Last checked at 24 Sep 2013 07:00
24 September 2013
Oracle Coalfields PLC
("Oracle", the "Company" or the "Group")
Oracle Signs Joint Development Agreement for Funding and Development of
Coal Mine and Power Plant
Oracle Coalfields PLC (AIM:ORCP), the developer of a lignite mineral property located in the south-eastern desert of Sindh Province, Pakistan, today announces that it has signed a Joint Development Agreement (JDA) with China CAMC Engineering Co Ltd (CAMCE) for the development of its coal mine and power plant project.
CAMCE is a subsidiary of China National Machinery Industry Corporation (SINOMACH), which is a major Chinese state-owned enterprise.
The JDA, which will remain in place for a period of two years from today's date, includes a package of financial and construction measures; highlights include:
· CAMCE will assist Oracle in seeking the debt financing which is likely to come from Chinese banks for the construction of the mine and power plant and the capital expenditure shall be underwritten by SINOSURE, the Chinese export and credit insurance corporation.
· Debt will be used to finance up to two thirds of construction costs.
· Subject to a competitive price being agreed, CAMCE and Oracle will sign an Engineering, Procurement and Construction (EPC) contract for the coal and power plant project under which it is expected:
o Mine and power plant development will commence in the second half of 2014.
o Production at the open pit mining operation will start in 2015.
o The power plant will have a production capacity of 300 Mega Watt.
Adrian Loader, Chairman of Oracle, said, "This is an important step forward for Oracle and its shareholders and brings us to within two years of our coal mine being in operation.
"The Board of Oracle is very grateful to CAMCE for their involvement in our project and for their assistance in seeking the debt funding."
Shahrukh Khan, CEO of Oracle, said. "With CAMCE we are in strategic alliance with a first class group with strong engineering and project management credentials. Their international relationships will bring significant benefits as we move this project forward, not least in the area of additional funding.
"Initially we will be producing 2.4 million tonnes of coal per year which will supply a 300 Mega Watt power station. Eventually we hope that this will grow to production of five to six million tonnes of coal per year for a 1,100 Mega Watt plant."
The JDA was signed today at a ceremony in Beijing which was attended by officials from the Government of Pakistan, senior executives from CAMCE, Chinese financial institutions and the Board and Management of Oracle.
About CAMCE
CAMCE is an incorporated company registered with the Ministry of Commerce of the People's Republic of China. The company listed on the Shenzen Stock Exchange in 2006. CAMCE is focused on EPC projects and has completed projects across Asia, Africa, South America and the Caribbean.
CAMCE has extensive experience in international project management. Its fields of involvement include transportation, municipal engineering, irrigation works, power, construction materials, food, processing, textiles, telecommunication, petrochemical industry, agricultural machinery and construction equipment.
CAMCE is a subsidiary of SINOMACH which is a large state-owned enterprise approved by the State Council and administered by the State-owned Assets Supervision and Administration Commission. SINOMACH is a Global 500 enterprise.For further information:
Oracle Coalfields PLC +44 (0) 203 102 4807
Shahrukh Khan
Blythe Weigh Communications +44 (0) 207 138 3204
Tim Blythe, Halimah Hussain
Peterhouse Corporate Finance +44 (0)20 7220 9791
Charles Goodfellow
Grant Thornton UK LLP +44 (0) 207 373 5100
Salmaan Khawaja, David Hignell, Jamie Barklem
Notes to editors:
Thar Coalfield project history:
· 2007 - Oracle received the exploration licence for Block VI.
· 2008 - Dargo Associates Limited prepared a Competent Persons report on Block VI.
· 2010 - SRK Consulting Limited was engaged to carry out a Technical Feasibility Study for the development of a mine to supply a power plant, and to prepare a JORC compliant Mineral Resource Estimate. Oracle commission RPS Aquaterra to produce a Hydrogeological Report and Wardell Armstrong International and Hagler Bailly Pvt. to prepare an Environmental and Social Impact Study.
· February 2012 - Oracle engaged Mott MacDonald to carry out a Pre-Feasibility study for power generation to examine the range of power plants that could be constructed at the mine site along with the volumes of lignite required for plants of various capacities from 300MW to 900MW. The Mott MacDonald study confirmed the suitability of the lignites for both pulverised fuel and circulating fluidised bed power plants. Technical Feasibility Study completed and announced by SRK Consulting.
· April 2012 - Mining lease granted to Oracle
· June 2012 - Oracle signs a Joint Development Agreement with the Karachi Electric Supply Company to develop a mine-mouth 300MW power plant, with the provision to increase its capacity to 1100MW. .
· July 2012 - Oracle commission Dargo Associates Limited to prepare Implementation plan to demonstrate the capital and operating costs for the development of a 2.4 million wet tonnes lignite mine to support a 300MW power plant initially.
· September 2012 - Oracle announces details of Implementation Plan, including a significant reduction of investment required to bring the mine into full production. The ESIA Baseline Studies are complete with impact study to be finalised.
· November 2012 - Oracle signs MOU with Thatta Cement for coal supply
ENDS