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34 Vision To position Sindh as the power house of the region Mission To develop Thar Coal as a major source of power generation for Energy & Economic Security of the country and as a Hub of Petro Chemical Industry Goal To generate at least 10,000 MW by 2020 We offer Huge proven reserves with authentic data Higher returns for investors Business friendly policies & environment Excellent incentives, concessions & protections ii

35 Table of Contents Thar Coal The Most Attractive Investment Opportunity 01 Quality of Coal at Thar 02 Investment Status in Thar Coalfield 03 Fiscal Incentives for Development of Indigenous Coal Resources 04 Investment Opportunities in Thar 05 Procedure for Allocation of Blocks 05 Environment & Social Studies 06 Water Master Plan 06 Thar Coal Resources at a Glance 07 Thar Coal & Energy Board - its role & functions 08 Composition of Thar Coal & Energy Board 09 Thar Coalfield Blocks Layout 10 Infrastructure available at Thar 11 Infrastructure planned at Thar 12 iii

36 Thar Coal - Means to Energy Security in Pakistan Thar Coal the most attractive Investment Opportunity 1. World s biggest lignite reserves Pakistan s coal resource potential is estimated to be around 186 billion tonnes out of which 175 billion tonnes are found in Thar the largest lignite deposit in the world. Thar Coalfield is located 360 km from Karachi port in the south eastern arid zone region of Pakistan which is one of the most peaceful & harmonious area of the country. Thar Coal resources have an estimated potential of generating 100,000 MW of electricity for a period of 300 years; thus, providing an opportunity for large scale mining & power generation over a long period of time. 2. Central part of future Energy Mix in Pakistan To address the persistent energy gap, the large indigenous coal (lignite) resources at Thar in Sindh Province form an integral part of Pakistan s long term energy security strategy. Thar resource has a very good potential to be a viable option for providing dependable indigenous source of energy. Development of Thar is envisioned to emerge through a partnership of government and the private sector, wherein the private sector would assume investment risk subject to viable commercial market conditions and the government would provide the enabling environment necessary to facilitate such investments. 1

37 Quality of Coal at Thar Thar lignite has a stripping ratio of 6:1 and heating value of 5,000 to 5,500 Btu/lb which is better than many lignite resources being successfully used for mining and power generation: India s Neyvelli lignite has a stripping ratio of 7:1 and heating value of 5,200 Btu/lb. Total generation based on Neyvelli lignite is more than 2,700 MWs. Hungary s lignite has stripping ratio of 9:1 and heating value of 3035 Btu/Lb and power generation above 1800 MWs. Germany s Rhineland lignite having stripping ratio of 4.9:1 and heating value of 3830 Btu/lb and is fueling power generation of more than 10,200 MW. Comparison of Thar with Other International Mines Deposit Stripping Ratio (m³ : t) Heating Value (MJ/kg) Thar 6.6 : Kosovo 1 : Rhenish Area, Germany 4.9 : Hambach, Germany 6.3 : Hungary 9 : Greece 10:

38 Investment Status in Thar Coal Field GoS has developed 12 blocks so far covering around 1000 sq km out of 9100 sq km. The status of on-going Projects is given below: Status of Projects at Thar Coalfield Thar Coal Blocks Block-I Global Mining Company of China Open cast Mining of 10 mtpa 900 MW Coal supply to local thermal plants and cement industry after briquetting Block-II Sindh Engro Coal Mining Company (JV: 40% GoS; 60% Engro) Open cast mine of 6.5 mtpa & 1200MW Block-V UCG Project Under Ground Coal Gasification Project 2X50 MW IGCC Power Plant Planned Block-VI Oracle Coalfields, PLC (UK) Open cast mine of 5 mtpa MoU signed with KESC for 300MW Status / Timelines Bankable Feasibility completed March, 2012 Mining Lease issued May, 2012 Coal Production to start by 2015 Power Generation by Bankable Feasibility completed 31st Aug Mining Lease issued August, 2011 Project financing activity continued. Chinese Funding through JEWG is being solicited 36 bore holes have been drilled. Test Burn done in Dec Power Plant of 8-10 MW is being established. Detailed Feasibility Completed Oct Mining Lease issued May 2012 Start of Mine development by mid

