implementation agreement (IA); assist

the power purchaser, fuel supplier and provincial authorities in the negotiations, execution and

administration of PPA, FSA/GSA/CSA and WUL, respectively; issue and administer the GoP

guarantee backing up the power purchaser’s, fuel supplier’s, and provincial government’s

contractual obligations; and follow up on the implementation and monitoring of the projects.


2 - 51

NEPRA’s role in the power business, inter alia, is to issue licenses for companies and to

regulate their operations according to NEPRA rules and regulation.

The general application procedure and schedule, which is introduced by PPIB, is shown in

Table 2.5-1.

Table 2.5-1 Power Generation Application Procedure and Schedule

No Activity Typical Time

(Allowed days)

(a) Submission of proposal on raw site by the sponsors ---

(b) Review of proposal on raw site by a committee under the Secretary, Ministry of Water & Power, comprising representatives from PPIB, WAPDA, KESC, the Planning & Development Division, the concerned provincial or SCA (for coal-based projects in Sindh)

60

(c) Posting of bank guarantee by sponsors at US$1000 per MW in favor of PPIB 30

(d) Issuance of the LOI by PPIB 30

(e) Initial time allowed to carry-out feasibility study/term of the LOI 12-24 months, on

case-to-case b i

(f) Tariff negotiations between sponsors and power purchaser (NTDC or KPSC) 90

(g) NEPRA’s approval of tariff 180

(h) Submission to PPIB of approved tariff. 15

(i) Submission of performance guarantee at US$5000/MW by sponsors in favor of PPIB, if tariff is approved

30

(j) Issuance of the LOS by PPIB 30

Source: Policy for Power Generation Projects Year 2002 issued by PPIB

As of December 2012, only Engro Powergen (Block II in Thar) had submitted the power

generation proposal to PPIB and obtained LOI from PPIB, i.e., proceeded to No. (d) in Table

2.5-1.

2.5.2 Tariff Structure

The tariff structure of the generated power in Thar is applied as stated hereafter.

(1) Currency of Tariff

The tariff will be denominated in Pakistan Rupees (Rs.).

(2) Capacity and Energy Components

Generally, the tariff consists of two parts: (1) energy purchase price (EPP) and (2) capacity

purchase price (CPP). The CPP and EPP will be expressed in Rs./kW/month and Rs./kWh,

respectively.

The CPP will be paid provided the plant is available for despatch to standards defined in the

PPA. The EPP will be paid based upon the amount of kWh of energy despatched.

In order to ensure sustained interest of the sponsor during the entire life of the project, the sum


2 - 52

of EPP and non-debt related CPP (computed on a kWh basis at the reference plant factor) will

remain constant or increase over time. The debt-related CPP stream may match the loan

repayment stream.

According to the past tariff determination for IPP projects, the breakdown of the CPP and EPP

are as shown in Table 2.5-2.

The IRR for the equity will be given at 20% for power generation projects utilizing local coal,

and 17% for those utilizing imported coal.

Table 2.5-2 Constitution of Tariff

EPP (Rs./kWh) CPP (Rs./kW/month) 1) Fuel 2) Variable O & M Foreign 3) Variable O & M Local

1) Loan & Interest Payment 2) Cost of Woking Capital Interest (WCAP Interest) 3) Return on Equity during Construction period

(ROEDC) 4) Return on Equity (ROE) 5) Withholding Tax (WHT) 6) Fixed O & M Foreign 7) Fixed O & M Local 8) Insurance

Source: Application of Determination of Tariff AES Pakistan Limited (sample only)

2.5.3 Incentives on the Tariff

For the tariff, the following incentives are given to IPPs:

a. Custom duty at the rate of 5% on the import of plant and equipment not manufactured

locally;

b. No levy on sales tax;

c. Exemption from income tax including turnover rate tax and withholding tax on import;

and

d. 20% IRR for power generation utilizing local coal and 17% for those utilizing imported

coal.


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2.5.4 Referential Tariff Generated by Coal Thermal

In May 2012, NEPRA published the notice of hearing on newspapers regarding “Development

and Determination of Upfront Tariff for Coal Power Projects”, which is attached in Appendix

2-2, and the extracted points are quoted below. The proposed tariff is for coal thermal

generation projects utilizing coals except Thar. In the remarks, it is stated that “the tariff model

for local coal excludes “Thar Coal” for which a separate tariff mechanism is required owing to

certain costs particular to Thar coal projects including development surcharge, etc., and

separate mechanism shall be devised in due course”.

Although tariff has not been finalized, this tariff can be used as reference for assuming the tariff

of generation utilizing the coal in Thar.

Table 2.5-3 Levelized Tariff Proposed by PPIB

Capacity Origin of Coal

Form of Financing

Energy Charge (EPP)

Capacity Charge (CPP) Levelized

Tariff at 60% Plant Factor Fuel cost V.O & M Total 1st 10Yrs.

11-30 Yrs.

(Rs./kWh) (Rs./kWh/Hour) (Rs./kWh)

1,000 MW

Local Local 4.1975 0.1708 4.3683 5.2675 2.0557 11.2836

Foreign 4.1975 0.1708 4.3683 3.5515 1.8109 9.2773

Assumption Condition Plant factor: 60% Net thermal efficiency: 37% Annual net generation: 7,844 hours (90%) IRR: 20% Project life: 30 years Price of local coal: US$57/ton Heating Value of local coal: 11,023 Btu/kg

Finance: 100% local or 100% foreign debt Debt service component - on local financing: KIBOR (11.91%) +3.5% - on foreign financing: LIBOR (0.45%) + 4.5%

EPC cost: US$1,250 mil Variable O & M cost: US$13.18 mil Fixed O & M cost: US$25.98 mil Exchange rate: US$1 = Rs.88

Source: NEPRA Notice of Public Hearing

Assumption of Tariff of Thar Generation

Based on the above, the tariff of generated power in Thar is assumed in Table 2.5-3 with the

condition of 1000 MW scale plant and foreign investment.

The tariff will be Rs.12.452 for 1st to 10th year, which includes the repayment of debt, and

Rs.8.971 for the11th to 30th year, in case the coal price is US$60/ton.

Where coal price will fluctuate at US$10, the tariff will fluctuate at Rs.0.818/kWh

(US$1=Rs.8810)

10 The exchange rate of Rs.88/US$ is applied in accordance with the assumption done by PPIB as shown in Table 2.5-3.


2 - 54

Table 2.5-4 Assumption of Tariff of Generation (1,000 MW Class)

Fuel (Coal )

Water Val. O & M

EPP CPP Tariff

a b c d = a+b+c e f = d+e/0.6

1st to 10th years 4.932 0.212 0.205 5.349 4.262 12.452

11th to 30th years 4.932 0.212 0.205 5.349 2.173 8.971

Fuel (Coal)

1. Heating Value (Block II): 3,211 kcal/kg, 12,742 Btu/kg (0.252 kcal/Btu) 2. Price of coal: case 1=US$50/ton, case 2= US$55/ton and case 3=US$60/ton 3. EPC cost: US$1,500 mil. for 1,000MW (US$1,500/kW) 4. Net thermal efficiency: 37% 5. Heat rate: 9,222 Btu/kW (3,412 Btu/kWh divided by 37%) 6. Coal cost per kW Case 1: US$50/1,000 x (9,222/12,724)= USȼ3.62/kWh (Rs.4.114/kWh) -Rs.0.818 to Case 3 Case 2: US$55/1,000 x (9,222/12,724)= USȼ3.98/kWh (Rs.4.523/kWh) -Rs. 0.409 to Case 3 Case 3: US$60/1,000 x (9,222/12,724)= USȼ43.4/kWh (Rs.4.932/kWh) applied to assumption

Water Charge

1. Water consumption for wet cooling: 3 t/MWh ⇒3 L/kWh (general information) 2. Cost of water: Rs.70.5/ton ⇒Rs.0.0705/L (please refer to Clause 5.2 Water Supply) 3. Cost of water per kWh: 3 x 0.0705 = Rs.0.212/kWh

Valuable O & M

Rs.0.1708 x US$1,500 mil./US$1,250 mil. = 0.1708 x 1.2 = Rs.0.2050

CPP

1. 1st to 10th years: Rs.3.5515 x US$1,500 mil./1,250 mil. = Rs.3.5515 x 1.2 = Rs.4.262 2. 11th to 30th years: Rs.1.8109 x US$1,500 mil./1,250 mil. = Rs.1.8109 x 1.2 = Rs.2.173


The tariffs for the 600MW and 300MW class are assumed in Appendix 2-4.

