GOVERNMENT SHOULD EXPLOIT DOMESTIC COAL RESERVES TO BRING STABILITY INTO CEMENT PRICES – ICCI PRESIDENT

 Pakistan is facing acute shortage of housing units while rising cement prices due to phenomenal rise in coal prices in the world market are negatively impacting construction activities in the country and government should take measure to exploit local coal reserves to bring stability into the cement prices, stated Muhammad Ijaz Abbasi, President, Islamabad Chamber of Commerce and Industry.
ICCI President said coal is a major input in cement manufacturing as Pakistani cement industry largely depends on coal and use fine coal to extract maximum heat while these stocks of fine coals are imported from abroad apart from partially using local coal from Quetta. However, coal prices in the world market has gone up by 85 per cent compared to last year while the situation has been further aggravated by depreciation of the rupee causing sufficient hike in cement prices.
Muhammad Ijaz Abbasi said about 30 sectors are associated with construction industry and slump in this industry due to rising cement and steel bars prices affects the performance of all these sectors, rendering thousands of people jobless and making it difficult for people to build housing units or undertake other construction projects. He said coal prices vary from $140 to $200 per ton in the world market and Pakistan should try to exploit its own coal reserves instead of depending on imported coal. He said imported coal proves very costly to Pakistan as the ships carrying coals use oil as fuel and the surge in oil prices has increased the cost of transportation.
ICCI President said the sharp rise in the cost of coal in the country was also because of depreciation of the rupee against the US dollar which has depreciated by over 20 percent against the dollar since the beginning of this year thus adding 20 percent to the cost of imported coal. He said the higher input cost would make cement dearer, ultimately hitting the construction industry already under pressure from the hike in real estate and iron prices.
He said the higher coal prices will also add burden on the foreign exchange reserves of the country falling sharply since October 2007 while by exploiting domestic coal reserves, Pakistan can save its foreign reserves.
 ICCI President said Pakistan has huge coal reserves in Lakhra (Sindh) which are still buried in the desert of Thar region and in Balochistan. Therefore, government should lure foreign and domestic investors to exploit these domestic coal reserves to bring stability in cement prices, to enhance its energy sources and to ease pressure on its depleting foreign exchange reserves, he concluded.