Thar Coal & Energy Board Government of Sindh

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1 Thar Coal & Energy Board Government of Sindh

2 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 70 o 45 E in the south eastern part of Sindh Sindh 186 billion tons Punjab 235 million tons Balochistan 217 million tons KPK 90 million tons Azad Kashmir 9 million tons

3 Sindh Coal - Chemistry Field Reserves Bn tons Moisture % Fixed Carbon Volatile Matter % Ash % Sulphur % Calorific Value Btu/lb Rank Lakhra to 7.0 Sonda to to 7, to Lignite A to B Lignite A to B Badin to to to to to to Lignite A to B Thar ,774 Lignite A 3

4 Thar Coal At a Glance Distance from Karachi 395 Km Identified Area 9100 Sq. Km Total Reserves at a depth of Meter 175 Bn Tons Cumulative Coal seam Thickness 24 Meter 12 Blocks developed after detailed drilling 1192 Sq. Km Each Block s estimated Coal reserves 2.0 Bn Ton (approx) Potential of each block (approx) MW for 30 Years 4

mainly due to use by industry & transport sectors Desirable Scenario Should provide reliable and predictable supplies

5 Thar Coal - means to Energy Security for Pakistan Energy issues in Pakistan Rising energy demand Significant energy shortage Energy Mix out of step with world norms Historical trend of high oil prices Natural gas demand exceeding supply mainly due to use by industry & transport sectors Desirable Scenario Should provide reliable and predictable supplies Should be more indigenous and less dependent on foreign supplies Should be cheap and affordable Should provide energy security 5

6 Usc/Kwh Thar Coal the Ultimate solution Bridging power generation gap via Thar For a mine size of 6.5 Mt/a an investment of USD 1 Bil is required, this capacity is sufficient to fuel 1200MW of Power Plants (investment of USD 1.7 Bil) With increasing mine size the power tariff will be lowered as coal price will be lower 25 Levelized Tariff Domestic Gas Thar Coal Imported Coal LNG RFO HSD Source : SECMC Feasibility report 6

Thar Coal Potential Thar Desert contains the world s 7 th

2000 TCF Total Thar Coal Resource More than Saudi Arabia

total gas reserves 1% = 25% Thar Coal Resource Pakistan s

alone would bring in investment of 10 Bn USD PAKISTAN

for over 200 years Source:: GSP data/report Energy

7 Thar Coal Potential Thar Desert contains the world s 7 th largest coal resources: 175 Billion Ton = 50 Billion TOE = 2000 TCF Total Thar Coal Resource More than Saudi Arabia 68 times higher than & Iranian Oil Reserves Pakistan s total gas reserves 1% = 25% Thar Coal Resource Pakistan s Power Generation Capacity in 2013 Development of Block II alone would bring in investment of 10 Bn USD PAKISTAN Total potential of generating 100,000 MW of electricity for over 200 years Source:: GSP data/report Energy equivalent is based on Shenhua report/rwe Location of Thar Coal Field Thar 7

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

9 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) 9

10 Thar Coalfield Blocks & Characteristics Block Area Sq. Km Total Reserves bn ton Moisture % Ash % Vol. Matter % Sulphur % Fixed Carbon % I II III-A III-B IV V VI VII VIII IX X XI XII

11 Thar Coal Blocks Developed 12 Allocated 6 I: Sino Sindh Resources Ltd (Pak-China) SSRL II: Sindh Engro Coal Mining Company SECMC III: Asia Power (UK) AP IV: Harbin Electric HE(China) V: UCG VI: Sindh Carbon Energy Ltd (Oracle, UK)SCEL 11

Thar Coal based Power Projects Block Investment Firm Total coal Potential of Block Bn Tons Power Projects Initiated/Planned MW Expected COD Block-I SSRL (China-Pak) 3.