CHAPTER 3 THAR COALFIELD DEVELOPMENT


3 - 1


3.1 Current Status of Each Block

Sindh government established and opened 12 blocks in Thar coalfield for coal development

for investors in Pakistan and overseas. Figure 3.1-1 shows Blocks I to IX, and Table 3.1-1

shows current activities. Six out of 12 blocks have already been committed for exploration and

development, including those for power generation using Thar coal. However, actual activities

are only carried out in four out of the six committed blocks, of which the current status are

summarized in Table 3.1-2.

Source: TCEB Sep. 20, 2012

Figure 3.1-1 Thar Coal Blocks Layout


3 - 2

Table 3.1-1 Coal Mine Development and Power Plant Plan

Block Allocated Investors

Exploring Agency

Mine Development

Works Production

Power Station

I Global Mining

(China)

GSP - GESCR By October 2012

5 Mt/y by Oct-2015 900 MW Rheinbraun Engineering

(Germany)-USGS

II Engro SECMC

GSP - GESCR

By April 2013 Phase1: 6.5 Mt/y Phase2: 13.0 Mt/y Phase3: 22.8 Mt/y

Oracle 1,200 MW SECMC Phase3: 4,000 MW

Engro - USGS

Engro - JORC -AusIMM

III Cougar GSP - GESCR

IV AACE GSP - USGS Initial Production 6 Mt/y --> 18 Mt/y

1,100 MW-->3,000 MW in 15 years

V UCG Project CNCGB - GESCR In 10 to 12 months 8–10 MW

VI Oracle (UK)

CNCGB Preparation works started,Development in near future

5 Mt/y by 2014 (down to 2.4 Mt by Oracle)

KESC 300 MW-->1,100 MW

Sindh Carbon Energy

VII Available

VIII Available

IX Available

Source: TECB

Table 3.1-2 Current Situation of Each Block in Thar Coalfield

Block Developer Exploration

License Granted

Bankable F/S Completed

Mining Lease Issued

ESIA for Mining Accepted

Mining Start Planned

Coal coming Note

I

Global Mining Company of China 10.0 Mt/a

October 2011

March 2012 May 2012

EIA Public Hearing was done on 27 September 2012


Financing of the project is being arranged.

II

Sindh Engro Coal Mining Company 6.5 Mt/a (Initially 3.5 Mt/a)

August 2009 August 2010 February 2012

EIA public hearing will be held in November 2012


Financing of the project is being arranged

V UCG Pilot Project by GoP

Test burn conducted in December 2011and Syngas produced

Presently the 8-10 MW Power Plant is being established at the cost of Rs.1.8 billion

VI Oracle Coalfields, PLC 2.4 Mt/a

November 2007

October 2011

April 2012 In near future In 2013 2 years from the starting mining

JDA was concluded with KESC

Source: TCEB

Note: For the mining of coal in Thar, all license/leases are approved by the Thar Coal and Energy Board Global Mining Company of China have got No Objection Certificate (NOC) from Sindh Environmental Protection Agency (SEPA) on EIA on 29 Nov.2012


3 - 3

3.1.1 Block I

Sino-Sindh Resources, a local subsidiary of Global Mining Company, invested in Block I for

coal mining and power generation of 900 MW, and signed a MoU with the Government of

Sindh for the project in September 2011. The company plans to invest US$4.5 billion until

2016.

Global Mining completed a bankable feasibility study in March 2012 and carried out an EIA

public hearing in Islamkot on September 27, 2012 after the environmental assessment was

completed. According to TCEB, preparation works for mining in Block I will be implemented

soon. The company will supply the coal not only to a mine-mouth power station but also to

local thermal plants and cement industry after processing to briquette. A mine-mouth power

generation of 900 MW is planned after started mining.

Source: Geological Survey of Pakistan November 2002

Figure 3.1-2 Isopach Map of Block I (left: Cumulative Coal Thickness, right: Overburden)

1st Mining area

2nd Mining area


3 - 4

Source: Geological Survey of Pakistan (November 2002)

Figure 3.1-3 Cross-section along Boreholes on Block I


3 - 5

3.1.2 Block II

In 2002, Shenhua Group Corporation of China expressed interest in Block II development,

aiming to build mine-mouth power plant (300 MW x 2), Shenhua Group then sent a team of

136 coal mining engineers, geologists, hydrogeologists, and power plant specialists to open

up Thar coal resources for commercial use. The company established a field camp in the

desert and worked on Thar coalfield for a period of two years. In 2004, they prepared a

comprehensive feasibility report, which found that the Thar lignite resource is suitable for

commercial mining. Consequently, they proposed open cut mining with mine-mouth power

generation of 600 MW in the first phase, to be scaled up to 3000 MW based on the lignite

reserves in Block II, which has an area of 55 km2 (0.6% of Thar coalfield area of 9000 km2).

Shenhua Group asked for a tariff of US¢5.6 per kWh for the electricity generated by its

proposed power project. At that time, IPPs sold electricity at US¢6.5 per kWh to the

government. However, they asked for a transmission line to be provided by the government to

make up for the lower tariff that they are asking for. However, WAPDA insisted on a tariff of

US¢5.3 per kWh, causing the negotiations to fail. A subsequent feasibility report by Germany’s

RWE Company funded by the Federal and Sindh governments proved that the real

commercial cost for power generation in first power project on Thar Coal, as per European

standards could be up to US¢7.6 per kWh.

In May 2008, the Government of Sindh, through the Mines and Mineral Development

Department (the predecessor of Coal and Energy Department), offered a joint venture to a

private sector in the form of public private partnership, with an equity ratio of 60% for private

and 40% for public. Participation and management control will be under the private partner. A

joint venture company with the name of Sindh Engro Coal Mining Company was formed. It

started works left unfinished by the Chinese in Block II. (Source: Coal and Energy

Development Department, Government of Sindh. Published in the Express Tribune, January

30, 2012)

Source: Survey of Pakistan (Nov. 2002)

Figure 3.1-4 Isopach Map of Block II (left: Cumulative Coal Thickness, right: Overburden)


3 - 6

Source :Geological Survey of Pakistan (Nov. 2002)

Figure 3.1-5 Cross-section along Boreholes on Block II


3 - 7

Source: Geological Survey of Pakistan (Nov. 2002)

Figure 3.1-6 Isopach Map of Heating Values (ar base), Block II

Source: Borehole data:U.S. Department of Interior/U.S. Geological Survey Open-File Report 94-167

Figure 3.1-7 Seam Correlation Chart of Boreholes around Block II


3 - 8

Source: Original data from TCEB and modified by JICA Survey Team

Figure 3.1-8 Seam Correlation Chart Line

Joint working group comprising of SECMC, RWE, and SINOCOAL experts worked in RWE to

finalize the 3D geological model, mine & equipment planning and cost model.

SECMC team was stationed at SINOCOAL, China, to review and finalize mine position maps,

equipment selection, surface water, de-watering, mine surface facilities layout and cost model.

Bankable Feasibility Study (BFS) report was prepared by SECMC while numerical

groundwater model and groundwater dewatering design were finalized by RWE.


3 - 9

Final review was conducted in August 2010 in Karachi, by SECMC, SINOCOAL, HBP/SRK,

and RWE experts. Final BFS report was issued to the Board of Directors of Coal & Energy

Development Department, Sindh Government, on August 31, 2010. (SECMC presentation

data was submitted on October 20, 2010)

The main points on BFS of SECMC regarding Block II are as follows:

Production Capacity : Coal : 6.5 million tons/ year, Overburden/Interburden 39 - 42.8 million

m3/year; and

Selected mining method/equipment: Open pit mining using truck and shovels (T&S)

instead of bucket wheel excavator as shown in Table 3.1-3.

Table 3.1-3 Selected Mining Method and Equipment

Overburden Coal

Variant -1(T&S) Removal and transfer through T&S to the dumping site

Removal through T&S and transfer through IC to stock yard

Variant-2 (IC-Spreader)

Removal through T&S and transfer through WTS and conveyors to the spreaders at the dumping site

Removal through T&S & transfer through IC to stock yard (remarks) WTS: Waste Transfer Station IC: In-pit Crusher

Source: BFS of SECMC Block II

The Government of Pakistan (GoP) then decided to convert Jamshoro oil-fired power plant to a

coal-fired power plant. Either DECMC or Sindh-Engro Coal Company will supply Block II coal to the

Jamshoro coal-fired thermal power project under the coal off-take agreement, before the Block II

mine-mouth generation operation.


