Thar Coalfield: No Chinese company abandoned any project, more blocks being offered for mining

Karachi: Secretary, Sindh Coal & Energy Development Department has contradicted the reports appearing in a section of press that a Chinese company has pulled out investment from Thar Coalfield.

An article captioned “China Pullout Deals Blow to Pakistan” was published in The Wall Street Journal on 30th September 2011, and carried over by some other newspapers subsequently, which gave an impression as if certain investor company with a project, “pact” or “deal”, worth billions of dollars, in Thar coalfield had “abandoned” or cancelled the project because of any security concerns for its personnel working in Thar Coalfield. The article, parts of which are not based upon actual facts, creates an incorrect impression, an official clarification said.

“In order to allay the concern shown by the general public especially the business community over some of the contents of the article, the Department of Coal and Energy Development feels it to be in the national interest to place the facts before the people and the media. In view of the importance of Thar Coal in the energy security of Pakistan, it is requested that this narration of facts may kindly be published as prominently as the earlier news item.

It is stated that M/s Kingho Group of China never had any project nor had entered into any “pact” or “deal” with any authority for investment in Thar Coalfield, of any size, not to mention of the large sum of USD 19 billion as claimed in the article, nor any of its staff members was ever stationed in Thar Coalfield who could have felt anything lacking in the security provided by the government. Hence there is no question of “abandoning” the “pact” or “deal” which never existed.

The factual position is that in March this year, Thar Coal and Energy Board (TCEB), the one-stop forum, comprising of Federal and Provincial governments, for development and investment facilitation in Thar Coalfield, invited expressions of interest from investors internationally, for allocation of mining concessions by the Coal and Energy Development Department, Government of Sindh. In view of the excellent potential and the size of Thar coalfield being the largest reserve of lignite coal, it was well received and many expressions of interest were received including the one from M/s Kingho Group of China. The group’s representatives also visited Pakistan and presented their proposal to the authorities. The proposal sought extraordinary concessions, several times greater in size than those offered to other competitors, which could not be accepted by the evaluation committee of TCEB. In the interest of transparency and fair play, the group’s representatives were advised to modify their proposal according to the parameters of the offer in the published Information Memorandum, as had been done by the other participants.

“Such condition being unacceptable to the said Group, it did not accept the offer by the evaluation committee. The quoted statement of its representative giving the reason of any security “concern for its personnel”, is not true as they had no staff present in Thar, which otherwise is one of the most peaceful regions of the country with almost zero crime rate. Nor was there any project at all which was being pursued by any of their staff members. Hence the impression which had been created by the news item is definitely not based on actual facts. A mere Expression of Interest, the terms of which could not be worked out, cannot be termed as “abandoning” of an investment “pact” or “deal”. There was no factual basis for using such terms in the article.

Thar Coalfield, with its reserves of 175 billion tons spread over 9000 sq kms, is regularly attracting investors from inside and outside the country. There are several investors from China, Australia, Germany, Turkey, South Korea, and UK, who are frequently visiting Thar Coalfield either working for the ongoing projects, developing their studies and project papers or for the companies which are planning to participate in the future offerings of Thar Blocks. There have always been satisfactory arrangements for their facilitation, logistics and security.

It is the tremendous potential and size, unequalled by any coalfield in the region that no serious player with any plans for a prominent position in coal sector of the region can ignore Thar Coalfield.

The Federal and the Provincial governments are providing all possible resources and are developing various schemes to meet the challenge of completing the infrastructure needs of the area. The attractive incentives package offered by the Federal and Provincial governments for Thar Coal projects, is receiving enthusiastic attention of the investors.

The Department of Coal and Energy Development, Government of Sindh is planning to offer this month, more Blocks for exploration and mining concessions in Thar Coalfield to meet the demand of the investors from various countries, which include some very prominent names in international coal mining and power generation sectors, official handout concluded.

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