Pakistan-focused Oracle Coalfields is considering moving from PLUS-quoted to AIM after clinching two key agreements.
Pakistan-focused Oracle Coalfields is considering moving from PLUS-quoted to AIM after clinching two key agreements.
Chairman Shahrukh Khan says the company, which hopes to exploit an estimated 1.4 billion tonnes of lignite (‘brown coal’) in Block V1 of the Thar coalfield in Sindh Province, is talking to brokers about an eventual AIM move after agreeing a memorandum of understanding (MOU) about potentially supplying fuel to major Pakistani cement maker Lucky Cement.
This agreement with Lucky, part of the powerful Yunus Brothers group, follows another MOU with Karachi Electric Supply Company, backed by the Middle East Abraj group, paving the way for a joint development agreement to build a power plant at Block V1.
Khan argues the Karachi Electric agreement clears the path for a bankable feasibility study of Thar V1, which will establish the parametres for the project and its funding. He says a pre-feasibility study suggests project costs totalling $200 million (£125 million), but argues costs have fallen since then.
According to Khan, Oracle hopes to keep all the project in its own hands, relying on project finance or even a bond issue and may take a modest equity stake in Karachi Electric. Insisting Pakistan’s security problems are a long way from Sindh, he explains Oracle has set a target of June to complete the bankable feasibility study and hopes to produce as much as three to four million tons a year from 2011.
