RE: Orcp25 May 2023 08:39
i think the problem here is due to the management and the direction that orcp have been moving under this management over the past few years. since the current ceo took over the company has shown a clear shift towards green projects and gold. unfortunately, the coal-to-power project couldn't be more of a fossil-fuel prospect and is at the total opposite end of the spectrum to renewable energy projects such as green hydrogen.
on top of that the coal power generation had been pushed into the background by the apparent lack of interest by the govt and chinese. in the recent rns it states that :
"the thar project has achieved significant milestones since its inception. it was included in the china ****stan economic corridor ("cpec") in 2014 and elevated to priority project status in the cpec in 2017. the thar project continues to be in the list of cpec projects and its progress was discussed in its last joint cooperation committee (jcc) meeting held in 2020."
unfortunately these "milestones" are long in the past as can be seen by their dates and although in the background there has been little or no progress on the coal-to-power for the last few years. the last talk of any commercialisation of the coal asset was the coal gasification to fertiliser project, but that hasn't even been mentioned for several years either. as yet, we do not know whether the coal-to-fertiliser project is also going to suddenly resurface, or even if this fits in with the green direction of the current management.
what is certain is that the green hydrogen project doesn't use the coal asset at all with the hydrogen due to be produced via large-scale wind and solar projects, which along with the gold is clearly the direction that naheed wishes to take the company.
but now, rather unexpectedly, coal power generation is suddenly back in the picture as it appears that even without any influence from the chinese, both the energy department of the government of sindh and k-electric limited ("ke"), the largest privately owned vertically integrated power utility in ****stan, have suddenly out of the blue announced that they are more than happy to commit to a long-term project to revert back to fossil-fuels for the future production of electricity using coal from thar. however, this is not where the current orcp management are sitting, hence the lack of interest in the announcement and the falling share price.
however, if the current management has decided that are not going to sanction any fossil-fuel projects, whatever the potential gain, then maybe orcp should look at getting some value from this coal deposit by say selling the whole asset. i am sure the chinese would be only too keen to buy more coal, and they can even go ahead with the power project if that is really what the country wants.
as to the value of the coal asset - it must be many, many multiples of the current m/cap of less than £4m.
atb
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