3 - 10

Selected Equipment Variants – Overburden

Shovel

Mine (-115m AMSL)

Conveyor

BeltShovel

Mine (-115m AMSL)

Outside Dump (+180 m AMSL)

Inside Dump

S/T Variant ( Variant 1)

IC- Spreader Variant (Variant 2)

Spreader

Selected Equipment Variants- Lignite

Shovel

Mine (-115m AMSL) Crusher

Conveyor

Belt

Stockyard (+80 AMSL)

Source: SECMC presentation data on October 20, 2010

Figure 3.1-9 Illustrations of Two Variants of Equipment

Table 3.1-4 Production Schedule (Excavation) – Variant 1 – 6.5 M t/a T&S

Project Year -3 -2 -1 1 2 3 4 5 6 7 8 9 10

Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Contracted OB

(Mm3)30 35 35 26 0 0 0 0 0 0 0 0 0 126

Owner OB

(Mm3)0 0 0 16.8 43.1 37.9 37.9 37.9 39 39 39 39 39 1202

Total Waste

(Mm3)30 35 35 42.8 43.1 37.9 37.9 37.9 39 39 39 39 39 1328

Coal (Mt) 0 0 0 1.9 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 196.9

Stripping Ratio - - - 22.5 6.63 5.83 5.83 5.83 6 6 6.08 6.01 6.09 6.98

30 yearsCumulative

Source: SECMC presentation data on October 20, 2010


3 - 11

Source: Thar Coal Project-Block II Mining Feasibility Study

Figure 3.1-10 Infrastructure Situation of Block II Development in 2030

3.1.3 Block III

Cougar Energy Ltd, UK, is in charge of the Underground Coal Gasification Project in Block III.

Exploration license was issued on September 2009, valid for three years. According to TCEB,

desktop studies are under process. JV negotiation with Fauji Foundation is undergoing;

however, any other information is not provided by Cougar.

3.1.4 Block IV

AustralAsian Continental Energy (AACE) expressed interest in Block IV development.

According to the presentation during the Coal Conference held in October 2011, Block IV has

a measured and indicated resource of 2.4 billion tons within an area coverage of 82.5 km2.

The mining plan showed that the initial production rate is 6 million tons per annum, which will

then increase to 18 million tons per annum in 15 years. Mining method requires use of three


3 - 12

bucket wheel excavators (BWE) for removal of overburden and one for lignite mining operation.

The total capital cost of the mining operation was estimated to be US$1 billion.

Meanwhile, the planned power station aims to generate 1100 MW initially, which will then

increase to 3000 MW in 15 years. The project cost was estimated to be US$2 billion.

According to TCEB, AACE has not sent any information yet. The JICA Survey Team (JST)

assessed that BWE method would not be a suitable choice for mining method in coal parts in

Thar coalfield.

3.1.5 Block V

The Planning Commission in July 2009 approved an R&D project, and engaged Pakistan’s

most renowned scientist Dr Samar Mubarakmand to develop a local technology and execute

the pilot project. The project is intended for the production of Syngas from Thar and

establishment of Underground Coal Gasification (UCG) -based power plant with a 100 MW

capacity. A test burn was ignited on December 11, 2011. The Planning Commission, GoP

conducted a project appraisal in June 2012 and decided that:

a. The pilot project comprising of one gasifire (36 wells) would be operationalized for power

generation of 8-10 MW electricity within a period of 10-12 months.

b. After the successful power generation of 8-10 MW, a complete technical appraisal/review

of the project would be carried out, which will serve as basis for allowing commencement

of the work on the development/expansion of required infrastructure for 100 MW power

generation.

UCG technology in Block V

A very simple burning method for the UCG is applied as illustrated in Figure 3.1-11. The

produced Syngas has 12%-15% CO2 content and well pressure at initial and running

conditions are 64 bar and 7 bar, respectively.


3 - 13

Source: UCG Project Site Presentation at Block V, October 1, 2012

Figure 3.1-11 UCG Production Process

Detail of the UCG Technology is described in Chapter 4.2.2.

At present, Block V UCG is an R&D level project. When hydraulic fracturing/stimulation

technology will be introduced in Block V-UCG project in the future, Syngas will potentially

serve as one of main fuel for power generation.

Photo 3.1-1 Production Well Photo 3.1-2 Compressors


3 - 14

Photo 3.1-3 Pipelines connecting boreholes

3.1.6 Block VI

Oracle Coalfields of UK was granted the first exploration licence in 2007 for Block VI covering

an area of 66.1 km2. The firm has also concluded a joint development agreement (JDC) with

Karachi Electricity Company (KESC), and off-take agreement with Lucky Cement in late 2009

and early 2010, respectively.

A technical feasibility study including Joint Ore Reserves Committee (JORC) coal resource of

529 million tons in the 20 km2 of the authorized area, and 113 million tons, JORC proven coal

reserve, was completed under phase 1 mining stage (Figure 3.1-12). In April 2012, Oracle

Coalfields was granted a mining lease, and was the first foreign coal development company in

Pakistan. According to Oracle Coalfields, they will execute the development of Thar coal

(Reference: Oracle Coalfields PLC Annual General Meeting on May 29, 2012).


3 - 15

Source: Presentation of Project Status for Thar Block VI International Coal Conference, Pakistan, October 22, 2011

Figure 3.1-12 Oracle Coalfields Mining Plan

JORC: The Joint Ore Reserves Committee Code (JORC Code) is integral to Australia’s

reputation for offering a well-regulated and supervised marketplace that demands the highest

standards of disclosure and corporate governance.

Source: Interview Oracle Staff on October 6, 2012

Figure 3.1-13 Layout of Mining Area and Mine-mouth Power Plant in Block VI


3 - 16

The primary purpose of the JORC Code is to provide a minimum standard for the public

reporting of exploration results and estimates of mineral resources and ore reserves.

The JORC Code plays an important role in enhancing the integrity of reporting by mining

companies, and in ensuring that disclosures contain the information investors reasonably

require in making investment decisions. This is particularly critical because often, the most

important information about mining companies relates to the quantity and quality of the mineral

resources and ore reserves under their control. While the JORC Code serves investors

greatly, it is also beneficial to mining companies themselves as reliable estimates are

fundamental to the funding and valuation of mining projects and, ultimately, to the reputation of

the company(www.asxgroup.com.au/jorc.htm).

According to the JDA with KESC, power station capacity is 300 MW initially, and will eventually

increase to 1100 MW. A target of 5 million tons per annum was expected on the second half of

2015 to feed the power sector. In August 2012, Oracle Coalfields released the implementation

plan with a significant reduction in capital expenditure from US$610 million (based on 5 million

tons per annum) to an initial US$176 million (based on 2.4 million tons per annum), which

represents a savings of US$434 million. The total cash cost of production is also reduced by

US$18 per wet ton, from US$42 per wet ton to US$24 per wet ton, over the mine life based on

a 2.4 million wet tons per annum mine (Reference: Oracle Interim Results on June 30, 2012).

The remaining works before starting mining in the block are:

Carrying out topographic survey to define the boundaries of the open pit, water treatment

area, coal processing areas, waste dump area, and mine infrastructure complex, as well

as the footprint for the initial 300 MW plant, to be developed by KESC, adjacent to the

mine;

Infill drilling of approximately 40 non-cored boreholes for the opening of the mine box-cut,

which will be carried out by December 2012;

Carrying out of resettlement program by the environmental and social consultants.


3 - 17

3.2 Geological Assessments

3.2.1 Main Issues and Countermeasures in Thar Coal Development

(1) Overburden Removal

Issue: Removal of very thick sand dune and alluvial sediment

Proposed Action: Mining technology for removal of thick overburden is applied for many lignite

mines around the world. The best method, which is combination of BWE, T&S, Surface miner,

and belt conveyor, is already studied in the BFS. It is important that at an early stage, mining

experts from Pakistan visit some of the principal lignite mines in other countries to find out

when BWE system is practically used, and where T&S method is used. The advantages and

disadvantages of different mining methods shall be well understood by the experts involved in

mining in Thar.

(2) Dewatering Works

Issue: Abundant underground water above and under the coal seam zone in Thar coalfield

while Lakhra coalfield has no groundwater. Groundwater significantly affects mining safety

and total moisture content of raw coal.

Proposed Action: Water Master Plan, including detailed feasibility level hydrogeological study,

water supply and waste water management studies, is already in progress. The studies will

identify.

The level of groundwater available

Level and extent of dewatering

Designing of a comprehensive dewatering plan. It will certainly include drilling of production

wells, monitoring piezometers, dewatering system and implementing schedule

The areas that will be affected by extracting this groundwater

Assess the potential impacts of groundwater usage and disposal as a result of mine

dewatering

Assess the zone that will be influenced by use of this groundwater.