39 Fiscal Incentives for Development of Indigenous Coal Resources The following set of incentives are available to facilitate investors for development of indigenous Coal resources of Sindh for Mining and Power Generation. Special Economic Zone Thar Coalfield is declared has been declared as Special Economic Zone and all Development Project in Thar region (including coal mining and power generation) have been declared as Projects of National Security. Guaranteed Rate of Return 20% (dollar-based) IRR is guaranteed to firms which achieve Financial Close before 31st December, 2015 for Mining & Power Generation based on indigenous coal and additional 0.5% i.e. 20.5% IRR for firms which achieve Financial Close by 31st December, Exemptions/concessions Zero percent customs duties on import of coal mining equipment and machinery including vehicles for site use. Exemption on withholding tax to shareholders on dividend for initial 30 years. Exemption on withholding tax on procurement of goods and services during project construction and operations. Exemption for 30 years on other levies including Special Excise Duty, Federal Excise Duty, WPPF and WWF. 4

40 Investment Opportunities in Thar Coal include: Streams of Investment: The investors may enter into Joint Venture with existing Project Developers or may opt for acquiring new Blocks for any of the following business opportunities. 1. Coal Mining 2. Integrated Coal & Power Generation Project 3. Mine Mouth Power Project 4. Underground Coal Gasification 5. Coal to liquid Technologies 6. Briquetting- Dried lignite from Thar can be transported and utilized by retrofitted Thermal Power Plants and industry 7. Any other utilization which may be proposed by project sponsors Procedure for allocation of Blocks Sindh Mining Concession Rules spell out concession award procedure which is also available at our website The successful applicant will get Exploration License after signing an MOU with Sindh Coal Authority. The Exploration license is generally granted for bankable feasibility studies (BFS) for a period of one year extendable on valid grounds. The license holder shall be required to submit reports on quarterly basis. The exploration license granted can be cancelled if conditions of MoU or Exploration License are not fulfilled. After successful completion of feasibility report, the Exploration License shall be converted into Mining Lease in accordance with the provisions of Sindh Mining Concession Rules Investors are expected to submit credible financing plans for the project including debt/equity financing. Sindh Coal Authority shall provide all available data of the exploratory work conducted in a Block to the holder of Exploration License free of charge. The investors are also expected to provide firm timelines with three monthly milestone plan. Preference will be given to those who offer narrow timelines leading to early completion of BFS and project execution phase. 5

41 Environment and Social Studies All environmental standards as enunciated in the Pakistan Environmental Protection Agency (PEPA) Act 1997, relating to environmental protection, environmental impact and social soundness assessment, shall be ensured. The Government of Sindh is also conducting Environmental and Social Studies, Land Use Plan including Resettlement Framework for Thar Coalfields. Water Master Plan The policy of the Government to attract foreign investments in Thar Coal Sector for allocation of various Blocks has enhanced the foreign interest in Thar Coalfield resulting increased activities of coal mining and power generation companies, which necessitated the placement of an optimal Water Master Plan. In view of peculiar hydrological and hydro-geological conditions of Thar, the early formulation of Water Master Plan is essential for hydro-related activities, to regulate all project developers and also to facilitate development of Thar Coalfield. Hence, the Coal and Energy Development Department is preparing a comprehensive Water Master Plan for Thar Coal fields including hydro geological, water supply and Wastewater Management Studies. 6

42 Thar Coal Resources at a Glance Block Area Sq. Total Moisture Ash Vol. Sulphur Heating Value Fixed Carbon Km Reserves % % matter % % (As Received) % bn ton Btu/lb I II III-A III-B IV V VI VII VIII IX X XI XII Note: Blocks VII to XII are available for allocation to Project Developers. 7

