KARACHI, July 7: The Chinese Mechanical Engineering Company, CMC, wants to set up a 375MW coal-fired power plant at Sonda in Thatta district. The company has started the process of getting support from relevant departments to launch the project.

It has submitted a feasibility study to the Sindh ministry of minerals declaring the results of the exploration as ‘positive’. The study confirms the availability of sufficient deposits of coal in the area and their suitability for power generation.

A CMC delegation, headed by its Vice President Shen Yen Rigaua, called on director-general of minerals Sohail Akbar Shah this week to discuss the modalities of the power plant.

The delegation also submitted an application for grant of a mining lease to extract coal to be used in power generation.

The two sides will sign a power generation agreement under which the Sindh government will get royalty of Rs60 per ton of the coal mined apart from the dead rent of the land to be provided to the company for setting up power plant and its allied facilities. In addition, there would be a fee for the mining lease, which will be for 30 years.

Under the agreement, the company will be restricted to sell coal in the domestic market and the extracted quantity would be exclusively used for power generation.

The CMC will also hold discussions with the federal ministries of petroleum and electricity, IPPB and Nepra to decide the tariff at which the power produced in Sonda power plant will be provided to Wapda.

Sources in the mineral department hope that if all issues are settled, the power plant will be functional in three years.

Under the agreement, the Chinese firm will also be required to employ local people at the plant and train them to shoulder operation responsibilities after the mining lease expires and the company decides to wind up.

The total coal deposits in Sindh are estimated at 184 billion tons with the biggest reserves of 175.5 billion tons at Thar, 7.1 billion tons at Thatta; 1.3 billion tons at Lakhra; 0.16 billion tons at Jhimpeer and 0.16 billion tons at Badin.

The mineral department has also given mining lease of various blocks in Thar to private companies. These include Hasan Associates, and Associated Group to extract coal for setting up power plants in the area.

A Chinese company has also been given a lease for coal mining for the same purpose.

In Badin district mining lease has been granted to Al Abbas Group and Roadways Company.

A Chinese firm Sinochem Hebei Corporation has been given mining lease to extract a precious mineral ‘celestite’ found in mountain range near Nooriabad on Superhighway. The mineral is used in manufacturing of TV screen, X-ray films and in defence missile system.

Sohail Akbar told Dawn that the Chinese firm was interested in extracting the mineral for export purposes but the department persuaded it to process the mineral at the site before export.

In Lakhra, mining of coal is in progress since 1960 where Lakhra Coal Development Corporation (LCDC) and Pakistan Mineral Development Corporation have been assisting in mining activities. A Wapda power plant based on coal is generating electricity in the area.

Meanwhile, Fateh Group of Hyderabad has been given lease for a block in Lakhra to set up a power plant.

The director-general of minerals said the Sindh government has provided full security to the Chinese engineers working in the coal-mines in Thatta, Nooriabad and Thar area.