SMEDA assigned the task to M/s Dilroze Khan & Co (Chartered Accountants) to carry out a detailed feasibility study covering resources of raw material, target users market and selection/identification of a commercially viable Coal Briquetting Plant in order to ensure subsequent investment in the area. The feasibility study envisages providing basic relevant information specifically concerning coal reserves and its production with relevance to the establishment of such plant.
The study said that out of total Pakistan coal reserves of 186.28241 billion tons; 122.99 million tons occur in Fata. Looking at the energy shortage, it is felt that there is a dire need to explore/exploit and value add the resources on scientific lines to ensure its judicial use in the development of Fata. In order to maximize benefits of this valuable natural resource; it needs to be value added in form of coal Briquetting in planned manner.
The establishment of coal Briquetting plant is an attempt towards value addition of coal resources to create new jobs opportunities and develop a culture for setting up industrial units based on local raw material in Fata. The proposed venture will also reduce the cost of living and cost of production in other related industries and will also reduce dependence on wood, being normally used as energy source in Fata.
The study covers important activities focusing on collecting and evaluating various information and primary data regarding resources of raw material, target users' market and introducing suitable technology for manufacturing of coal briquettes, ideal location in proximity of coal mining clusters, particularly in Orakzai Agency and Darra Adam Khel, as coal from these areas is qualitatively better than other areas of Fata. As such sites at Kurraize, Orakzai Agency and Akhurwal, near Spina Thana in FR Kohat have been identified.
Laboratory tests of two coal samples from Orakzai Agency and one from Darra Adam Khel were conducted at SGS Pakistan (Pvt) Limited. According to international standard, the acceptability levels of Ash and Sulfur in coal are below 15% and 1% respectively. However, average sulfur content in coal from these areas is 3%. From the comparison, it was observed that the sample from Orakzai Agency is comparatively better.
Two types of technologies have been proposed in the study. Honeycomb sample coal Briquetting plant with a production capacity of 2 tons per hour, as in operation in Afghanistan and the other fully automatic plant with production capacity of 15-16 tons per hour, which has been envisioned in the present study in light of the coal production from Fata.
The projects economics depicts that with investment of Rs 69.054 million including initial working capital of Rs 14.613 million, the project will earn in the second year at the gross profit/sales 17.42% net profit/sales 9%, commercial break even point 31% and return on investment 53%. The competitive price analysis would show that there would be considerable saving of 42% and 43% in case of commercial consumers and household consumers respectively. In case they use coal briquettes as alternate energy/fuel source, the project would create 49 direct and 200 indirect job opportunities.
The encouraging results of the study show that setting up of coal Briquetting Plant in Fata is technically and economically viable.
Copyright Business Recorder, 2017