Oracle Coalfields raises cash reserves to 1.469 million British pounds

KARACHI: Growing equity base of the UK energy developer Oracle Coalfields Plc in Thar has atoned with its increased operational loss in six months to June 30, 2015 – that shows the company may succeed in balancing debt-equity ratio in the coal mining and power project.
The energy developer of a combined lignite coal mine and mine mouth power plant in Thar announced that its cash reserves rose manifold to 1.469 million British pounds as on June 30, 2015.
“As expected for a mining company at our stage of development, our financial results for the six months to 30 June, 2015 show an operational loss for Oracle Coalfields PLC Group of 0.528 million pounds compared with a loss of 0.377 million pounds last year,” Adrian Loader, chairman at Oracle Board said.
However, the group’s total assets minus current liabilities surged to 6.706 million British pounds as of June 30, 2015 compared with 3.85 million pounds a year earlier.
“The power shortage in Pakistan remains acute and the government remains steadfast in its objective of dealing with the country’s energy crisis and government continues to support the company in the development of the coal mine and power project,” Loader added.
The company has made good progress in a number of critical matters this year, notably the equity placing in February, inclusion in the China-Pakistan Economic Corridor, admission by the Thar Coal and Energy Board of a coal price petition and formation of Thar Electricity (Private) Limited.
The company is working towards financial closure. Detailed discussion on the engineering procurement and construction contracts is currently underway with Chinese partner Shangdong Electric Power Corporation (SEPCO).
The company is expected to sign an EPC term sheet with SEPCO, marking agreement on a number of key issues ahead of the full EPC contracts. Discussion has commenced on financing with Sinosure, the China Export and Credit Insurance Corporation.
TEPL has registered its 600MW mine-mouth power plant project with the Private Power and Infrastructure Board. This will include entering into a power purchase agreement with the National Transmission and Dispatch Company and a government of Pakistan guarantee for power delivery payments leading to determination of the electricity tariff.
“We are grateful for the investor support the company has received to date and remain on course in our ambition to develop Pakistan's first large scale coal mining and power plant project in the private sector,” Shahrukh Khan, CEO of Oracle Coalfields said.
Pakistan’s installed electricity generating capacity is around 23,000MW, with a current shortfall in generating capacity of some 5,500MW.
This gives rise to frequent load-shedding, particularly in rural areas. At present electricity is generated from imported gas and heavy fuel oil, at a significant cost in foreign exchange. Studies suggest that electricity demand will grow five to six percent annually over the coming ten years, more if growth development plans succeed.
Thar deposits were discovered in 1991 by Geological Survey of Pakistan and the United States Agency for International Development. It is one of the world’s largest lignite deposits spread over more than 9,000 sq km, and comprising around 175 billion tons, sufficient to meet the country’s fuel requirements for the foreseeable future.
Though the quality of Thar coal is not generally suitable for export, it is suitable for in-country power generation and its development could meet much of present shortages and the pent-up demand for electricity. It could also save substantial amounts of foreign exchange as a substitute for imported fuel.