43 Thar Coal and Energy Board In order to fast track the development of coal, especially the largest coal resources of Thar, one stop decision taking body Thar Coal and Energy Board (TCEB) was established under the Chief Executive of the Province with representation from Provincial and Federal Governments. Besides this, the present Government also established Coal and Energy Development Department in April 2009 mainly to focus on the exploration and development of coal resources of the Province. Thar Coal & Energy Board acts as one stop organization on behalf of all Ministries, Departments and agencies of the Government of Pakistan/ Sindh in the matters relating to approval of the Projects for Coal Mining in Thar and for Coalfired Power generation plants or for other uses of Thar Coal. The primary role of the Board is to facilitate and coordinate with domestic, foreign and international institutions for speedy development of Thar Coal. All projects of coal mining, power generation and other uses, in Thar Coalfield including infrastructure projects are being coordinated and monitored directly by the TCEB. All relevant departments are being coordinated for expeditious completion of the infrastructure projects. 8

44 Composition of Thar Coal & Energy Board 1. Chief Minister Sindh Chairman 2. Federal Minister for Water & Power Vice-Chairman 3. Federal Minister for Finance Member 4. Federal Minister for Law and Justice Member 5. Deputy Chairman, Planning Commission Member 6. Provincial Minister (Irrigation ) Member 7. Provincial Minister (Revenue) Member 8. Provincial Minister (Finance) Member 9. Woman MNA from Thar Region Member 10. Federal Secretary, Ministry of Water and Power Member 11. Chief Secretary, Govt. of Sindh Member 12. Secretary, Coal & Energy Development Dept. Member 13. One eminent Person Member 14. Managing Director, TCEB Member/Secretary 9

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46 Infrastructure Available at Thar ROAD NETWORK 70 tonnes load carrying capacity metalled road is available up to Coal field area. COMMUNICATION Telephone & Internet communication through Optic fiber cable is available up to Thar Coalfield area. DRINKING WATER Reverse Osmosis Plants in Thar are available for provision of potable water to the inhabitants of Thar as well as project staff free of cost. RESCUE STATION Rescue Station in coal mining area at Thar coalfield covering an area of 8,200 sq. ft. has been constructed. LIBRARY A Coal library containing documents having relevent information on Coal is situated at office of Sindh Coal Authority. THAR LODGE Thar Lodge at Islamkot with 20-bedded accommodation to facilitate foreign and local investors has been constructed. 11

47 Infrastructure Planned in Progress at Thar TRANSMISSION LINE The NTDC is executing two schemes for power evacuation from Thar:- Phase I: Transmission Line from Thar Coalfield to Matiari Phase II: Transmission Line from Matiari to Rahim Yar Khan AIRPORT The Civil Aviation Authority is executing the work of construction of Thar Airport at a distance of 8-10 kms from Thar Coalfield which is expected to be operational by December PROVISION OF HEAVY DUTY ROAD For improvement of Road Network following 3 Schemes are in pipeline: From Seaport Karachi to Wango More via Thatta, Badin (200 km) From Wango More to Thar Coalfield (135 km) From Hyderabad to Thar Coalfield via MPK, Digri, Noukot, Mithi (155 km) PROVISION OF WATER The GoS is executing schemes of supply of 100 cusecs treated water from Left Bank Outfall Drain to Thar Coalfield. EFFLUENT DISPOSAL The GoS is executing a scheme of constructing 50 cusecs mine water drainage channel from Thar Coalfield which will be completed by Dec, RAILWAY LINK PRACS has prepared feasibility for broad gauge rail link up to Islamkot. 12

48 Thar Coal Investment Opportunities in Pakistan By Ajaz Ali Khan Secretary Coal & Energy Development Department/ MDThar Coal & Energy Board Government of Sindh, Pakistan

49 Key Energy Issues Facing Pakistan Rising energy demand Significant energy shortage Energy Mix out of step with world norms Continuing long term trend of rising oil prices Natural gas demand exceeding supply Very large untapped potential source of power generation fuel in Thar Lignite Deposit

50 A Comparison of Power Generation fuel Mix World World Power Generation fuel Mix Others 2% Pakistan Pakistan Power Generation Fuel Mix Nuclear, 1.8% Coal 41% Nuclear 15% Nuclear Hydel Gas, 32.4% Hydel, 30.3% Hydro 16% Gas Oil Coal Oil 6% Gas 20% others Oil, 35.4% Coal, 0.1%

