ISLAMABAD: Pakistan has launched a major reform to shift Thar coal mining operations from diesel to grid, a move expected to save up to $30 million annually in foreign exchange and cut power generation costs by more than 60 per cent, the Power Division said on Wednesday.
The initiative, spearheaded under prime ministerial oversight and led by Minister for Power Awais Ahmed Leghari, aims to eliminate costly diesel use in mining operations, replacing it with electricity drawn from the national grid to improve efficiency and reduce tariffs.
Officials said the transition will slash daily diesel costs by about Rs25 million, with annual savings driven by reduced fuel imports. The cost of electricity used in mining is projected to fall from roughly 33 cents per kilowatt-hour to around 13 cents, or lower under the B4 tariff, significantly easing the cost of coal-based power generation.
The reform targets longstanding inefficiencies in Thar, where mining operations consumed up to 250,000 litres of diesel per day, including 35,000 litres used solely for dewatering. These costs, treated as pass-through charges, had been inflating electricity tariffs for consumers.
To address this, the authorities collaborated with the Thar Coal Energy Board, National Grid Company and Hesco to develop grid infrastructure. Mining operators in Block-I and Block-II have committed about Rs5.3 billion to connect with the 132-kV Islamkot grid station, enabling an offtake of around 60MW.
Beyond economic gains, the shift is expected to cut carbon emissions by 80,000 tonnes annually, with further plans to electrify mining vehicles as part of broader decarbonisation efforts.The Power Division said the move will ease pressure on foreign exchange reserves, improve grid utilisation and ultimately translate into more affordable electricity for consumers.
