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KARACHI: The Thar Coal and Energy Board (TCEB) has regulated an average $40.62/ton coal tariff for Sino Sindh Resources Pvt Ltd (SSRL) over the thirty year lease of the 7.8mtpa (million ton per annum mines). The mine cost is estimated at $1.0 billion approximately.
SSRL is the developer of a combined lignite mineral resource and mine mouth power plant in Thar.
Shahryar Chishty at SSRL said the determination of coal price by the Thar Coal and Energy Board was an important milestone for the company.
“We have already completed the ground work and the financial close will be achieved by March 2017.”
It may be mentioned here that the regulated coal pricing mechanism which applies to Thar coal isolates the project from the price fluctuations of internationally traded coal, and provides an element of certainty to the equity investor.
To encourage the development of the major coal resource, the Sindh government has put fiscal incentives in place, including a cost-plus arrangement, under which holders of mining leases in the Thar Desert are allowed a coal price and electricity tariff that gives a dollar-based project 20 percent internal rate of return (IRR).
To ensure that the IRR is sustained throughout the thirty year lifetime of the project, the Thar Coal Tariff Determination Rules 2014 allow for further coal price petitions as costs change.
The electricity tariff is adjusted through a similar process, on the basis of the changing coal price and other input costs, to also maintain the allowed internal rate of return.
The coal price as determined by the Thar Coal and Energy Board is lower than the original price petitioned by the company at $48.5/ton.
This is due to the Thar Coal and Energy Board applying lower capital and operating costs than presented in the company's original petition.
Sindh Resources Pvt Ltd holds a 30-year mining lease for Block-1 of Thar Coalfields, which covers approximately 150 square kilometres in south eastern Pakistan.
Sindh Resources Pvt Ltd was awarded the block after an intensive round of International Competitive Bidding in September, 2011.
Block-1 holds lignite coal resources of approximately 3.5 billion tons including 600 million tons of measured, 1.9 billion tons of indicated, and 1.0 billion tons of inferred resources.
Sindh Resources Pvt Ltd has plans to develop the 7.8 million tons per annum
coal mine and integrated 1,200 megawatts mine-mouth power plant supplying electricity to the national electricity grid of Pakistan.
The total project cost is estimated at $2.6 billion for which a bankable feasibility has been completed.
Meanwhile, The National Electric Power Regulatory Authority (Nepra) has started to determine the fresh upfront tariff for Thar coal-based power projects, as the earlier determined tariff is set to expire.
An official said the upfront tariff for Thar coal-based power project was earlier determined on July 9, 2014 for a period of two years, which was expiring on January 19, 2017 and National Electric Power Regulatory Authority had decided not to extend the already determined tariff.
Now, the authority seeks stakeholders’ perspective on the tariff regime, the official added.
National Electric Power Regulatory Authority has not yet decided whether to decide another upfront tariff with the revised benchmarks, keeping in view the
improvements in the latest technology and reduced risks or determine the benchmark tariff for competitive bidding under the Competitive Bidding Tariff (Approval Procedure) Regulations, 2014 for new power projects on Thar coal.
The stakeholders’ feedback is sought whether the cost-plus regime should remain available if the new tariff is determined under either upfront or competitive regime, the official added.
National Electric Power Regulatory Authority is also considering that only such
coal power plants may be allowed, which have low cooling water requirement for
future power generation at Thar.
https://www.thenews.com.pk/print/178915-Board-awards-coal-tariff-to-SSRL-for-78mtpa-mine-in-Thar
SSRL is the developer of a combined lignite mineral resource and mine mouth power plant in Thar.
Shahryar Chishty at SSRL said the determination of coal price by the Thar Coal and Energy Board was an important milestone for the company.
“We have already completed the ground work and the financial close will be achieved by March 2017.”
It may be mentioned here that the regulated coal pricing mechanism which applies to Thar coal isolates the project from the price fluctuations of internationally traded coal, and provides an element of certainty to the equity investor.
To encourage the development of the major coal resource, the Sindh government has put fiscal incentives in place, including a cost-plus arrangement, under which holders of mining leases in the Thar Desert are allowed a coal price and electricity tariff that gives a dollar-based project 20 percent internal rate of return (IRR).
To ensure that the IRR is sustained throughout the thirty year lifetime of the project, the Thar Coal Tariff Determination Rules 2014 allow for further coal price petitions as costs change.
The electricity tariff is adjusted through a similar process, on the basis of the changing coal price and other input costs, to also maintain the allowed internal rate of return.
The coal price as determined by the Thar Coal and Energy Board is lower than the original price petitioned by the company at $48.5/ton.
This is due to the Thar Coal and Energy Board applying lower capital and operating costs than presented in the company's original petition.
Sindh Resources Pvt Ltd holds a 30-year mining lease for Block-1 of Thar Coalfields, which covers approximately 150 square kilometres in south eastern Pakistan.
Sindh Resources Pvt Ltd was awarded the block after an intensive round of International Competitive Bidding in September, 2011.
Block-1 holds lignite coal resources of approximately 3.5 billion tons including 600 million tons of measured, 1.9 billion tons of indicated, and 1.0 billion tons of inferred resources.
Sindh Resources Pvt Ltd has plans to develop the 7.8 million tons per annum
coal mine and integrated 1,200 megawatts mine-mouth power plant supplying electricity to the national electricity grid of Pakistan.
The total project cost is estimated at $2.6 billion for which a bankable feasibility has been completed.
Meanwhile, The National Electric Power Regulatory Authority (Nepra) has started to determine the fresh upfront tariff for Thar coal-based power projects, as the earlier determined tariff is set to expire.
An official said the upfront tariff for Thar coal-based power project was earlier determined on July 9, 2014 for a period of two years, which was expiring on January 19, 2017 and National Electric Power Regulatory Authority had decided not to extend the already determined tariff.
Now, the authority seeks stakeholders’ perspective on the tariff regime, the official added.
National Electric Power Regulatory Authority has not yet decided whether to decide another upfront tariff with the revised benchmarks, keeping in view the
improvements in the latest technology and reduced risks or determine the benchmark tariff for competitive bidding under the Competitive Bidding Tariff (Approval Procedure) Regulations, 2014 for new power projects on Thar coal.
The stakeholders’ feedback is sought whether the cost-plus regime should remain available if the new tariff is determined under either upfront or competitive regime, the official added.
National Electric Power Regulatory Authority is also considering that only such
coal power plants may be allowed, which have low cooling water requirement for
future power generation at Thar.
https://www.thenews.com.pk/print/178915-Board-awards-coal-tariff-to-SSRL-for-78mtpa-mine-in-Thar