12 Thar Coal based Power Projects Block Investment Firm Total coal Potential of Block Bn Tons Power Projects Initiated/Planned MW Expected COD Block-I SSRL (China-Pak) X Block-II SECMC Pakistan Phase-I 2X Phase-II 2X Phase-III 4X Block-III Asia Power UK X Block-IV Harbin Electric China X Block-V UCG Project X50 Phase I: 8-10 MW Block-VI Oracle Coalfields (UK) X

13 Status of Mining & Power Projects at Thar Coalfield Block Status/ Timelines Block-I: Sino-Sindh -Global Mining Open-pit Coal Mining of 7.8 MTPA up and 2 x 660 MW Power Plant Estimated Project Cost (Mine): US$ 0.95 bn Estimated Project Cost (Power): US$ 1.9 bn MoU between SSRL & Shanghai Electric Power signed Coal Supply Agreement in place. LoI approved by PPIB Land & Socioeconomic survey completed ESIA has been completed by EMC Feasibility stage coal tariff has been approved by TCEB China Coal Technology and Engineering Group Corp, (CCTEG) has majority stake in mining part of project for 7.8 mta mine at Thar Coalfield Block-I Financial Close is due in Q1 2017, followed by Construction Period of 36 months. COD is expected to be attained by 31 st December 2019 LOI from ICBC & Sinosure at place for mining Application for Upfront Tariff for Power Plant submitted to NEPRA Negotiations underway with ICBC & CDB which are the institutions having shown willingness in providing necessary debt financing. Chinese EPC contractors have provided firm commitment for equity participation Remaining equity has already been committed by project sponsors 13

Status of Mining & Power Projects at Thar Coalfield Block Block-II: SECMC (JV: 51% GoS; 49% Engro+ affiliates) Project: Open-pit Coal Mining of 3.8 MTPA up to 7.

14 Status of Mining & Power Projects at Thar Coalfield Block Block-II: SECMC (JV: 51% GoS; 49% Engro+ affiliates) Project: Open-pit Coal Mining of 3.8 MTPA up to 7.8 MTPA (Phase-I) and 2 x 330 MW Power Plant. Project Cost (Mine): US$ 0.85 bn Project Cost (Power): US$ 1.1 bn Status/ Timelines Land acquired for 8 years of Mining. EPC Contract signed Coal Supply Agreement with Engro Power Thar Ltd. signed. Financial Close is achieved in April, 2016 Contract & Financial Close Stages Coal Tariff Approved by TCEB Rs. 50 bn Agreements for Local Financing signed Mining & Power EIA issued Overburden removal has begun 3 years to reach Coal seam Mine depth achieved 64 m till January, 2017 Dump height achieved 30 m till January, 2017 Over burden removal progress is 22.8 million BCM till January, OB Ramp has been constructed Maintenance workshop construction is in progress Dewatering Activities are carried out, 20 wells are completed out of which 8 have also been tested and accepted Resettlement Action Plan has been approved Working to develop the technical Feasibility Study (FS) for Mine expansion up to 13.3 Mt/a & beyond SECMC is contemplating to expand mine to 19 mtpa by

15 Status of Mining & Power Projects at Thar Coalfield Blocks Status/ Timelines Block-V: UCG Pilot Project Under Ground Coal Gasification Project & Power Plant 38 bore holes drilled Test Burn in Dec Syngas being produced 5 MVA started with 8 Gensets since 28May, MVA with 16 Gensets by April/May, 2016 Block-VI: Oracle Coalfields, PLC (UK) Open-pit Coal Mining of 4 MTPA and 2 x 330 MW Power Plant Project Cost (Mine): US$ bn Project Cost (Power): US$ bn Feasibility Stage Tariff has been approved by TCEB. Aiming for Financial Close in Start of Mine development to begin by JDA Signed with SEPCO China for Mining & Power Plant of 330 MW on mine mouth. Signed an agreement with Yanzhou Coal Mining Company Ltd for participation in mining project. The Company is in final stages of discussions with Sinosure and other equity providers for securing debt. For Land Acquisition the Company has hired the Services of Hagler Baily Pakistan in accordance with the Resettlement Framework Policy of Sindh Government. The ESIA has been approved by SEPA in January,