Moreover, the block developers also designed dewatering programs and schedules.

Groundwater control is discussed in 3.4 Hydrology.


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(3) Quality Control

Issue: Consumers usually require a stable quality of coal with characteristics such as low ash

and low moisture content. Lessons learned from Lakhra: In Lakhra Power Plant, the coal

supplied by the Lakhra Coal Development Company (LCDC) seems to be of lesser quality

than the one required by the boilers, resulting in accelerated deterioration over a short period.

Similarly, mismatch between required quality and supplied quality were reported in Thailand

and Mongolia.

Proposed Action: Selective mining and coal processing must be applied to obtain a product

with stable and acceptable quality. The following actions and studies are needed to make

selective mining practical and effective:

Careful exploration and geological correlation study with enough infill drillings;

Mining planning: detailed selective mining by skilled mining engineers and technicians;

Reducing in-seam dilution during mining coal operation;

Crushing and screening;

Laboratories at stockpiles/check the quality of ROM from each area; and

Making the feed quality to power plant suitable for use using blending at the stock yard.

Proposed Actions for Power Plants:

Confirm the delivered coal from the mine stock yard is acceptable, and record the quality of

each stock; and

Blending coal of stock piles into most suitable quality level.

3.2.2 Estimation of ROM

Coal-bearing section in Thar coalfield usually consists of coal parts and interburden materials.

Thin partings are interbedded in the coal parts. Selective criteria on coal mining are decided

before mining planning in concerned areas. One example is shown in Figure 3.2-1 below.


3 - 19

Source: Borehole data: U.S. Department of Interior/U.S. Geological Survey

Open-File Report 94-167, with additions by JICA Survey Team

Figure 3.2-1 Selective Mining Criteria Example

- Coal seam > 0.5 m thick ---- extracted independently as coal - Partings < 0.3 m thick ---- extracted together with coal - Coal seam < 0.5 m thick ---- removed as rock - Partings > 0.3 m thick ---- removed independently

Estimation of run of mine (ROM) is very important for coal processing system and planning of

coal-fired power plant.

3.2.3 Controlling Spontaneous Combustion

Low-rank coals like lignite are more susceptible to spontaneous combustion than high-rank

coal like bituminous coals. When lignite is stacked, and air reaches the middle of the stockpile,

oxidation starts and heat is produced within the stockpiled coal. This heat may not be able to

escape, and in the warmer environment, the reaction rate of oxidation increases. If the pile is

left long enough and air percolates into it, then in extreme situations, it can catch fire

uncontrollably. As a result, mine operators must put up a sign or evidence of the susceptibility

of their particular lignite and take precautions accordingly (IEA Clean Coal Centre, April 2004).

Lignite tends to become powder easily when it lignite dries. Oxidation takes place at the

increased surface area among coal fragments. Furthermore, in case of coal piled up at stock

yard, the heat produced could not easily escape, and will remain inside. This is the most

common phenomena leading to spontaneous combustion. Other lignite resources in the world

are positively applied with various anti-oxidation methods to suppress the spontaneous

combustion. Transportation by truck is carried out without problems in other countries. Lignite

experts and coal thermal power generating engineers in Pakistan are recommended to adopt

the best technology.


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3.3 Mining Technology for Surface Mining

3.3.1 Mining Equipment and System

(1) Historical Review of Mining Plan for Block II

Many studies have been carried out for Block II including the geological study by USGS.

Obtained information on mining plan for Block II are as follows:

Table 3.3-1 Mining Plan for Block II

Year/Month Prepared by Outline

1994/May John T Boyd (USA) Comparison between large BWE and large T&S2004 RWE (Germany) Comparison of large BWE and large T&S

Shovel 42 m3, 21 m3 Dump Truck : 300 ton, 150 ton Surface Miner

(referred large scale lignite mine in Germany)2004 Shenhua Group(China） Production Level : 3.5 million ton/year 2010/August RWE Two options (Variant 1, Variant 2) remain as

possible mining system: Variant 1：

Overburden removal by T&S、 Lignite extraction by T&S, ICC and BC

Variant 2： Overburden removal by T&S, WTS, BC and

Spreader Lignite extraction by T&S, ICC and BC

BWE will be examined during T&S replacement. 2010/October SECMEC，SCIGE，

RWE Final selected equipment are 6 m3 excavators and 55 ton dump trucks Surface miner will be utilized for obtaining lignite. Crusher and belt conveyor will be used for lignite transportation.

2012/September

SECMEC (ESIA study)

6 m3 excavators and 55 ton dump trucks for overburden removal. 2-6 m3 excavators for obtaining lignite. Semi-mobile crusher and belt conveyor for lignite transportation

Source: TCEB

All the studies selected the open-cut mining method. Moreover, the recommended most

applicable equipment are the BWE and T&S. The studies compared the advantages and

disadvantages of each system; however all the studies were prepared after 2010, which

showed negative opinion on BWE. Thus, this recommendation is reasonable if local conditions

such as equipment transportation from port to the mining site, erection works at site, and

flexibility of the operation are taken into consideration.


3 - 21

(2) Outline of the Mining Plan for Block II

The latest mining plan referred from the “Thar Coal Block II Mining Project Environmental

and Social Impact Assessment” prepared by Hagler Baily ( September 3, 2012), are as

follows:.

Total production

360～380 million tons of lignite

Production level First phase 6.5 million tons （for 1200 MW） Second phase 13.0 million tons （for 2400 MW） Third phase 22.8 million tons （for 4000 MW）

Mining method Surface mining (Open Cut method) T&S

Mining area The southern one-third area of the Block II, the initial mining area, which is about 20 km²

Overburden removal

Overburden from construction and the initial stage will be dumped in an outside waste dump area located in the eastern corner of Block II. The dump will have a volume of 586 million m3 and will reach a maximum height of 88 m.

Dewatering Surface water and groundwater inflows into the mine pit will be dewatered using submersible pumps installed in sumps at the base of the open pit. The rate of disposal has been estimated at 990 liters per second (l/s). The effluent water from the wells will be collected through a network of pipes to a main sump from where it will be disposed through a disposal system to be developed by the GoS.

Mining equipment

Excavator 2–6 m3 Dump Truck 55 tons x 136 units Semi-mobile crusher 1000 tons/h x 2 units Belt Conveyor

Coal storage Coal will be delivered via haul trucks to the crusher, where it will be crushed to sizes less than 300 mm. Crushed coal will be delivered to the coal storage yard having a capacity of 450,000 tons, by belt conveyors. The stockpiles within the coal storage yard will reach a maximum height of 12 m. The coal storage yard will be partially enclosed with a 15 m high wind shield wall around the perimeter of the yard.

Mine Service Facility (MSF)

A centralized mine service area covering 52 ha of land is proposed. The facilities and services in the area will include offices, social facilities, workshops, spares and consumables stores, fuel storage, operation control room, canteen, locker room, training center, polyclinics, fire station, laboratory, water treatment, water supply, etc.

Water supply Raw water required for the mining operation is about 6000 m3 per day. GoS will supply the required water.

Power supply During construction and the initial phase of operation, power will be supplied by diesel generators. Subsequently, power will be provided from the power station based in Thar coalfield.

Fuel supply Annual High Speed Diesel (HSD) consumption is estimated to be about


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55 million liters. Average consumption is about 150,700 liters/day. Fuel storage for 15 days is required.

Wastewater disposal

About 1000 m3/d of wastewater will be produced. Wastewater will be treated in a treatment system, and the treated water will be used for dust suppression. Mine Service Area 370 m3/day (0.15 cusec) Township 500 m3/day (0.20 cusec) Oily water (mine service) 160 m3/day (0.07 cusec) The water will be treated by Membrane Bioreactor (MBR).

Housing colony A new township with an area of 150 ha will be developed near the village of Bitra in the northeast corner of Block II to house 3000 to 4000 people. It will have its own hospital, shopping areas, education facilities, and recreational areas.

Fire protection Fire protection system will include a central fire water network with adequately located fire hydrants, monitors, pumping station, fire extinguishers, and a fire brigade. To prevent self-ignition of the lignite on mining bench, coal seam will only be completely exposed from the overburden just before excavation. Similarly, dust suppression on the stockyard and at the lignite transfer point will be done. At the stock pile, lignite delivery will be controlled, and delivered within 15 days.

Employment : The mining project would require employment of between 1200 and 1600 skilled and unskilled workers. As a policy, preference will be given to persons from the local communities and the region for the jobs related to mining activities. As the persons with required skills are not available locally in Thar, a training program will be initiated for suitable persons from the local communities in order to perform the jobs offered by the mining project.

(3) Validity of the latest Mining Plan

1) Validity of Mining System

In the 2010 study, T&S method was recommended for the initial stage, while BWE was

set aside as a future option. ESIA study prepared by Hagler Bailly Inc., submitted in

September 2012, included the mining plan, which has the same concept as the 2010

study although minor corrections were made. Such concept is reasonable. At the initial

stage of the development, removed overburden using T&S will be transported to the

outside dumpsite area. In pit dump or backfilling will be carried out after suitable

conditions are established. T&S method will also be used for obtaining lignite. Then, the

lignite will be crushed using semi mobile crusher located at the pit side, and transported

to the stock pile through a belt conveyor. If the mobile crusher will be utilized at the pit

bottom, shifting of the belt conveyor and multiple transfer points will be required, which

are complex tasks. Operational control is easier if the trucks will haul up to the top of pit

and crush the lignite, which will be transported through belt conveyors.

It is recommended to remove the partings as much as possible during lignite extraction.


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For this purpose, small shovels, bulldozer and front end loaders will be required. As the

slope stability of upper sand zone is weak, slope angle must be kept in a low angle. The

latest plan includes this concept, which is reasonable.

Utilization of a mining contractor for pre-stripping of the overburden at the initial stage of

the development is included in the plan. This leads to minimizing the initial investment.

Contract between owner and contractor could be on an Rs/BCM basis. However,

dewatering of the underground water using water wells could be the owner’s

responsibility. Considering the improvement period for the access road from port to the

mine location, mobilization of small equipment could be arranged by the contractor.

2) Validity of the Equipment Selection

Final selected equipment shown in ESIA prepared by Hagler Bailly is reasonable. Sizes

of equipment are in conformity to the improvement plan of the road.

At the initial stage of development, mining contractor may use smaller equipment which

can be purchased easily and can be utilized for the other projects after completion of the

contract.

Improvement plan for the road is discussed in Chapter 5, but the main objective of the

road project is to provide access for the transportation of the mining equipment to Thar

coalfield development, and to improve logistics and worker’s transportation. The

dimensions and weight of the mining equipment considered for road design are 5.5 m

width by 5.5 m height, and 350 ton maximum weight, respectively. This size and weight

conform to the equipment selection described in the ESIA prepared by Hagler Bailly.

Required number of 136 dump trucks shown in ESIA is almost the same as the

estimation made by the JICA Survey Team, which appears to be a realistic quantity. The

131 units of dump trucks as the final selected equipment, stated under “Thar Block-II

Coal Mining Project, Bankable Feasibility Study Presentation to BOD” is close to the 136

units required. ESIA however, did not mention about the quantity of 6 m3 shovels.

Considering the handling performance of a 6 m3 shovel and total volume of materials to

be moved, estimated required number of shovels will be about 26 units. Consequently,

allocated dump trucks per shovel are about 5 units. As “Thar Block-II Coal Mining Project,

Bankable Feasibility Study Presentation to BOD” stated 26 units, both reports are

reasonable. Wide open pit needs to be allocated for the 26 shovels. Multiple benches are

necessary for Thar deep pit development, and thus, allocation of 26 units is suitable.

Semi-mobile crusher and belt conveyor system is described in ESIA for the lignite

transportation. Since long transportation distance is expected in the future, application of

this system is ideal. “Thar Block-II Coal Mining Project, Bankable Feasibility Study


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Presentation to BOD” described the 1.4 m width with 2000 tons/h transportation capacity

as the belt conveyor specification. This capacity is sufficient for dual operation of two

crushers with a capacity of 1000 tons/hour. The 2000 tons/hour capacity is sufficient for

6.5 million tons of annual production, while 742 tons/hour is the minimum capacity if the

conveyor system can operate for 24 hours/day and 365 days.

There are two types of crusher equipment namely, mobile type mounted on a crawler and

semi-mobile type mounted on a skid. Considering the required accelerated rate of pit

mining, semi-mobile crusher is recommended for this project. Consequently, crusher

relocation and belt conveyor extension will be carried out periodically.

It is recommended that the lignite transported by dump trucks will be dumped and

stocked temporarily beside the crusher. Then front end loader (FEL) will load the lignite to

the hopper of crusher. Movable hopper will be installed on the belt conveyor so that the

lignite will not spill out from the conveyor. Direct loading from dump truck to the conveyor

seems to be more efficient. However, this method may cause problems considering the

dumping height of the dump truck, and in case the conveyor breaks down, operation of

the dump trucks will also be stopped. Nevertheless, even if the recommended system is a

double handling system, advantages still govern over these problems.

3) Validity of the Other items in the Plan

a. Annual fuel consumption：55 million liters of annual consumption are described in

ESIA. As the annual production is 6.5 million tons, 8.5 liters will be required for one ton

production. Hence, fuel cost will be the major portion of production cost. Such quantity is

almost the same as the estimation made by the JICA Survey Team, which is realistic.

Since average consumption of fuel is about 150 kiloliters, transportation and storage will

be vital.

b. Manpower : Around 700 workers are estimated for the bigger T&S fleet for example,

20 m3 shovels and 200-ton dump trucks. For middle size fleet as described in ESIA,

around 1200 staff and workers are the estimated direct manpower. Total labor cost will

not be a major portion of the production cost even if the total employment is 1200-1600

staff and workers in Pakistan. Thus, the manpower plan is also reasonable. In the future,

labor cost may increase, leading to increase in production cost. If the road condition will

be upgraded in the future, upsizing of the equipment fleet is worth to consider.

In this region, there are no experiences on coal mine development using heavy

equipment. Job performances of operators are very important for efficient lignite

production. Considering that training of operators is important, the development plan is

suitable as it includes a training program. Moreover, the training for maintenance staffs is


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required.

c. Prevention of the spontaneous combustion: Prevention plan against spontaneous

combustion is necessary. As the lignite may cause spontaneous combustion in a short

amount of time, it will not be realized until just before obtaining lignite. Also, the maximum

storage duration of lignite at stock yard shall be limited to 15 days.

d. Dewatering: Even if rainfall is not considerable in the area, the mining pit should be

kept free from inflow of rain water. Aquifers are confirmed in the area, and it is necessary

to lower the underground water level before mining activity commences. Dewatering plan

is also required since dewatering by well pumps and in pit drainage is included in the

plan. Capacity of the dewatering system should be reviewed based on actual conditions.

Wastewater disposal plan is also essential. The water will be discharged to the

system to be prepared by the provincial government after being treated. Some of the

treated water can be utilized for dust suppression of the mining activity.

Water drainage system using well pumps is utilized at some coal mines. For example, in

the coal mine located at the seashore of Semirara Island in the Philippines where the

elevation of the pit bottom is lower than sea level, pumping well to extract water is

required. Another example is the Baganuur coal mine in Mongolia, where water with high

iron content is discharged to the river after being treated.

In case of the underground coal mines with high underground water quantity, dewatering

boring will be drilled in advance to develop the gallery.

e. Water Supply: There is a possibility that the wells for local people will run dry due to

dewatering for mining activities. Hence, appropriate water supply from other sources

such as Nabisar reservoir is planned.

f. Electric Supply: It is reasonable to provide diesel generators for the initial

development stage. Also, it is essential that electricity be available after the

commissioning of the mine-mouth power plants.

g. Mine Service Facilities (MSF): The MSF plan including the construction of the office,

residence, workshop, and warehouse is necessary. At the initial stage of development, it

is the normal for mining contractor to construct temporary camps for their use.

h. Mine Closure Plan: Method of closing the mine is necessary to be studied before it is

opened. Thus, it is necessary to consider mine closure plan in the overall plan.

Dump pits in mined out areas will be backfilled. However, as the volume of lignite is huge,

backfill materials are not enough to restore the original ground shape, even if materials

will be transported from outside the dump. From the viewpoint of economic development,


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the final shape of pit (or hole) should be accepted. After stopping the well pumps,

underground water level will rise, and the pit will turn into pond. Monitoring of the water

quality will be continued as well as its treatment, if necessary. Water level in the wells for

the people may increase; however, monitoring of the water quality must continue.

Vegetation and landslide protection should be taken into consideration for the outside

dumping area.

(4) Study of Mining System at Adjacent blocks

The information obtained on the adjacent blocks is limited. The mining system can be

estimated through published information such as environmental assessment.

1) Block I

Global Mining (China) studied the mining method using dragline, BWE, and T&S. Four

methods remained as “Selected Mining Alternative”, but final selected method is not

clear. Among the methods are BWE and T&S, which are both included in “with Surface

Miner” and “without Surface Miner” cases for thin lignite seams.

