ISLAMABAD, Feb 7: The China National Overseas Engineering Corporation (Covec) on Monday signed an agreement with a local company for the setting up of a $8 million coal washing plant at Lakhra in Sindh.

The company has already signed a memorandum of understandingwith the Sindh government under which the provincial government would facilitate it in establishing the coal washing plant in Lakhra.

The plant would be the first of its kind in the country being established in the private sector under a joint venture arrangement with the Chinese company. The project will involve a capacity inlay of over $8 million.

The plant will have an annual capacity of processing 1.5 million tons of indigenous coal to produce one million tons washed or enriched coal which would be used mainly by the cement industry.

The plant is planned to be extended in phases to achieve a production of two million tons of washed coal. According to company officials, the field contains sufficient reserves which would ensure continuous supply of coal in future.