Pakistan is dependent upon the imports of thermal coal to meet its domestic requirement especially for the power sector. According to the data maintained by CoalMint, Pakistan has imported about 14.5 MnT of coal in CY19 which is marginally down by 1.51% against 14.7 MnT in previous year of CY18.
The highest imports by Pakistan with regards to thermal coal were made from South Africa at 11.06 MnT in CY19, up by 22% y-o-y basis, followed by Indonesia at 3.21 MnT (was 3.89 MnT in CY18).
If we look at the coal imports made by various sectors in Pakistan during CY19, highest imports were from Power sector at 7.05 MnT (up by 0.45% y-o-y), followed by cement sector at 3.60 MnT (up by 17% y-o-y) and by traders at 1.54 MnT (down by 39% y-o-y).
The outlook ahead
About 60% of Pakistan’s energy requirement comes from fossil fuels that include coal. Despite the government’s plan to promote renewable, the investment in coal continues due to a vicious cycle of unpaid debts, major losses due to shoddy transmission lines and power theft.
The country’s domestic coal reserves in Thar desert – one of the largest untapped coal deposits in the world – may be cheaper than the imported coal, but it is a particularly dirty type of coal with low energy content. This necessitates higher quantity of coal to be burnt to produce power resulting in high carbon emissions. Subsequently, the country has to depend upon imports to meet its coal requirements.
As per the reports, the country is adding up two more power plants this year that will depend upon the imports to meet their coal requirements which means that Pakistan’s coal imports may continue to surge in the years ahead.
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