2) Block IV

Oracle is planning to operate using T&S method. The adjacent mines also share the

same issues to be cleared such as road, water supply, wastewater disposal, etc.

3.3.2 Cost Performance

Price of a coal quality similar to Thar lignite in the international market is lower than US$30 per

ton. Even if the Thar coalfield has issues such as weak strength of the covering material and

big amount of underground water, lower stripping ratio is very attractive for development.

Consequently, the stripping ratio in Thar is as attractive as the average of that of other

countries.

As mentioned, price of similar coal is lower than US$30 per ton. In other words, this is

profitable since production cost is much lower than this price. In case of Thar coal

development, production cost may not be so high because of the low stripping ratio. Also, the

short transportation distance is advantageous to the customer. Another advantage is the lower

labor and construction cost in the township, as it will promote manpower employment.

In the report “Thar Coal Power Generation Potential 2008”, the result of the study by Shenhua

prepared in 2004 was included. The study was for 600 MW and 3.5 million tons of lignite

production. Estimated investment cost was CN¥3,765 million (US$454 million). BWE’s


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estimation of the initial and replacement investment for 6.5 million tons per year in 30 years is

about US$2,000 million. Considering the service life of the equipment, initial investment cost

might be less than US$1,000 million.

The JICA Survey Team reviewed the investment cost and production cost. Investment cost

estimation by the JICA Survey Team for 6.5 million tons of annual production is nearly double

that of the Shenhua study, which is mainly due to the difference in production level. It is also

realized that the JICA Survey Team estimation is similar to that of the RWE study.

Conditions of the study are as follows:

Annual production 6.5 million tons Mining system Truck & Shovel Heavy equipment 6 m3 Shovel, 55-ton Dump Truck Mining schedule As of Table 3.1-4 Average stripping ratio As of Table 3.1-4, average 6.98 : 1 for 30 years IRR Estimated with 20% of Incentive for equity portion Interest rate 10％ (referred to KIBOR) Fuel cost Referred to market price Labor cost Referred to JETRO report

The production cost was estimated by the JICA Survey Team by referring to the former report

and abovementioned conditions. Major components of the production cost are fuel, parts and

maintenance, and depreciation of the heavy equipment. In order to minimize these costs,

training for operators and maintenance staff are important. Moreover, management of

equipment utilization is important. Maintaining the high availability and utilization of equipment

is a key factor in minimizing the production cost. In order to avoid the risk of spontaneous

combustion, stable production and delivery of lignite is also important. In other words,

production level of the mine and consumption of power station should be at the same level.

Considering the estimated production cost corresponding to the service life of the mine, cost is

not so high due to the low stripping ratio. However, long pre-stripping period gives a significant

impact for the production cost in the initial development stage. In order to overcome this impact,

20% of incentive IRR for the equity portion is offered for the project owner. In this condition, the

short payback period can be achieved, making the condition attractive to investors. Even if the

price is much higher than international coal prices, national profit should be taken into account.

Hence, working opportunity and savings in foreign currency are achieved through the Thar

coal development.


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3.3.3 Japanese Coal Mining Technologies

(1) History of Japanese Coal Industry and Its Current Status

In Japan, combustible rock “coal” was found during the 15th century. History of its coal industry

is more than 250 years old. Coal played an important role for the primary energy in Japan,

which produced 56 million tons of coal from around 600 coal mines in 1940. Then, during and

after the World War II, production was reduced, but increased again to 55 million tons in 1961

as its peak volume. During this period, top primary energy source of power generation has

changed from hydraulic to coal. Gradually, coal production had been reduced due to energy

conversion from coal to oil, and low price of imported coal. Many coal mines were unable to

withstand these circumstances and stopped production.

In the year 2010, total coal consumption in Japan was about 185 million tons, including

thermal coal and cooking coal, but more than 99% were imported from overseas.

Presently, small coal mines are operating in Hokkaido area, where one coal mine produces

coal from underground mine, while the other seven coal mines produce by open cut method.

The total annual production from these mines is about 1.2 million tons, and less than 1% of this

is for domestic consumption. Most of the coal is consumed at the power station in Hokkaido,

where a power station located at its inland area was designed for domestic coal. Hokkaido coal

has the advantage of cheaper transportation cost compared with imported coal, which needs

to be transported on a long distance through the sea port.

(2) Open Cut Mining Technology

As mentioned above, open cut mines are operating only in Hokkaido. Generally, such mines

are operating in the mountainous area with steep and complex geological conditions, and

small scale T&S fleet is utilized for production. Hence, the Japanese open cut coal mining

technology is not an applicable reference for Thar coal development.

In Japan, rehabilitation of mined out areas is strictly controlled by the government, and

vegetation of the waste disposal area is necessary. Also, land stability and wastewater control

are considered important even after closing the mine.


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Source: CRME

Photo 3.3 -1 Open Cut Coal Mine in Hokkaido

(3) Underground Mining Technology

In Japan, several underground mining methods have been applied. For a long time,

small-scale manual underground operation was the major mining method. In order to

improve productivity, mechanized mining method was introduced in some mining areas.

The coal mines are supported by the government coal policy. Moreover, technology was

improved using government subsidies. The following are the major underground mining

technologies applied in Japan:

1) Fully Mechanized Longwall Mining Method

Fully mechanized longwall mining method is widely applied in many countries including

the USA and Australia. Japanese coal mine also utilized this method for flat coal seams.

The productivity of this method is very high compared with other mining method.

Although mining recovery is high initial investment is large.

Roof of the longwall face is supported by a power roof support (PRS) operated using

hydraulic oil (high pressure emulsion). Coal face is cut by double ranging drum shearer

mounted on the armored face conveyor (AFC). AFC convey the coal to the stage loader

equipped with the crusher, and discharge to the tail end of the main gate belt conveyor.

After cutting the coal face, PRS will advance to the front by hydraulic shifters.

A plow which slices the coal face in a plane is also utilized instead of the double ranging

drum shearer.


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Source: CRME

Figure 3.3-1 Fully Mechanized Longwall Mining Method

Source: JCOAL Training Material

Photo 3.3-2 Fully Mechanized Longwall Face

2) Single Prop and Iron Bar Mining Method

Instead of PRS, roof of the longwall is supported by a single prop and iron bar. Until the

fully mechanized longwall method was introduced, this method was widely used in

Japan. Chain conveyor is utilized for flat coal seam, and gravity transportation is utilized if

the dip of the coal seam is more than 20 degrees.

Both manual and mechanical means of obtaining coal can be applied under this method.

The two types of single prop are hydraulic type and friction type. Currently, hydraulic type

is the most common and widely utilized in the world such as in Chinese and Vietnamese

Power Roof Support

Drum Shearer

Drive Unit of AFC

Stage Loader

Coal Seam


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coal mines.

After cutting the coal face, iron bar will be extended, and single prop will be installed.

Then, face conveyor will be shifted to the face and recover the prop and iron bars from

coal (mined out) side.

(a)Plan view 1.Single Prop 2.Iron Bar 3.Wood 4.Conveyor 5.Shearer 6.Install 7.Remove (b)Detailed (c) Cross section

Source: JCOAL Training Material

Figure 3.3-2 General Layout of Single Prop and Iron Bar Method

3) Room and Pillar Mining Method

Room and pillar mining method is also known as board and pillar. In this method, coal

pillar remains unrecovered, and roof can be maintained without collapse or free from

surface subsidence. In Japan, this method was widely utilized with manual means of

obtaining coal until the longwall mining method was introduced. In recent years, this

method was not common in Japan. In other countries, room and pillar method using the

continuous miner and shuttle car is adopted. Coal recovery ratio is lower than the


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longwall mining method. However, although investment cost for this method is cheaper

than that for fully mechanized longwall method, its productivity is lower. After advancing

to the mining border, it is possible to recover the pillar for high mining recovery. However,

the surface is not free from subsidence.

Source: JCOAL brochure

Figure 3.3-3 Concept of the Room and Pillar Mining Method

Source: Equipment manufacturer

Photo 3.3-3 Continuous Miner

4) Saw Mining Method

Saw mining method was applied for steep coal seams with a dip of more than 30

degrees. Usually, productivity of this method is low because of manual operation, but the

coal can be recovered in steep coal seams where mechanized method is difficult to use.

Investment cost is low but backfill materials are necessary. Pneumatic coal pick is used

to obtain coal, or blasting is performed for higher productivity. Coal will flow down to the

gate gallery by gravity, and transported to the surface through belt conveyor or mine cars.


