News11 Aug 2015 14:15
TIDMORCP
RNS Number : 7367V
Oracle Coalfields PLC
11 August 2015
Admission of Coal Price Petition
Released : 11 August 2015
RNS Number : 7367V
Oracle Coalfields PLC
11 August 2015
11 August 2015
Oracle Coalfields PLC
("Oracle" or the "Company")
Admission of Coal Price Petition
Oracle Coalfields PLC (AIM:ORCP), the UK energy developer of a combined lignite mineral resource and mine mouth power plant located in the Thar desert in the south-east of Sindh Province, Pakistan, announces that its coal price petition (the "Petition"), submitted to the Thar Coal and Energy Board ("TCEB"), Government of Sindh, has been examined as per Rule 4(6) of the Thar Coal Tariff Determination Rules, 2014 (the "Rules"), to ascertain its conformity with the provisions of Rule 4 (1), (4), & (5) of the Rules by the Thar Coal Tariff Determination Committee and accordingly, the Petition has been admitted.
The coal pricing regime in Pakistan is a cost-plus arrangement, under which holders of mining leases in the Thar desert are allowed a coal price that gives a US Dollar based internal rate of return of 20%. The petition Oracle submitted is based on the Mine Feasibility Study costs.
The next stage of the process is that TCEB will determine the feasibility stage coal price. On the basis of this determined coal price, the Company will proceed to apply for an initial electricity tariff for the power plant. The coal price will be re-determined in a further petition once the EPC contract price for the mine is finalised. Further coal price petitions will be submitted to TCEB periodically through the lifetime of the
project as costs are updated. The electricity tariff will be similarly adjusted.
Highlights of Oracle's Mine Feasibility Stage Petition: