Oracle Power PLC (LON:ORCP) has highlighted recent talks between the Pakistan authorities and the chair of the China-Pakistan Economic Corridor (CPEC) organisation which, among other things, covered proposals to build a rail line through the Thar desert.
Such a project would significantly unlock value at Oracle’s coal mine projects in the desert.
A development involving a 105 kilometre rail line from Chhor to Islamkot – passing through the Thar desert – would allow the transportation of coal and open up distribution to new customers.
Oracle noted that such a project would boost the company’s existing mine-mouth power plant plans.
"The strategic importance of the Thar Block, in both a domestic and international capacity, is clearly demonstrated through these encouraging bi-lateral conversations,” said Naheed Memon, Oracle chief executive.
“Furthermore, the assistance from CPEC, together with the support that we have received from our partners and investors, as evidenced by the recent consortium agreement signed between Oracle, china coal and the private office of his highness (Sheikh Ahmed bin Saeed Al Maktoum), who is also a shareholder in the company and recently elected to lock-up his shareholding for one year, underpins the positive position that oracle is in to achieve its operational objectives.”
Memon added: "Block VI, situated within the broader Thar desert which houses the sixth-largest lignite resource globally with in excess of 175 billion tonnes, has the potential to be one of Pakistan's most valuable asset if developed to be used for power, gas, liquid and for domestic and regional sale to industry.”
Last week, Oracle shares shot up after it said it has agreed to jointly develop a lignite coal mine and associated power plant in Pakistan with the help of China National Coal Development and Dubai’s Sheikh Ahmed bin Saeed Al Maktoum.
A consortium agreement has been signed by Oracle where China Coal and Sheikh Al Maktoum’s private office will jointly develop the combined lignite coal mine in the Thar desert in the Sindh province of Pakistan and a 1,320 megawatt mine-mouth power plant.