GOVERNMENT OF SINDH

MINES & MINERAL DEVELOPMENT

DEPARTMENT

PC-II

PREPARATION / UPDATING
OF
BANKABLE FEASIBILITY STUDIES
AT
THAR
COALFIELD / SONDA-JHERRUK
COALFIELD

ESTIMATED COST
Rs.600.00 MILLION

SINDH COAL AUTHORITY

(GOVRNMENT OF SINDH)
 PC-II

1. Name of Project Preparation / Updating of Bankable Feasibility

Studies at Thar Coalfield / Sonda-Jherruk
Coalfield
2. Authorities Responsible:
i) Sponsoring Mines & Mineral Development Department,
Government of Sindh

ii) Executing Sindh Coal Authority will coordinate

implementation of studies through
international firms for updating of existing
Feasibility Study at Block-I and preparation of
new feasibility studies at Block-II Thar
Coalfield and Sonda-Jherruk coalfield.
3. Location of the Project ¾ Updating of existing Bankable Feasibility Study
Report conducted by M/s. RWE Power
International, Germany at Block-I Thar
coalfield

¾ Compilation / Updating of Bankable Feasibility

Study Report at Block-II Thar coalfield (study
conducted by M/s. Shenhua Group
Corporation, China through M/s. Sinocoal
Engineering, but report not submitted)

¾ Preparation of Bankable Feasibility Study

Report at Sonda-Jherruk coalfield, District
Thatta

¾ Rs.100.00 million (updating of FS Thar Block-I)

¾ Rs.100.00 million (preparation of new BFS at
Block-II Thar)
¾ Rs.400.00 million (preparation of BFS at
4. Capital Cost of the Project Sonda Coalfield)
Rs.600.00 Million (Annexure-I)
Foreign Exchange: US $ 7.100 million
Local Currency: Rs.50.00 million
5. Proposed date of After approval of PC-II, the studies would
commencement and
require a period of 24 months for their
completion.
completion.

1
6. Agencies other than The studies would be carried out in
sponsoring authority in the
consultation with concerned federal
project.
government agencies / Geological Survey of
Pakistan and by engaging M/s. RWE Power
International of Germany, who previously
conducted the coal mining feasibility study at
Thar coalfield (Block-I) in years 2002-2004
and in Block-II through M/s. Sinocoal of China
(technical consultants of M/s. Shenhua
Group). The Bankable Feasibility Study of
Sonda Coalfield would be conducted through
ICB.
7. Objective of the study The main objectives of studies are:
(i) Updating of existing Bankable Feasibility
Study of Block-I at Thar Coalfield conducted
by RWE Power International, Germany.
(ii) Compilation / updating of Bankable Feasibility
Study with the help of data generated during
geological investigations conducted by
Shenhua Group Corporation of China in
Block-II of Thar coalfield, the feasibility study
report thereof was not submitted by them.
(iii) Preparation of Bankable Feasibility Study of
Sonda-Jherruck Coalfield, District Thatta
The studies would evaluate the coal resources
of the identified areas and determine
parameters for extraction of around 6.00
million tones coal, annual production capacity
or as suggested by the consultants for
meeting fuel requirements of 1000 MW mine
mouth power station. Terms of Reference
(TOR) for the studies would be prepared by
the consultant.

2
8. Scope of the study
(i) Thar Coalfield, ¾ To update/review the existing Bankable
District Tharparkar
Feasibility Study of Block-I at Thar
Coalfield conducted by M/s. RWE Power
International of Germany over an area of
40 sq. km.
¾ To compile data of geological
investigations conducted by M/s. Shenhua
Group Corporation of China in Block-II at
Thar coalfield with a view to sort out the
shortfalls and to prepare a Bankable
Feasibility Study Report of international
standards.
A Bankable Feasibility Study of Block-I at Thar
Coalfield was sponsored jointly by Sindh Coal
Authority and Geological Survey of Pakistan
for evaluation of suitability of Thar coal as a
fuel for power generation, its mine-ability, per
ton pit head extraction cost and selling price of
coal delivered to the users/power station, the
scheme “Bankable Feasibility Study of Thar
Coal Mining” was jointly sponsored by the
Ministry of Petroleum & Natural Resources,
Government of Pakistan and Mines & Mineral
Development Department, Sindh and funded
in the ratio of 80:20, respectively. The study
was a major step towards accelerated
development of Thar coal deposit, which
provided data required by private sector for
investment decisions.

