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Shamsuddin A. Shaikh CEO, Sindh Engro Coal Mining Co [email protected] +92-300-829-3039
27th February 2014
Thar Desert contains the world’s 7th largest coal reserves:
Location of Thar Coal Field
Source:: GSP data/report – Energy equivalent is based on Shenhua report/RWE
• Thar Block II has been allocated to SECMC
• According to Competent Person Report (CPR) by RWE - Germany, Thar Block-II contains 2 Billion tons of Lignite reserves, out of which 1.57 Billion tons are exploitable. Thar Block-II alone can produce 5,000 MW for 50 years!
• Mine Lease for 30 years (extendable to 60 years) has been issued to SECMC for Block II
1% = 25% Pakistan’s Power
Generation Capacity in 2010 – 5000MW
Thar Coal Reserves
Thar
PAKISTAN
175 Billion
Ton Total Thar Coal
Reserve
50 Billion
TOE More than Saudi Arabia & Iranian
Oil Reserves
2000 TCF 68 Times higher than Pakistan’s
total gas reserves
Thar Lignite
2
Thar Coal fields can be compared to many operating Open Pit Mines of the World - Thar has comparatively higher heating value, lower sulphur & lower ash contents than other operational mines in the world:
Stripping Ratio and Heating Value of Thar Block II is feasible for successful Mine Operation (e.g. Hambach Mine in Germany, producing ~40 Mt/a lignite whose specs are in fact inferior to Thar Lignite )
Thar Lignite can be utilized in Power Plants both at mine mouth as well as suitable locations like Jamshoro as lignite can be transported as being practised in places like India, China & Germany
By using properly designed de-sulfurizers and ash removal units, Thar coal can produce cheap electricity while meeting the most stringent international environmental standards
Thar Lignite – Comparison with World Lignite
Comparison of Thar Block II with Other International Mines
Deposit Heating Value
(Net) (KCal/kg) Sulfur (%) Ash Moisture
Stripping Ratio (m3/t)
Thar Block II 2770 1.07 7.8 47.46 6.12
Gujarat, India 2600-3000 3.4-5.9 9-12 38-40 9 – 14
Hambach, Germany 1911-2747 0.2–0.4 2-5 48-52 6.3
Maritza East - Bulgaria
1550 4.5 19-35 54 1.7
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THAR COAL QUALITY AND ECONOMICS COMPARES FAVORABLY WITH OTHER LIGNITE MINES AROUND THE WORLD
*Imported Indonesian Coal – 5200 kcal/kg based on CERA forecast (1st October 2013) **Comparison with Imported coal is based on HHV basis (all values in Real Terms)
Plants on Thar Coal will always have higher despatch & merit order versus those on Imported Coal
Scale Advantage of Thar Coal Mine
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
3.5
4.5
5.5
6.5
7.5
8.5
9.5
10.5
11.5
12.5
13.5
14.5
15.5
16.5
17.5
18.5
19.5
20.5
21.5
22.5
23.5
24.5
25.5
26.5
27.5
28.5
29.5
30.5
31.5
US
D/M
MB
TU
No. of Years from start of Physical Work
Thar Coal with Expansion Indonesian 5200 kcal - CERA forecast
3.8 Mt/a (660MW) Thar Power Company + Jamshoro ADB Plant 1.2Mt/a
7.3Mt/a (1320MW)
14.4 Mt/a (2640MW)
CERA Coal Price Forecast – (CIF Karachi)
USD/MMbtu has been used for comparison basis as it is the most accurate way of comparing coals of
different heating values and qualities
21.5 Mt/a (3960MW)
4
5 3
4
5
6
7
8
9
10
3.5
4.5
5.5
6.5
7.5
8.5
9.5
10.5
11.5
12.5
13.5
14.5
15.5
16.5
17.5
18.5
19.5
20.5
21.5
22.5
23.5
24.5
25.5
26.5
27.5
28.5
29.5
30.5
31.5
32.5
US
c/k
Wh
No. of Years from Start of Physical Work
1320MW
2640MW
3960MW
*Price of Indonesian Sub bituminous coal CIF is based on CERA Forecast Graph shows Weighted Average Tariff at 85% Load Factor
All values in real terms
Promise of Thar for Pakistan
660MW - Thar Power Company + Jamshoro ADB Plant
Power Plants on Imported Sub-bituminous Coal
Power Plants on Thar Coal
Thar Coal – Savior for Pakistan
Thar coal being an indigenous resource, will result in huge Forex savings (that will grow as the mine off-take increase)
Imported coal will only provide a short-term relief to the Pakistan’s Energy crisis; however, being linked with international prices, it carries the same risk of unaffordability in future like RFO
Furthermore, as the levelized tariff cost (USc/kWh) is much lower than other options and the National Average Tariff, Thar Coal will help reduce Circular Debt 6
Comparison of Different Options Available for 1200MW
Fuel Type Thar Coal Imported Coal LNG RFO
Levelized Tariff (USc/kWh) at 85% Load Factor*
7.8 8.8 12.3 18.9
Estimated Fuel Cost for Power Generation (PKR Bn/annum)
33 39 92 143
Estimated FX Outlay (USD Mn/annum)
93 362 850 1,324
*includes cost of infrastructure required apart from Transmission Line
Thar Coal – “Indigenous Strategic Energy Resource” that will guarantee
energy security to Pakistan in the decades to come
Environmental Impact Assessment
Mining Project
Environment & Social Impact Assessment study for Mining Project has been
completed by SRK UK & Hagler Bailly Pakistan
Environmental studies fully complement requirements of the Feasibility Study and
indicate there are no significant or unmanageable environmental threats due to mining
in Thar Block-II
Public hearing was conducted in Nov 2012, subsequent to which NOC was issued by
SEPA for Mining Project
Power Project
THARCO has completed ESIA of Power Plant with Hagler Bailly Pakistan & RWE
Germany
Design meets all relevant NEQS and IFC guidelines for emissions and effluents
Approval from SEPA expected in April 2014
7
BOTH THE PROJECTS FULLY COMPLY WITH WORLD BANK STANDARDS AND NEQS!
Mining Project Update
Detailed Feasibility Study for the Mining Project has been completed by internationally renowned German & Chinese consultants (RWE & Sinocoal)
Firm technical & commercial bids from Four Chinese EPC contractors have been received for development of 3.8Mt/a mine (660MW equivalent) and currently being evaluated – Announcement of EPC contractor expected by March 2014
Pakistan Environmental Authorities (SEPA) have given go-ahead for this project
Site team has been mobilized and 6,000 acres of land has been acquired for which no relocation is required
Coal Tariff Petition has been submitted to Coal Regularity Authority (TCEB) for determination – Decision is expected within next 90 days
8
MINING PROJECT IS READY FOR EXECUTION!
