SSRL, SECMC achieve $1.3bln financial close

KARACHI: Sino Sindh Resources Limited (SSRL) and Sindh Engro Coal Mining Company (SECMC) have attained financial close on their respective mining and power projects in Block-I and Block-II of Thar coalfield, underpinning an investment of $1.301 billion for additional 10.6mtpa coal extraction.

Chief Minister Sindh Murad Ali Shah, addressing a ceremony on Wednesday, said SSRL achieved financial close on its $1.08 billion 7.8mtpa coal mine and two electricity generation plants of 660MW each being developed in Thar Block-I. The SECMC, he said closed the deal for the ongoing $215 million expansion of its coal mine from the existing 3.8mtpa to 7.6mtpa, which would feed coal to two additional 330MW mine mouth power plants.

These plants are being established by Thar Energy Limited (TEL), a joint venture of Hubco, Fauji Fertilizer Company and China Machinery Engineering Corporation (CMEC); and Thal Nova Power Thar Limited (TNPTL), a joint venture of Hubco, Thal Limited, Novatex Limited and CMEC. They would likely come online by mid-2021.

The expansion and construction of power plants would increase power output from Thar Block II to 1,320MW, while the basket coal tariff would also reduce by approximately 30 percent to $44/ton, cheaper than imported coal arriving at port at $46.315/ton, an SECMC statement said.

“The power tariff of existing Thar coal-based power producers will be lowered by Rs2.07/KWh, resulting in savings of approximately Rs9.29 billion on an annual basis. With the completion of this phase II, Pakistan is expected to record foreign exchange savings of more than $100 million every year on account of lower fuel imports,” it added.

Sindh Energy Minister Imtiaz Ahmed Sheikh said the financial close of SECMC’s Thar Block-II mine expansion would enable the authority to reduce Thar coal tariff, while taking the total power output from Thar Block II to 1,320MW.

“Government of Sindh is fully committed to ensuring that the benefits of this huge indigenous resource are not only passed on to the consumers, but more importantly this project becomes an engine of prosperity for the people of Thar,” he added.

SECMC CEO Syed Abul Fazal Rizvi said, “The expansion of this mining project is a key step towards ensuring energy security for Pakistan and delivering on our commitment to provide Pakistan with an abundant, economical and indigenous energy source.”

SECMC is a joint venture company with the government of Sindh, Engro Powergen, Thal Limited, Hubco, Habib Bank Limited, CMEC, and State Power International Mendong (SPIM). The company is responsible for extracting lignite coal form its mining concession of Block II in Tharparkar. SECMC’s coal mine in Block-II has the potential to produce over 37 million tons of coal per annum translating into 5,280MW of electricity at less than six cents per KWh for over 50 years.