Oracle Coalfields provides details of Lucky MoU

The Board of Oracle Coalfields PLC, the UK developer of a 1.4 billion t coal deposit in southern Pakistan, is pleased to announce that the company has entered into a Memorandum of Understanding (MOU) with Lucky Cement Limited, a major cement manufacturer and exporter based in Pakistan.

LUCKY is currently the largest cement company in Pakistan and the country’s largest exporter to the Middle-East, India, Sri Lanka and Africa. In 2009, LUCKY posted year-on-year revenue and operating profit growth of 55% and 135%, respectively.

Salient features of MOU

The salient features of the MOU are as follows:  

• Oracle’s primary objective is the development of its Block VI project to supply lignite coal to a mine-mouth power plant(s). In addition and in the interim, the Company is also pursuing the potential for early cash flow from the supply of lignite coal to the local cement industry.
• LUCKY has expressed an interest in using the indigenous coal to be mined at Block VI, Tharparkar, after techno-commercial evaluation of the coal, for its cement plants. 
• LUCKY shall subsequently assess the costing for transportation and utilisation of this lignite in its cement kilns with minimum effects on the pyro-process and shall try to reach a commercially viable solution before entering into a Coal Supply Agreement (CSA).
• Oracle and LUCKY have agreed to cooperate on the exchange of relevant information and future planning so that they may reach a workable arrangement for Oracle through its local subsidiary Sindh Carbon Energy Limited (SCEL) to supply coal to LUCKY.
• At an appropriate time mutually agreed by Oracle and LUCKY, the CSA shall be signed between Oracle/SCEL and LUCKY. The CSA will replace this MOU.  The CSA shall be a binding document between Oracle/SCEL and LUCKY.
• The representatives of Oracle and LUCKY shall meet at regular intervals to discuss the progress of the Oracle/SCEL Work Programme and also to set out a time-table for signing the CSA.  This would likely be after the certification by Oracle/SCEL of the quality of coal they would be able to supply after treatment and acceptable to LUCKY at economical terms and conditions.

Shahrukh Khan, Chairman commented:

“Entering a partnership with LUCKY, a major cement manufacturer in Pakistan, further secures our objective of 

becoming a leading supplier of coal in the country….We will be working with LUCKY in the coming months 

to share information on coal quality, the mine development plans and transportation logistics for the purpose

of entering a Coal Supply Agreement (CSA). The CSA will add impetus to the development of our 

coal mine and allows Oracle to supply competitively priced coal to LUCKY while the power plant is being 

developed.

“There is significant demand for coal from cement manufacturers in Pakistan.  Currently, the major 

manufacturers import coal at international prices. As a result, a number of these cement manufacturers are 

keen to switch to domestic coal supplies and are prepared to enter long term supply agreements.”

Read the article online at: https://www.worldcement.com/asia-pacific-rim/29012010/oracle_coalfields/