Engro set to benefit from coal extraction, despite environmental concerns

As the rest of the world moves away from non-renewable sources of energy, Engro, Pakistan’s largest private-sector conglomerate, expects to benefit from extracting coal, reported The Economist.

Eight years ago the company bought the rights to one of 13 blocks, containing 1 per cent of Thar’s 175 billion tonne coal reserves. To work on coal extraction, Engro formed the country’s biggest ever public-private partnership, the Sindh Engro Coal Mining Company (SECMC), in which it digs and the state provides infrastructure. With no other competitor in sight, SECMC began work last year.

However, environmentalists disagree with the planned coal extractions citing its harmful effects to the environment and stress that renewable and more environmentally friendly and cost-effective sources like solar power should be exploited instead.

“To such qualms, the government offers three rejoinders. First, severe power shortages have long blighted the nation, and renewable sources cannot offer the daylong, year-round power it needs. Second, coal accounts for less than one per cent of current generation, compared with 70 per cent in neighbouring India and China. And third, domestic coal would allow the country to forgo expensive imports of the fuel for newly built power stations, a drain on fast-dwindling foreign-exchange reserves,” stated The Economist.

The project is a part of the infrastructure projects under China-Pakistan Economic Corridor (CPEC) and hence has China’s backing. Engro has completely relied on Chinese financing for this project as most western banks refused. It is important to note here that, China is moving away from non-renewable sources of energy at home, while it is promoting the same in Pakistan. “Handling the extraction at Thar is the China Machinery Engineering Corporation, a state-owned firm with expertise beyond Pakistan’s reach,” reported the Economist.

The company is expected to reach the coal by mid-2018, which will feed a power station owned by Engro and three others owned by SECMC partners. According to The Economist, these power stations will produce one-fifth of the country’s electricity for the next 50 years, and Engro looks set to financially benefit from the deal.




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