3 - 33

Source: Mitsui Coal Mining

Figure 3.3- 4 Conceptual Layout of Saw Mining Method

5) Hydraulic Mining Method

Hydraulic mining method utilizes remotely operated hydraulic monitor (canon). Coal

seam is cut or crushed using high pressure water. A huge amount of water is required for

this method, as the coal is flown down with water through the flumes. After dewatering,

coal will be transported through a belt conveyor or mine cars. Special geological

conditions will be necessary for this method considering that the roof and floor materials

should have high strength to prevent collapse. Moreover, selective mining is difficult with

this method since the top sulfur layer of the upper portion of the coal cannot be

separated.

A-A” cross section

Plan view

Upper Gallery

Lower Gallery

Face dip 28-30 degrees

Goaf (Mine out)

Filled with Rock

FlumeFlume


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Figure 3.3-5 Conceptual Cross Section of Hydraulic Mining Method

Source : CRME

Photo 3.3-4 Monitor (Canon) for Hydraulic Mining Method

6) Other Coal Mining-Related Technology in Japan

In order to produce a competitive price of coal with high safety level, several

technological improvements have been attempted in Japan. The following technologies

are still commonly adopted in the world:

- Centralized monitoring system for underground coal mine;

- Gas and dust explosion, and spontaneous combustion countermeasures;

- High speed transportation system; and

- Integrated coal preparation technology.

Source: CRME


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3.4 Hydrogeology

3.4.1 Groundwater Situation

The Thar coalfield area has at least three aquifers. However, the classification of aquifers

varies from the reports for each block, although aquifer conditions are almost the same.

Subsequently, the groundwater situation will be explained on the basis of Block II aquifer

classification (Sindh Engro Coal Mining Company, 2010). These aquifers with columnar

section are shown in Figure 3.4-1 while the characteristics of the aquifers are summarized in

Table 3.4-1.


Figure 3.4-1 Aquifers in Thar Coalfield Area

Table 3.4-1 Characteristics of Aquifers

Name of Aquifer Lithology Depth /

Thickness (m)

Recharge Permeability

(m/sec)

(1) Sand Dune Aquifer Bottom of sand dune, fine grained silty yellowish sand

50–60 / 0–5

Rainfall, 10 mm/year

7 x 10-6

(2) Coal Seam Roof Aquifer (Subrecent Aquifer)

Bottom of subrecent, silty to coarse sand with partly substantial fractions of fine gravel

115–120 / 0–12

Poor (Indian side)

1 x 10-4

(3) Coal Seam Floor Aquifer (Footwall Aquifer)

Bottom of Bara formation, medium to coarse sand, partly silty with more or less numbers of small clay (stone) beds

180–190 / 30–50

100 Mm3/a From

Northeast (Indian side)

1 x 10-4 (pure sand)



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Most of the Thar village people depend on groundwater in sand dune aquifer for their domestic

consumption and cattle use. Groundwater in other aquifers is used only to a limited extent, in

some deep wells. The groundwater in all aquifers is of brackish quality with TDS values in the

order of around 3,000 to 8,000 mg/L (Sindh Engro Coal Mining Company, 2010).

(1) Sand Dune Aquifer

Sand dune aquifers exist all over Thar coalfield as well as in the Indian side. The thickness of

this aquifer is only around 0 m to 5 m. The groundwater table is, in general, about 50 m to 60 m

below ground surface, which is just at the boundary between sand dune and subrecent

formations. Groundwater level fluctuates up to 2 m. The aquifer sediments consist of fine

grained silty yellowish sand. The permeability is in the order of 7 x 10-6 m/sec.

Recharging of this aquifer is direct through rainfall infiltration. It may not exceed 10 mm per

year due to the low rainfall of around 200 mm per year, and high potential evaporation of about

1900 mm per year.

(2) Coal Seam Roof Aquifer (Subrecent Aquifer)

Coal seam roof aquifer is formed at the base of the subrecent formation. It is spread out all

over the Thar coalfield area. It consists of silty to coarse sand with partly substantial fractions

of fine gravel, which has a thickness from almost 0 m to about 12 m with an average of 6 m. Its

permeability varies but could be in the average value of around 10-4 m/sec.

Recharging of this aquifer is from the Indian side where the subcrop sediments beneath the

sand dune is about 200 km to the northeast from the Thar coalfield. The aquifer is confined.

The pressure head compared to the overlying sand dune aquifer is partly below the subrecent

aquifer, and partly at the same level or even above.

(3) Coal Seam Floor Aquifer (Footwall Aquifer)

Coal seam floor aquifer covers the whole Thar area and is the main aquifer in the region. It has

a varying thickness of about 30 m to 50 m (Block II) and about 60 m (Block I). The aquifer is

made up of medium to coarse sand, partly silty with numerous quantities of small clay (stone)

beds. The permeability of pure sand is about 1.5 x 10-4 m/sec. Due to the intercalations of

claystone beds, a total permeability of 10-4 m/sec was adopted for the groundwater model

calculation.

Groundwater recharge is also from the Indian side where this footwall aquifer subcrops


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beneath the sand dune about 200 km to the northeast. The aquifer is confined and has high

water pressure. Dewatering from this aquifer is the key issue to keep the mine safe and dry.

3.4.2 Dewatering

Dewatering will include surface and groundwater handling. These systems are generally

independent and are critical for ensuring dry and safe mine operation.

(1) Surface water dewatering

In Block II, surface water dewatering at the bottom of a bench is designed on the basis that

dewatering time for storm rainfall event (100 mm in 1 day) is 12 days. Dewatering of normal

monthly average rainfall of 80 mm will be 1–2 days. To prevent rainwater from entering the pit

from surrounding areas, two flood control dams are planned to be constructed (Sindh Engro

Coal Mining Company, 2010).

(2) Groundwater dewatering

To estimate the amount of groundwater to be dewatered, numerical groundwater model,

GWDREI, based on the finite volume method is used for Block II. The result of this simulation

can be applied to the other blocks because general groundwater situation is almost the same

as Block II.

This model for Block II is a quasi 3-dimensional multi-layer groundwater model. Modelling area

is 9,700 km2 and has a perimeter of some 400 km. The developed groundwater model consists

of 2 aquitards and 3 aquifers. The flow in the aquifers is assumed to be 2-dimensional

horizontal while the flow in the aquitards is assumed 1-dimensional vertical. Model settings,

analytical conditions and boundary conditions, as well as the parameters and cases are

summarized in Table 3.4-2, Table 3.4-3, and Table 3.4-4, respectively.

Theoretically, a total of more than 110 single or multilayer wells of 600 mm diameter will be

drilled during the lifetime of the mine to keep it dry. According to the results of the simulations,

groundwater volumes to be pumped will be around 35 Mm3/a from 2012/2013 up to 2024.

Thereafter, the volumes will steadily decrease to 25/20 Mm3/a at the end of the mining

operations. Most of this water is pumped from the footwall aquifer (90%), while the subrecent

aquifer and sand dune aquifer will deliver about 9% and less than 1%, respectively.

The pumped water from all aquifers is brackish with TDS of up to 10,000 mg/l and high

concentration of NaCl. The water will be discharged to the artificial disposal lake located about

7km from Runn of Kutch and Ramsar site through pipeline to be prepared by GoS


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Impact of dewatering on the local groundwater table is expected to be limited on the basis of

the results of the simulations. However, the sensitivity analyses has shown the possibility of

high permeability of 1 x 10-7 m/sec of aquitard between sand dune aquifer and subrecent

aquifer may cause the groundwater in the sand dune aquifer to seep into the subrecent aquifer.

The infiltration simulation has been carried out to determine if the sand dune aquifer will be

affected by the dewatering. The infiltration wells must be placed in the subrecent aquifer. A

total of about 13 wells would be necessary with an infiltration rate of around 15 L/sec (Sindh

Engro Coal Mining Company, 2010).

There is enough time to minimize the influence in sand dune aquifer on the basis of the

simulation. The most important thing is that the groundwater table of the first aquifer has to be

monitored carefully.