51 Widening Demand & Supply Gap Projection for Pakistan s Power Sector Current Installed Capacity (MW) 23,412 Projected Demand Gap (MW) Year MW ,217 12, ,359 30, ,566 57, ,695 90,283 Future Energy Demand Supply Gap is Alarming! Source: 3 Pakistan Electric Power Company (PEPCO)

52 Sindh 186 billion tons Punjab 235 million tons Pakistan s Coal Reserves Balochistan 217 million tons KP 90 million tons Azad Kashmir 9 million tons Thar Thar Desert is one of the largest coal reserve estimated at 175 billion ton

53 Thar Coal Reserves Block Reserve bn ton Moisture % Ash % Vol. Matter % Sulphur % Fixed Carbon % I II III-A III-B IV V VI VII VIII IX X XI XII

54 Global Lignite Qualities Country Moisture % Ash % Volatile Matter % Sulphur % Australia Bosnia Germany Greece India Kosovo <1.0 Pakistan (Thar) Poland Serbia Thailand Turkey

55 Comparison of Thar Lignite with other Countries Deposit Stripping Ratio (m³ : t) Heating Value (MJ/kg) Thar 6.6 : (5000 Btu/lb) Kosovo 1 : (3350 Btu/lb) Rhenish Area, Germany 4.9 : (3830 Btu/lb) Hambach, Germany 6.3 : (4510 Btu/lb) Hungary 9 : (3050 Btu/lb) Greece 10: (2159 Btu/lb)

56 Studies Conducted By: Credibility of Reserves United States Geological Survey RWE of Germany M/s Shenhua of China Sindh Engro Coal Mining Company(SECMC) Oracle Coalfields (UK) Geological Survey of Pakistan Sindh Coal Authority All studies confirm presence of huge coal reserves

57 Fiscal Incentives for Coal Development Thar Coalfield is declared as Special Economic Zone, and projects of development of Thar declared as Projects of National Security 20% ($ Based) IRR to firms which achieve Financial Close before Dec 2015 for Mine & Power Plants based on indigenous coal and 20.5% IRR for firms which Financial Close by or before Dec Zero percent customs duties on import of coal mining equipment and machinery including vehicles for site use. Exemption on withholding tax on dividend for initial 30 years. Exemption on withholding tax on procurement of goods and services during project construction and operations. Exemption for 30 years on other levies including special excise duty, federal excise duty, WPPF and WWF.

58 Infrastructure Available at Thar ROAD NETWORK 70 tonnes load carrying capacity road is available up to Coalfield area. COMMUNICATION Telephone & Internet communication through Optic fiber cable is available up to Thar Coalfield area. DRINKING WATER Reverse Osmosis Plants in Thar are available for provision of potable water to the inhabitants of Thar as well as project staff free of cost. THAR LODGE Thar Lodge at Islamkot with 20-bedded accommodation to facilitate foreign and local investors has been constructed. RESCUE STATION Rescue Station in coal mining area at Thar coalfield covering an area of 8,200 sq. ft. has been constructed. LIBRARY A Coal library containing documents having relevant information on Thar Coal, is situated at office of Sindh Coal Authority.

59 TRANSMISSION LINE Infrastructure Planned at Thar NTDC is executing two schemes for power evacuation from Thar:- Phase I: Transmission Line from Thar Coalfield to Matiari Phase II: Transmission Line from Matiari to Rahim Yar Khan AIRPORT Civil Aviation Authority is executing the work of construction of Thar Airport at a distance of 8-10 km from Thar Coalfield which is expected to be completed by Dec PROVISION OF HEAVY DUTY ROAD Govt. of Sindh is executing two schemes for improving roads which will be completed by September, 2014: From Seaport Karachi to Wango More via Thatta, Badin (200 km) From Wango More to Thar Coalfield (135 km) RAILWAY LINK PRACS has prepared feasibility for broad gauge rail link up to Islamkot. EFFLUENT DISPOSAL The GoS is executing a scheme of constructing 50 cusecs mine water drainage channel from Thar Coalfield which will be completed by Dec PROVISION OF WATER: The GoS is executing scheme of supply of 100 cusecs treated water from Left Bank Outfall Drain to Thar Coalfield. These will be completed by Oct 2014

60 Ways of Collaboration by Turkish Institutions & Companies I. Investment in Existing Open-pit Coal Mining/ UCG Projects II. Investment on Developing Thar Coal-based Power Plant III. Acquiring New/ Independent Blocks at Thar Coalfield IV. Investment in Building & Operating Railway Link to Thar Coalfield V. Collaboration by Universities/ Training Institutes to upgrade Polytechnic Institute at Mithi, Thar District.

61 Investment in Existing Open-pit Coal Mining/ UCG Projects Thar Coal Blocks Block-I Global Mining Company of China Open cast Mining of 10 mtpa 900 MW Coal supply to local thermal plants and cement industry after briquetting Block-II Sindh Engro Coal Mining Company (JV: 40% GoS; 60% Engro) Open cast mine of 6.5 mtpa & 1200MW Block-V UCG Project Under Ground Coal Gasification Project & Power Plant Planned Block-VI Oracle Coalfields, PLC (UK) Open cast mine of 5 mtpa Status/ Timelines Bankable Feasibility completed March, 2012 Coal Production planned to start by 2016 Power Generation by 2016 Bankable Feasibility completed August 2010 Project financing activity continued. Chinese Funding is being solicited Coal off-take agreement with GENCO is being finalized 36 bore holes have been drilled. Test Burn done in Dec and Syn gas being produced. Power Plant of 8-10 MW is being established Detailed Feasibility Completed Start of Mine development to begin in mid 2013 JDA signed with KESC for 300 MW

62 Investment in Developing Thar Coal-based Power Plants Mine Mouth Power Plant at Thar Coalfield For 300 MW, required infrastructure like water (ground water) for Power Plant and Transmission Line are available. For 600 MW or more, required infrastructure like water (surface water) for Power Plant and Transmission Line are being provided. Power Plant at Jamshoro (280 km from Thar Coalfield) or Badin (180 km from Thar Coalfield) For this option required infrastructure like road network for lignite transportation, water for Power Plant and Transmission Line are already available. Study conducted by RWE Germany confirmed the viability of coal (lignite) transportation from Thar to Jamshoro and Badin. Conversion of existing RFO-based Power Plants to Thar Coal RFO-based Power Plants at Jamshoro, Guddo, Muzzafargarh etc are being converted to coal which provides an opportunity to investors

63 Available Blocks at Thar Coalfield for New Independent Projects Block Total Reserves (bn tons) Area (sq. km) Moisture (%) Sulphur (%) Ash (%) Heating Value (Btu/lb) Fixed Carbon % VII VIII IX X XI XII

64 Building and operating Railway link to Thar coalfield Thar lignite can also be transported to other parts of the country particularly to use in the New or existing Thermal Power Plants being converted on coal. To make transportation of lignite more feasible, the Government had conducted Feasibility Study through PRACS for providing rail link to Thar coalfield with existing section of Pakistan Railway track. Laying of new track ( km) and replacing narrow gauge to broad gauge besides building stations, level-crossings & minor bridges will be required The companies may develop the Railway Project from Thar coalfield to existing track on BOO basis or other agreed structure by Pakistan Railway.

65 Collaboration by Turkish Universities/ Training Institutes to Upgrade Existing Polytechnic Institute at Mithi, District Thar It is anticipated that with the development of coal mining, power generation and related projects there would be a great requirement of skilled manpower in the area. The Government of Sindh plans to upgrade the Polytechnic Institute Mithi by affiliating it with some international institute of repute which shall confer its certification to the trainees. The existing building of Institute stands over 36,700 square feet, and is equipped with furniture, fixture and necessary equipment. Up-gradation would include, but not limited to, following:- Identification of Courses in consultation with Mining & Power Companies Developing the Modules for Trainees Identifying improvement in existing facilities of the Institute Training of Master Trainers and Trainees Certification to Master Trainers and Trainees