16 Status of Mining & Power Projects at Thar Coalfield at Feasibility Stage Blocks Status/ Timelines Block-III A&B: Asia Power Group Ltd. Selected through ICB held in Planned Project: Mining 6 mtpa Power 2 x 660 MW mine-mouth power plant Block-IV: Harbin Electric Company China Feasibility Study being carried out by the Company. Selected through ICB held in Planned Project : Mining Power 6.5 mtpa 2 x 660 MW Feasibility Study being carried out by the Company. 16

Institutional Development Creation of Thar Coal and Energy Board - one stop organization - 2008 Thar

17 Institutional Development Creation of Thar Coal and Energy Board - one stop organization Thar Coal and Energy Board Act, 2011 Approval of Fiscal Incentives & Protections Coal Pricing Regulatory Regime 17

Composition & Members of the Board of TCEB Chief Minister Sindh Chairman Federal Minister for Water & Power Vice-Chairman Federal Minister for Finance Member Federal Minister for Law and Justice

18 Composition & Members of the Board of TCEB Chief Minister Sindh Chairman Federal Minister for Water & Power Vice-Chairman Federal Minister for Finance Member Federal Minister for Law and Justice Member Deputy Chairman, Planning Commission Member Federal Secretary, Water and Power Member Chief Secretary, Govt. of Sindh Member One Female MNA from Thar Region Member Three Provincial Ministers Member One Eminent Person Member Secretary Energy Dept. Member Managing Director, TCEB Member/Secretary 18

Fiscal Incentives - Development of Local Coal Coalfield declared as SEZ and Projects of National Security 20% ($ Based) IRR to firms which achieve Financial Close before 30 th June 2017 for Mining

19 Fiscal Incentives - Development of Local Coal Coalfield declared as SEZ and Projects of National Security 20% ($ Based) IRR to firms which achieve Financial Close before 30 th June 2017 for Mining Projects based on indigenous coal Zero duty on import of coal mining equipment and machinery Exemption on withholding tax on dividend for 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 19

Coal Pricing Regulatory Regime Coal Tariff is essential for the development of the entire Thar Coal enterprise, mainly addressing the needs of enabling (a) Financing of the Project, and (b)

20 Coal Pricing Regulatory Regime Coal Tariff is essential for the development of the entire Thar Coal enterprise, mainly addressing the needs of enabling (a) Financing of the Project, and (b) finalizing coal off take arrangements for coal supply. To be effective it must be done in a manner which is legally implementable and commercially sustainable. TCEB has been mandated to determine and control the price of coal extracted from Thar Coalfields, under Section 5(m) of the TCEB Act

Update on Transmission Line Thar to Matiari The scheme is to provide 500 KV quad bundle circuit transmission line from Thar to Matirai (250 kms) Status: Lot-I: (110 Km of T/Line) Work Awarded

21 Update on Transmission Line Thar to Matiari The scheme is to provide 500 KV quad bundle circuit transmission line from Thar to Matirai (250 kms) Status: Lot-I: (110 Km of T/Line) Work Awarded Towers Foundations 11 out of 320 completed Date of Completion September, 2017 Status: Lot-II: (140 Km of T/Line) Work Awarded Towers Foundations 37.5 out of 369 completed Date of Completion December, 2017

22 THANK YOU 22

17 Nov, Dr. Safdar Sohail, Economic Minister, Pakistan Mission to EU on behalf of Mr. Shamsuddin A. Shaikh CEO Sindh Engro Coal Mining Company

17 Nov, Dr. Safdar Sohail, Economic Minister, Pakistan Mission to EU on behalf of Mr. Shamsuddin A. Shaikh CEO Sindh Engro Coal Mining Company 17 Nov, 2015 Dr. Safdar Sohail, Economic Minister, Pakistan Mission to EU on behalf of Mr. Shamsuddin A. Shaikh CEO Sindh Engro Coal Mining Company Pakistan Growing Energy Needs With growing population