Articles /
Imported coal or local coal: which is cheaper this year?
The question we hear most from industrial buyers this autumn is simple: has imported coal got expensive enough that local coal makes more sense? For many, the answer is now yes.
What happened to imported coal
With the Strait of Hormuz disrupted since February, gas has been short across the region and more power plants and factories have turned to coal, pushing its price up. Richards Bay coal, the usual reference for Pakistan, averaged about 114 dollars a tonne in July to September, and around 133 dollars landed here with freight.
Pakistan's power plants are burning far more of it. Imported coal generated 2,155 GWh of electricity in September, more than double a year earlier, at a fuel cost of about Rs 17 a unit. Plants on local coal produced power for about Rs 6 a unit, ProPakistani reported on 19 October.
Compare cost per unit of heat, not per tonne
A tonne of imported coal and a tonne of local coal do not do the same work. The fair comparison is the price divided by the heat value.
Take Sor Range coal at about Rs 47,000 a tonne delivered to Punjab and around 6,500 kcal/kg. Compare that with your landed imported coal price, plus inland freight from Karachi port to your site, divided by its own heat value. Do the sum with your own numbers and your own analysis sheets.
Where imported coal still wins
Imported coal is usually lower in sulphur and more consistent from shipment to shipment. If your boiler or kiln has a tight sulphur limit, or your process cannot handle variation, it may still be the right choice, or at least the base of a blend.
It also comes in large volumes, which suits the biggest plants.
Where local coal wins
Price, mostly. Also no letters of credit, no exposure to the dollar, no port waiting time, and smaller lots: you can buy one truck at a time.
For brick kilns, small boilers and many textile units, Balochistan coal has always been the practical fuel. This year it is also competitive for larger users who used to buy imported coal only.
A sensible way to test it
Buy one or two trucks of local coal, run them alongside your imported coal, and measure fuel used per unit of output. Ask for the lab analysis with each truck. The numbers from your own plant will tell you more than any price sheet.
Prices are indicative, per tonne, excluding sales tax, and change week to week. See today's sheet or ask us for a confirmed price.