3
 The study was awarded through ICB to M/s.
RWE Power International of Germany, a well
reputed mining and power generation
company in the World.
Findings of this study estimated 1003.320
million tones of lignite reserves delineated in
an area of 40 sq. km. which are sufficient to
meet the requirements of 1000 MW
minemouth power generation plant for life of
the project.
Sindh Coal Authority intends to review and
update the Bankable feasibility Study of Thar
Coalfield conducted by M/s. RWE Power
International so as to overcome shortfall in the
report.
(ii) Compilation of data / During visit of the Chinese Premier in May,
geological
2001 to Pakistan, the Chief Executive of
investigations
conducted by Shenhua Pakistan discussed the Thar coal
Group Corporation of
development for power generation and
China in Block-II of Thar
coalfield requested him for Chinese assistance.
As a follow-up a delegation from China
headed by Ye Qing, Chairman of Shenhu
Group Corporation – a state-owned
organization of China – visited Pakistan from
June 21-26, 2001 and deliberated on
development of Thar coal project. During this
visit, a consensus statement was signed.
In order to assess, evaluate and prepare a
Work Plan for Thar Coal Project, a delegation
comprising technical personnel of Shenhua
Group visited Pakistan in November, 2001

4
and all the required data was provided to
them, so as to initiate the process. After
evaluation of existing available data, Shenhua
Group of China considered essential to
conduct geological and hydro-geological
investigations, so as to assess and evaluate
further Thar coalfield specifically for mining
and power generation. As such, part of
existing Thar Coal Block-II and adjacent area
was allotted to them for carrying out Detailed
Coal Geological Investigations (DCGI) and
Hydro-Geological Investigations (HGI) over 56
sq. km. and 600 sq. km., respectively.
Shenhua submitted Comprehensive
Statement (defacto feasibility study report) on
Thar Project in August 2004. The Final
Feasibility Study Report was not provided with
the concerns that Pakistan Government could
not declare the power tariff for Thar Coal
Project.
The investment suggested by Shenhua was
US $ 480 million with 3.5 million tonnes
annual capacity coal mine and also given US
cents 6.2 to 5.75 levelized tariff for 25 years
for establishment of 2 x 300 MW extendable
to 3000 MW power plant. The Shenhua Group
also clearly stated in their comprehensive
statement that the Thar coal project can only
be economically achieved, if Government of
Pakistan guarantees the appropriate tariff.

5
 Sindh Coal Authority intends to review the
data of geological investigations conducted by
Shenhua Group Corporation of China in
Block-II at Thar coalfield (as the report was
not submitted), so as to prepare the Bankable
Feasibility Study of Thar Coal of international
standards.
(iii) Sonda-Jherruk The study envisages the following activities in
Coalfield District
the coal mine areas of Sonda-Jherruk, which
Thatta
would be conducted through International
reputed firms by floating ICB tender:-
Phase-I: Review and Planning Stage: It will
include compilation and review of existing
data and identification of the gaps; designing
of the study and exploration program, etc.
Phase-II: Exploration Stage: This will include
mobilization and procurement of logistics,
permits, consents, etc., detailed exploration,
analysis and testing, etc., of the data compiled
and generated for the study, which will include
geo-technical and hydro-geological data and
their analysis, environmental, soil assessment
and social aspects of the study shall also be
evaluated and findings included in the Report;
Deposit Modeling, Hydro-geological Modeling
and Geological Report to form part of Site
Assessment Report.
Phase-III: Mine Design & Project
Feasibility: It will mainly include identification
of various alternate mine designs in order to
achieve target production schedule to supply

6
 of coal to the potential users at cheapest
possible price, definition of fundamental
design parameters, evaluation of potential
mine design and alternate equipment
configuration in order to achieve the target
production schedule, Environmental Impact
Assessment (EIA) and Environmental
Management Plan (EMP) for the proposed
mining option.
Identification of manpower required for coal
mining and coal-based projects and level of
their skill, required academic qualifications,
etc., and the proposal for procuring / training
of the required manpower well in advance.
The objective of the study is to prepare
Bankable Feasibility Study Report of Sonda-
Jherruk Coal Mining, for extraction of 6.00
million tones annual extraction capacity coal
mine. But, to facilitate further study of power
station by the power developers, may be of
1000 MW capacity, the study requires data on
basic parameters for feasibility of a power
station.
The study report will contain analysis of
various mining options based on various
technologies, equipment, etc., and
recommend the based possible mining option
for development of mine of around 6.00 million
tones annual production capacity.
9. Administrative control The project will be overall monitored by a
Steering Committee to be constituted by the

7
 Department with the approval of Sindh Coal
Authority Board and supervised by a Project
Director at site to be nominated by the
Chairman, Sindh Coal Authority Board.
10. General Description The province of Sindh is blessed with huge
coal lignite deposits, which constitutes around
99% of total coal deposits of the country. The
coalfield-wise deposits are as under:
Billion tones
• Lakhra 1.328
• Jhimpir-Metting 0.161
• Badin 0.016
• Sonda-Jherruk 7.112
• Thar 175.506
• Total 184.123

Sonda-Jherruk Coalfield: The Geological Survey of Pakistan discovered

Sonda-Jherruk coalfield in District Thatta in
1981, which has been a centre of exploration
activities. Exploration in this area has been
based on the extensive coal basin in the east
Indus indicates that in the northern region in
Lakhra, coal is formed in back barrier environ-
ment, whereas in the southern region in
Sonda and Sujawal, the coal beds were
deposited in lower deltaic plain.
The Sonda-Jherruk coalfield covers an area of
over 1822 sq km. (Sonda Block-1400 sq. km)
and (Jherruk Block-422 sq. km.). The drilling
data indicate that the coal is thickest near
Jherruck, where the cumulative thickness of
coal is 6.2 meters. Coal largely occurs within
thick lenses of siltstone and mudstone.

