Pakistan cement industry to consume 2.9Mt coal

Pakistan cement industry to consume 2.9Mt coal
Published: 29 May 2007

The Pakistan cement industry is likely to consume 2.8 to 2.9Mt of coal in the current financial year, a leading coal importer told Daily Times, as coal import sees a significant increase. Najeeb Balagamwala cited the massive capacity expansion undertaken by the industry as the reason for the rise in import. Up until this month, importers have brought around 2.6Mt of coal for cement companies. By contrast, in all of the previous fiscal year, the industry had used 2.22Mt of coal.

Pakistan imports coal mainly from Indonesia, South Africa and China. It has also imported coal from Australia and Russia, but in smaller amounts. Balagamwala said that it is expected that the country would import over 3Mt in the next fiscal year, as the cement industry keeps expanding. According to him, the coal import would have been much higher, but bhatta owners have now started to buy local cement because of the high prices of imported coal. Previously, they bought 0.3 to 0.4Mt from importers. Since the price of coal rose, that demand is no longer there, he said.

Import of coal into the country had started increasing a few years ago because of growing demand by the cement industry after it switched its plants from fuel oil to coal to reduce cost of production.

Pakistan has around 178 billion tonnes of coal reserves, with the reserves in Thar at an estimated 175 billion tonnes. Pakistan produces 3.2Mt of coal every year, but most of it is not up to par. As local coal mines are not mechanised, miners have to go 500-1000 feet deep, which increases cost of production.

A coal-washing plant, imported from the United Kingdom, has recently been set up at Dhabeji at a cost of Rs 50m, with a capacity to purify 2,000tpd. Both local and imported coal is being washed in the plant, making local coal consumable for industries. Three more plants are currently being installed in Punjab. Coal-washing plants ensure that the coal has fewer impurities, which reduces the production cost of cement industry. Cement makers have to use expensive imported coal because the locally available coal does not meet their specific requirement. Coal is the cheapest source of thermal energy used in industrial sector, having the potential to replace other expensive fuels such as furnace oil. Local coal has a higher sulphur content than imported, rendering it unable to produce the required heat level. This makes it acceptable for power plants, but not for cement plants. In addition, local coal suppliers often fail to deliver at the appointed time.