Last checked at 21 Nov 2013 07:00
21 November 2013
Oracle Coalfields PLC
("Oracle", the "Company" or the "Group")
Oracle signs MOU with Chinese power group SEPCO
Highlights:
· Exclusive MOU with SEPCO Electric Power Construction Corporation for the development of a 600 MW coal-fired power plant at the Block VI, Thar Coalfield, Province of Sindh, Pakistan.
· MOU development plans for an integrated power station to cover its design, construction and operation as well as the financing and investment required.
· Significant level of technical and financial resources to be available to Oracle through two major Chinese EPC groups with international experience. CAMCE will focus on the development of the coal mine on Block VI whilst SEPCO will focus on the development and construction of the power plant.
Oracle Coalfields PLC (AIM:ORCP), the developer of a lignite coal mine and power plant in the south-eastern desert of Sindh Province, Pakistan, is pleased to advise that the Company continues to make significant progress towards delivering the commercial potential of Block VI in the Thar Coalfields. Oracle today signed an exclusive MOU in Beijing with SEPCO Electric Power Construction Corporation, one of China's leading power construction groups. The MOU is for an initial period of six months, during which a technical feasibility study and an environmental impact study will be prepared relating to the development of a coal-fired power plant, including:
· plans to develop a coal-fired power plant of 600 MW of power generation, including its design, construction and operation;
· plans to finance up to 70 percent of the debt for the power plant and provide significant equity funding for majority shareholding in the newly incorporated power company which is to be registered in Pakistan with Oracle taking a minority stake; and
· plans for SEPCO to provide equity funding in Oracle's coal mining subsidiary, Sindh Carbon Energy Limited ("SCEL"), to secure a significant minority shareholding.
Through its subsidiary SCEL, Oracle owns the mining lease for Block VI in Thar Coalfield, Sindh Province, Pakistan for mining lignite coal. Oracle plans to develop a mine and to sell coal to an integrated power station ("IPS") at the mine. Under the terms of the MOU, SEPCO will develop plans for a 600 MW (2 x 300 MW) IPS at the Block VI site that would require approximately 5 million tonnes per annum of lignite coal from Oracle's Block VI. It is intended that a newly incorporated power company shall be registered in Pakistan to build, own and operate the IPS.
SEPCO provides Engineering, Procurement, Construction ("EPC") contracting for power station projects in China and around the world. With total assets in excess of RMB 25 billion (approximately £2.5 billion) and over 19,000 employees, SEPCO is the largest construction corporation of conventional power projects in China.
The MOU with SEPCO represents another step forward for the company following the signing in September of a Joint Development Agreement ("JDA") with CAMCE, a subsidiary of the major Chinese state-owned enterprise China National Machinery Industry Corporation (SINOMACH), for the development of the coal mine.
Shahrukh Khan, CEO of Oracle, said: "Oracle has been successful in securing the participation and support of these impressive partners because we believe we have the makings of a very impressive project. Emerging economies depend on the stable supply of cost effective power to fuel their industrial growth and economic development. Once developed, Oracle's project at the Thar Coalfield in the Sindh Province will be uniquely placed to be a major supplier of power to Pakistan for the next 20 years and beyond".
"Oracle is pleased to be partnering with SEPCO, a major industrial group that shares our belief in the potential for the Thar Coalfield to supply the future power needs of Pakistan. We look forward to working with SEPCO on the development of a sizeable power generation project where they will bring not only their technical construction experience but also provide the project with access to equity and debt funding,"
Liu Chuanming, MD of SEPCO, said: "SEPCO is pleased to partner with Oracle in the development of Block VI Thar Coalfield Project by providing technical construction service, financing and equity participation in the development of the Project. We expect the power supply will benefit industrial power consumers and accelerate the economic growth in Pakistan. We look forward to working with Oracle on the successful development of coal mining and power generation projects in Thar."
About Oracle Coalfields
Oracle Coalfields PLC (AIM:ORCP), is the developer of a lignite coal mine and power plant project located in the south-eastern desert of Sindh Province, Pakistan. Oracle, through its subsidiary Sindh Carbon Energy Limited ("SCEL"), owns the mining lease of Block VI in Thar Coalfield, Sindh Province, Pakistan for mining lignite coal. Oracle is looking to exploit the Thar coal deposit through the construction of an integrated power station ("IPS") at the mine. The Company has a significant JORC Compliant lignite coal resource at its Block VI site that would be able to supply sufficient lignite coal for up to 1,100 MW power generation.
In Sept 2013, Oracle signed a Joint Development Agreement ("JDA") with China CAMC Engineering Co Ltd ("CAMCE") for the development of its coal mine.
In Nov 2013, Oracle signed a binding Memorandum of Understanding with SEPCO Electric Power Construction Corporation ("SEPCO") for the development of a coal-fired power plant project at Oracle's coal project.
About CAMCE
CAMCE is focused on EPC projects around the world. The group 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.
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.
About SEPCO
SEPCO is affiliated to Power Construction Corporation of China, and provides a one-stop solution for the EPC contracting for power station projects, including the survey work, design, equipment completion, building and construction, commissioning and their overall operation.
With total assets in excess of RMB 25 billion and over 19,000 employees, SEPCO is the largest construction corporation of conventional power projects in China.
Since 1952, SEPCO has completed construction of 560 power generation units with a total installed capacity of over 93,000MW, substations with a total transforming capacity of over 45,000MVA, transmission lines with a total length of over 18,000km.
SEPCO has actively implemented the strategy of internationalization since the year 2000. In this time, it has undertaken 32 projects with a total contract amount of approximately US$20 billion in more than ten countries and regions of Asia, Africa and South America. Among them, 23 power projects with a total capacity of 26,867MW are contracted on EPC basis with a total contract value in excess of US$18 billion.
For further information:
Oracle Coalfields PLC
Shahrukh Khan +44 (0) 203 102 4807
Peterhouse Corporate Finance
Charles Goodfellow/Duncan Vasey +44 (0) 207 220 9791
Grant Thornton
Salmaan Khawaja/David Hignell/Jamie Barklem +44 (0) 207 728 3402
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