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Marsha Dennis
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2 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

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

3 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

4 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

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

5 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:

6 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

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

7 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

8 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

Environment and Social Studies All environmental standards as enunciated in the Pakistan Environmental Protection Agency (PEPA) Act 1997, relating to environmental protection, environmental impact

9 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

10 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

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

11 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

12 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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Infrastructure Available at Thar ROAD NETWORK 70 tonnes load carrying capacity metalled road is

COMMUNICATION Telephone & Internet communication through Optic fiber cable is available up to

DRINKING WATER Reverse Osmosis Plants in Thar are available for provision of potable water to the

RESCUE STATION Rescue Station in coal mining area at Thar coalfield covering an area of 8,200 sq.

14 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

Infrastructure Planned in Progress at Thar TRANSMISSION LINE The NTDC is executing two schemes for power

from Matiari to Rahim Yar Khan AIRPORT The Civil Aviation Authority is executing the work of construction of

2013. PROVISION OF HEAVY DUTY ROAD For improvement of Road Network following 3 Schemes are in pipeline: From

Hyderabad to Thar Coalfield via MPK, Digri, Noukot, Mithi (155 km) PROVISION OF WATER The GoS is executing

EFFLUENT DISPOSAL The GoS is executing a scheme of constructing 50 cusecs mine water drainage channel from

15 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

Thar Coal & Energy Board Government of Sindh

Thar Coal & Energy Board Government of Sindh www.sindhcoal.gos.pk Coal Fields of Pakistan & Thar Thar coalfield is approximately located between Latitudes 24 o 15 N and 25 o 45 N Longitudes 69 o 45 E and