KARACHI, Aug 4: The Sindh government has decided to cancel leases of five large-scale coal mining and exploration parties out of a total nine in Thar and Badin districts due to their poor performance and violation of terms of agreement.

Sources at the Mines and Minerals Department told Dawn that the mining lease of Fateh Group for 35 sq km area in Lakhra was under cancellation. The group was supposed to extract coal from 47 million tons of proven reserves to set up a 200 MW power plant.

A show-cause notice has been issued to the party due to violation of term and conditions of the lease. The case has been put up before the CM for action.

The mining lease of Associated Group for 80 sq km area in Thar Block No-IV with 257 million tons of proven reserves has been cancelled. The lessee was supposed to mine coal and set up a 500 MW power plant.

A licence granted to M/S Hassan Associates for exploration of coal in 64 sq km area in Tharparkar was under cancellation as the party failed to show any progress. A show-cause notice has already been issued and the case has been put to the chief minister for action.

Licence awarded to Descon Engineering for coal exploration for power generation in 100 sq km area in Thar has been cancelled due to poor performance.

Another licence granted to M/S Descon Minex to explore coal for power generation in 100 sq km area in Badin has been cancelled after completing formalities of the agreement.

Sources said that of the nine mining and exploration leases three had already been cancelled, while two were in the process of cancellation. The cancellation was part of the government’s strategy to exploit the coal reserves for power generation.

They said that the parties after having taken mining leases did not show any progress for the real objective of their concession for setting up coal-based power plants.

The cancellation of leases would pave the way for new investors who have shown their keen interest in coal mining for power generation.

The province has coal reserves enough to fulfill the energy requirement of the entire country. The department has already received bids worth $2.5 billion for a joint venture in coal mining and power generation.

The directorate general of mines granted 112 mining concessions during 2007-08. The revenue earned by the department during 2006-07 was Rs329 million compared to Rs276.5 million received up to March 2008.

The Sindh coal deposits have been estimated at 175.5 billion tons spread over an area of 9,000 sq km.