Table 3.4-2 Model Settings, Analytical Condition and Boundary Condition

Model Setting Area 9,700 km2

Perimeter 400 km

Analytical Conditions

Application (Code) GWDREI

Analytical Method Finite Volume Method

Analysis Period

2012–2100 (89 years) - 2017 mine bottom reached - 2045 end of activities - approx. 2110 groundwater levels stable (i.e., when the final lake shows no rising water table)

Time step 1 year

Initial Condition Observed GW contour

Aquifer Parameter Refer to Table 3.4-3

Analytical Case Refer to Table 3.4-4

Calibration Model

Effective Recharge 5.15 mm/year

Shallow Well Abstraction 5.15 mm/year

Pumping Rate of Deep Tubewells

4 wells - 100,000 gal/day (whole year) - 80,000 gal/day (whole year) - 75,000 gal/day (half year) - 25,000 gal/day (half year)

Boundary Condition North, west, and south-west: Interpolated water levelSouth-east: no-flow boundary (Rann of Kutch Fault)

Prediction

Dewatering wells Total 110 single or multilayer wells of 600 mm diameter

Infiltration wells Installation in 2nd Aquifer

Inside Dump Kf = 2.0 x 10-7 m/s

Final Lake Lake Surface Potential Evaporation = 1700 mm/y (1900 mm evaporation – 200 mm rainfall)



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Table 3.4-3 Analytical Parameters

Formation Aquifer / AquitardPermeability

[m/s]

Specific Storage Coefficient

[1/m]

Effective Porosity

[–]

Dune Sand Dune Sand 7.00 x 10-6 1.00 x 10-5 0.25

Sandy silt / clay 1st Aquitard 5.00 x 10-9 – –

Middle/coarse sand Subrecent 1.00 x 10-4 1.00 x 10-5 0.30

Coal seams / clay 2nd Aquitard 1.00 x 10-9 – –

Footwall sand Footwall 1.00 x 10-4 1.00 x 10-5 0.30


Table 3.4-4 Analytical Cases

Case Scenario Condition

Simulation I Basic simulation of calibrated model Refer to Table 3.4-3

Simulation II

The influence of the mine on the first aquifer (Sand Dune)

1st aquitard : Kf = 5.00 x 10-8 m/s

Simulation III 1st aquitard : Kf = 1.00 x 10-7 m/s

Simulation IV Infiltration simulation on the basis of Simulation I to minimize the influence on the 1st aquifer

Infiltration rate = some 6 Mm3/a

Simulation V Recovery period and development of residual lake without any infiltration and production wells

Potential evaporation = 1700 mm(on the lake surface)

Simulation VI Determination of the influence on dewatering quantities when the 3rd aquifer has a higher permeability than assumed

3rd Aquifer Kf = 1.50 x 10-4 m/s (50% increase)



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3.5 Development Information for Other Similar Coalfields

3.5.1 Comparison with Other Coalfield in South Asia

(1) Neyveli Coalfield

Lignite mining all over the world is being carried out under complex hydrogeological

environments causing a range of water problems affecting the production method and

utilization of run-off mine coal. There are a lot of practical examples of large lignite deposit

developments in the world. Neyveli lignite deposit in South India is among those with similar

geological conditions. There are no technical difficulties in developing this lignite field and

producing lignite from a deep place.

The lignite seam in Neyveli lignite deposit was first exposed in August 1961, and regular

mining of lignite commenced in May 1962. Neyveli Lignite Corporation Ltd. is producing

approximately 24 million tons of lignite from four O/C pits, and feeds the lignite to mine-mouth

power plants (Total capacity 2740 MW). Comparison of geological conditions between Thar

coalfield and Neyveli coalfield is shown in Table 3.5-1.

Table 3.5-1 Comparison of Geological Conditions between Thar Coalfield and Neyveli Coalfield

Thar Lignite Coalfield Neyveli Lignite Deposit Geological age of coal- bearing formation Bara formation (Pliocene) Miocene age

Thickness of lignite 0.2 m-22.8 m (cumulative thickness 0.2 m– 36 m), Max 20 lignite seams 8 m– 27 m

Overburden condition Upper strata: dune sand 14 – 93 m (ave. 50 m) sand silt clay Lower strata: Alluvial deposit 11 – 209 m (ave.150 m) sandstone. siltstone

Cuddalore sandstone 45 m to 103 m (lateric-clayey very hard sandstone )

Unconfined aquifer Sand dune aquifer 0 m– 5 m thick. The groundwater table is in general about 50 m to 60 m below ground surface.

49.5 m thick aquifer above lignite Cuddalore sandstone

Confined aquifers

Coal Seam Roof Aquifer (Sub-recent Aquifer) 0 m to about 12 m thick Coal Seam Floor Aquifer (Footwall Aquifer): 30 m to 50 m (Block II) and about 60 m (Block II) and about 60m (block I)

2 aquifer zones under Lignite zone Upper : 27 m thick Lower : very thicker extending to the bottom of the basin, upward pressure of 6 kg/cm2 to 8 kg/cm2

Resources 1 75.506 Billion Tons 2 Billion Tons of Lignite Reserves

Annual production 5 million tons (Block I) 6.5 million tons (Block II), 2.4 million tons (Block VI),

Mine I 10.5 million tons, Mine I - A 3.0 million tons, Mine II 15.0 million tons, Barsingsar 2.1 million tons

Strip ratio 6.6 : 1 (m3 : t) 7.0 : 1 (m3 : t)Quality coal rank Lignite B to Sub-bituminous A Lignite (no coal rank data) Moisture (AR) 46.77% 53.00%Ash (AR) 6.24% 3.00%Volatile matter (AR) 23.42% 24.00%Fixed carbon (AR) 16.66% 20.00%Sulphur (AR) 1.16% 0.6%Heating value (Ar.) 5,774 Btu/lb (3,208 kcal/kg) 2,400 kcal/kg

Source: Base data from TCEB (Thar) and Neyveli Lignite Corporation Limited Web Home page


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Base map: The Times Atlas of the World

Figure 3.5-1 Location Map of Thar and Neyveli Coalfields

Source: PPIB Pakistan’s Thar Coal Power Generation Potential 2008 Source: R.N.Singh, A.S.Atkins, A.G..Pathan 2009


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Figure 3.5-2 Cross-Section Showing Different Aquifers in

Block III, Thar Coalfield

Figure 3.5-3 Neyveli Lignite Deposit Aquifers

Neyveli development introduced the German excavation technology in open cut mining, using

BWE, conveyors and spreaders, which is used in this mine for the first time in India. While

overburden thickness varies from 50 m- 95 m, lignite thickness varies from 10 m- 23 m. The

overburden to lignite ratio in this mine is 5.5 at the beginning. Recent figures on production and

overburden are shown in Table 3.5-2. Overburden removal amount has been increased

recently. Mining system including BWE, conveyors and spreaders appears to be effective.

Table 3.5-2 Production and Strip Ratio in Neyveli Lignite Mine

Target Actual Target Actual Target Actual Target Actual Target Actual

Overburden　(106m3) 15.2600 15.9425 13.9900 14.6344 13.1200 13.5826 11.9500 12.8700 11.9500 11.9659

Lignite　　(106t) 2.1750 2.2338 2.1140 2.1307 2.0050 2.1586 2.0400 2.1014 2.0400 2.0435

Strip Ratio 7.0 7.1 6.6 6.9 6.5 6.3 5.9 6.1 5.9 5.9

2005 -20062009 -2010 2008 -2009 2007 -2008 2006 -2007

Source: Neyveli Lignite Corporation Limited Web Home page

Neyveli Lignite Mine’s production capacity is not huge compared with Thar lignite projects;

however, the BWE mining system is effective because it has been adopted for a long time.

Meanwhile, T&S method is effective for the first time in Pakistan.

(2) Neyveli Power Stations

Courtesy : Website of Neyveli Lignite Corporation Limited


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Photo 3.5-1 Thermal Power Station-II in the Neyveli Coalfields

There are four thermal power stations for each mime-mouth in the Neyveli Coalfields1. One of

power station named the Thermal Station-ｌｌ is shown in Photo 3.5-2. And the outline of each

station is shown in Table 3.5-3. At present, It is ongoing the 2 new project, which is adopted

2x250MW each. The one is the replacement for existing thermal power station I, and the other

is the expansion of the thermal power station II.

Table 3.5-3 The Outline of Thermal Power Stations in the Neyveli Coalfield

Station Name Unit number & Capacity

Total Capacity Remarks

Thermal Power Station - I 6x 50MW 3x100MW

600MW

Pulverized coal fired Drum type (sub-critical) Boiler

Thermal Power Station - II 7x210MW 1,470MW

Thermal Power Station – I Expansion

2x210MW 420MW

Barsingsar Thermal Power Station 2x125MW 250MW

Total 2,740MW

Source: Neyveli Lignite Corporation Limited Web Site

It is shown the Thermal Power Station I of schematic diagram in Figure. The each unit is

adopted pulverised coal fired type boiler and the wet type cooling system. The other plants are

assumed to be also adopted the same system.

1 http://www.nlcindia.com/index.php


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Source : 600MW Thermal Power Station-1 Neyveli Tamilhadu

Figure 3.5-4 Schematic Diagram of Electricity Generation