66 Thanks

67 Thar Block I Mining & Power Project Company Profile Sino-Sindh Resources Ltd (SSRL). SSRL is 100% owned by Global Mining (China) company formed for the purposes of investing in Thar Coalfields by its shareholders. The company has committed 6 million USD already to the project and has a surplus 4 million USD in contingency to fund any other need during development process. Project Introduction 10 Million Tonnes per Annum coal mine and 900 MW Power Plant Feasibility Study has completed The mine will work for 2 different consumption models. Around 5 MTPA coal will be used by the Power Plant of 900 MWs gross capacity. The remaining coal will be sold to Government owned GENCOs for their coal conversion efforts and upcoming IPPs in the country. Viability GoP has declared Thar Coal fields as Special Economic Zone and Thar Coal Projects are exempted for 30 years from all taxes and 20% USD based IRR is allowed for the Projects. Financial Details According to preliminary estimates, the total investment requirement to develop a 10 Million Tonnes per Annum (MTPA) mine is around US$ 1.5 billion and 900 MW Power Plant is around US$ 1.7 bn. Contact Details Mr. Athar Naseem, Director Sino-Sindh Resources (Pvt) Ltd. athar1954@gmail.com

68 Thar Block II Mining & Power Project Company Profile Project Introduction Viability Financial Details Contact Details Sindh Engro Coal Mining Company, a JV between Govt. of Sindh & Engro Group of Pakistan. Engro was founded in 1964 as Joint Venture between Esso and Government of Pakistan to setup a first Urea plant in Pakistan. Engro is one of the largest group in Pakistan, working in the fields of fertilizer, chemical, PVC, foods, commodity trade etc Coal Mining: 6.5 mtpa and Mine Mouth Power Generation: 2 x 600 MW Bankable Feasibility Study for Coal Mining Project (6.5 mtpa coal mine) has been completed by internationally renowned Consultants such as RWE-Germany, SRK-UK, Sinocoal-China in compliance with International Standards. Total Lignite reserve in Thar Block II - 2 B tons ; Exploitable Reserve B tons which can support 5,000 MW for 50 years. Additionally, Thar lignite can also replace imported oil for power generation. GoP has declared Thar Coal fields as Special Economic Zone and Thar Coal Projects are exempted for 30 years from all taxes and 20% USD based IRR is allowed for the Projects. Total Project Cost for Mining and Power Projects is ~ USD 3 Billion & resultant electricity tariff is competitive with imported coal electricity tariff. Mr. Shamsuddin Shaikh, CEO Sindh Engro Coal Mining Company sashaikh@engro.com

69 Thar Block VI Mining & Power Project Company Profile Project Introduction Oracle Coalfields incorporated in England and Wales in July 2006, Oracle listed in the London Stock Exchange on the PLUS Markets, in August The company successfully listed on the Alternative Investment Market (AIM) in the UK, in April Bankable Feasibility Study for Coal Mining Project (5 mtpa coal mine) has been completed by SRK Consulting in compliance with International Standards. JORC mineral resource of 529 million wet tonnes (Mwt) in a 20 km² area of the license and 113 Mt JORC proven coal reserve in Phase I Open-pit coal mine development expected in H with initial production expected H JDA signed with KESC for 300 MW Power Plant Viability Investment Option Contact Details GoP has declared Thar Coalfield as Special Economic Zone and Thar Coal Projects are exempted for 30 years from all taxes and 20% $ based IRR is allowed for the Projects. The investors can work out modalities of establishing 300 MW Power Plant based on coal mined by Oracles. Mr. Shahrukh Khan, CEO Oracle Coalfields s.khan@oraclecoalfields.com

70 Thar Block V UCG Project Company Profile Project Introduction The Planning Commission, Government of Pakistan has approved this R&D Project and engaged Pakistan s renowned scientist Dr. Samar Mubarakmand to develop a local technology and execute the Pilot Project. The Project is for production of Syngas from Thar and establishment of UCG based Power Plant of 100 MW and has following components:- Creation of New Processing facilities (for handling and purification of coal gas produced by underground coal gasification) Creation of New Processing facilities(for production of coal gas by underground coal gasification) 2X50 MW Power Plant (IGCC) Test Burn was ignited on 11th December, 2011 Presently, Power Plant of 8-10 MW is being established. Investment Option Presently, Power Plant of 8-10 MW is being established, at the cost of PKR 1.8 bn. Government of Pakistan has already released PKR 900 for this scheme. Investors may collaborate with UCG Project in establishing Power Plant or Coalto-Liquid plant..

71 Infrastructure for Thar Coalfield