Oracle Coalfields coal price petition for its Thar coal and power project in Pakistan has been admitted by the Thar Coal and Energy Board (TCEB) of the Sindh provincial government – a crucial step in the development of the project. The petition asked for a coal price of US$76.48/t over the 30 yr period of the lease.
"The admission of our coal […] is an important milestone for the company and represents the latest step towards our goal of developing a producing mine capable of supplying indigenous coal,” said Shahrukh Khan, CEO of Oracle.
The TCEB will now determine the feasibility stage coal price and, on this basis on this, Oracle will be able to apply for an initial electricity tariff for the power plant. The coal price will be redetermined in a further petition after the EPC contract price for the mine is finalised, and then again periodically through the lifetime of the project as costs are updated.
The coal pricing regime in Pakistan is a cost-plus arrangement under which mining lease holders in the Thar desert are allowed to set a coal prices that gives a dollar-based internal rate of return of 20%.
The project envisions a 4 million tpa lignite mine with a mine mouth power plant in the Thar desert in southeast Sindh Province, Pakistan. Mine capital costs are estimated at US$879 million with mine financing of US$615 million already agreed with Sinosure, the Chinese Export Credit Corp. and other financial institutions; the remaining costs will be sought in equity.
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/exploration-and-development/12082015/oracle-coal-price-petition-admitted-2719/