Oracle Coalfields PLC, the developer of a lignite mineral property in the south-eastern desert of Sindh Province, Pakistan, has signed a Joint Development Agreement (JDA) with China CAMC Engineering (CAMCE) for development of its Thar Coalfield mine and power plant project. CAMCE is a subsidiary of China National Machinery Industry Corporation (SINOMACH), which is a major Chinese state-owned enterprise.
The JDA, which will remain in place for two years from September 24, includes a package of financial and construction measures.
- CAMCE will assist Oracle in seeking the debt financing which is likely to come from Chinese banks for construction of the mine and power plant and the capital expenditure shall be underwritten by SINOSURE, the Chinese export and credit insurance corporation.
- Debt will be used to finance up to two-thirds of construction costs.
- Subject to a competitive price being agreed, CAMCE and Oracle will sign an Engineering, Procurement and Construction (EPC) contract for the coal and power plant project under which it is expected that mine and power plant development will commence in the second half of 2014; production at the open pit mining operation will start in 2015; and the power plant will have a production capacity of 300MW.
Oracle chairman Adrian Loader says, “This is an important step forward for Oracle and its shareholders and brings us to within two years of our coal mine being in operation. The Board of Oracle is very grateful to CAMCE for their involvement in our project and for their assistance in seeking the debt funding.”
Oracle CEO Shahrukh Khan says, “With CAMCE we are in strategic alliance with a first-class group with strong engineering and project management credentials. Their international relationships will bring significant benefits as we move this project forward, not least in the area of additional funding.
“Initially we will be producing 2.4 million tonnes of coal per year which will supply a 300MW power station. Eventually we hope that this will grow to production of 5-6 million tonnes of coal per year for an 1100MW plant.”
The JDA was signed at a ceremony in Beijing which was attended by officials from the Government of Pakistan, senior executives from CAMCE, Chinese financial institutions and the Board and management of Oracle.