Oracle coalfields to deliver Thar Coal feasibility this quarter

Friday, 15 Jul 2011

Oracle Coalfields is making progress with its key Block-VI lignite Thar coalfield in Sindh as the company plans to deliver the definitive feasibility study by the Q3 of 2011 which could then be converted to the critical bankable feasibility study.

They said that more than 6,000 meters of drilling was carried out at Block-VI by the company between August 2010 and February as part of a field work program to support DFS of the area. Early indications are encouraging, suggesting Block-VI holds 1.4 billion tonnes resource with 371 million tonnes of reserves.

The sources said that Oracle might begin producing coal there by 2014 with the southern part of Block-VI, known as Phase I, considered to be the most suitable for the initial phase of open pit mining. Assuming a positive outcome to the DFS Oracle would have to raise the capital expenditure required for the project.

Alongside the importance of completing assessment of Thar and getting it into production, Oracle Coalfields is also very keen to supply coal for local power generation so it is not directly affected by changes in the international spot market price for coal.

It had already signed MoU with Karachi Electric Supply Company in December 2009. Under the terms of the MoU, the 2 parties have agreed to collaborate towards developing an initial 300 MW mine mouth power plant to be supplied with lignite coal from Block-VI.

They said that for long term contracting for Thar output in January 2010 Oracle Coalfields secured a potential off take deal with Lucky Cement, Pakistan’s major producer and exporter of cement whereby Oracle Coalfields will supply Lucky Cement’s kilns with coal as it develops the Block-VI project into a mine.

The sources said that MoU between Sindh Carbon Energy Limited and Mines and Mineral Development, Government of Sindh was signed in November 2007, regarding the exploration and development of Block-VI, Thar Coalfield. Subsequently an exploration licence was issued to SCEL.

The government has decided not to go for a cheaper and long term initiative to produce electricity by denying funds to the Thar Coal Underground Gasification project. The government had allocated a mere PKR 2.5 million for the project being taken care of by leading nuclear scientist and member Planning Commission, Dr Samar Mubarakmand.

They said that in the new public sector development program the paltry amount earmarked for a project of crucial importance for Pakistan is hardly anything compared to the estimated total cost of PKR 126.649 million which, only up to June is PKR 20 million.

(sourced from TheNews)