8
The Sindh Coal Authority has investigated a
block comprising 90 sq. km. through a private
consultant firm in 2006-07, results which
indicates total resources of 194.39 million
tones in the blocks. The cumulative coal seam
thickness varies from 0.46 to 6.04 meters and
thickest coal seam encountered 1.67 meters.
The coal encountered at depth of 65.16 to
186.23 meters.
The coal seams in the upper zone and above
the Sonda seam in the geological column are
termed as Dhaduri seams, whereas the name
of Jherruck seams is assigned to the coal
seams falling in the lower coal zone below the
Sonda seam. Three other seams encountered
and stratigraphically just above the Sonda
coal seams, in the middle coal zone are
named as Inayatabad seams.
The coal resources of Sonda-Jherruk coalfield
are about 7.112 billion tons.
The weighted average chemical analysis of
Sona-Jherruk coal, on as received basis, is as
follows:
• Moisture (AR) 31.23-34.72%
• Volatile Matter 27.9%
• Fixed Carbon 25.2%
• Ash (AR) 7.69-14.7%
• Sulphur (AR) 1.38-2.82%
• Heating Value (AR) 6,780 - 11,029
(Btu./Lb.)

Sonda lignite is suitable for electric power

generation.

9
 Sonda-Jherruk coalfield area is accessible by
metalled road from Karachi and Hyderabad
through National Highway at ant approximate
distance of 125 km and 80 km respectively.
The railway link is up to Jangshahi and
Jhimpir, which are about 25 km to 35 km from
the coalfield area. Indus River flow near the
coalfield.
Thar coalfield: Thar coalfield is spread over an area of about
9,100 sq. km. The USGS & GSP investigated
4130 sq. km. and Sindh Coal Authority
investigated 130 sq. km. through M/s. China
Northeast Coalfield Geological Survey
Bureau. Besides, exploration for development
of additional two blocks is also under
progress.
Maximum cumulative thickness of coal
bed/seam is 36 meters. Whereas, the thickest
coal seam is 22.18 meters between 150 and
203 meters depth. Thickness of overburden
varies from 114 to around 200 meters.
Quality of Thar coal is Lignite “A” to “B”.
According to analysis, the weighted average
chemical analysis of Thar coal, on as received
basis, is as follows:
• Moisture 46.77%
• Ash 6.24%
• Volatile Matter 23.24%
• Fixed Carbon 16.66%
• Sulphur 1.16%
• Heating Value 5,774 BTU/Lb.

10
The measured reserves of lignite coal in six
blocks of Thar coalfield are over 12000 million
tones, whereas 200 million tones are sufficient
to generate 1000 MW electricity for 40 years.
Only 50 sq. km. area will be required.
Thar lignite is recognized as a major energy
resource in Pakistan with a high potential to
support and replace energy production from
indigenous resources substantially.
Bankable Feasibility Study of Thar Coal
Mining:-
In order to evaluate suitability of Thar coal as
a fuel for power generation, its mine-ability,
per ton pit head extraction cost and selling
price of coal delivered to the users/power
station, the scheme “Bankable Feasibility
Study of Thar Coal Mining” was jointly
sponsored by the Ministry of Petroleum &
Natural Resources, Government of Pakistan
and Mines & Mineral Development
Department, Sindh and funded in the ratio of
80:20, respectively. The study was a major
step towards accelerated development of Thar
coal deposit, which would provide data
required by private sector for investment
decisions.
The study was awarded through ICB to M/s.
RWE Power International of Germany, a well
reputed mining and power generation
company in the World.
Findings of this study estimated 1003.320

11
million tones of lignite reserves delineated in
an area of 40 sq. km. which are sufficient to
meet the requirements of 1000 MW
minemouth power generation plant for life of
the project.
Government of Pakistan and Government of
Sindh have on priority basis developed all
necessary infrastructures like electricity, road,
telephone and water supply lines upto
coalfield.
Geological Investigations by Shenhua
Group, China
M/s Shenhua Group of China sponsored a
project for establishment of integrated coal
mining and power generation project and
conducted detailed coal geological and
hydrological investigations in Block-II and
submitted comprehensive statement. The
investigations aimed at assessment of coal
and water resources to meet requirements of
coalfired power plant of 2 x 300 MW
minemouth and development of coal mine.
Basic data in shape of Comprehensive
Statement has been submitted in August,
2004 and detailed feasibility study is awaited.
Thar coal being the biggest deposit in the
country is receiving priority attention to meet
fuel requirements of the country. The required
infrastructure including metalled roads, water
supply line, electricity, optical fiber line
(telephone) is available upto coalfield.

12
Besides, a Broad-gauge Railway Line from
Varvai-Islamkot-Mithi-Naukot-Mirpurkhas-
Hyderabad a less expensive and
commercially feasible option, assessment of
water resources of Thar coalfield with
reference to long-term water requirements of
Thar coal development program are also
receiving priority attention to support its
smooth exploitation.
To facilitate foreign investors Thar Lodge at
Islamkot is under construction and survey for
airstrip at village Sive-jo-Tar and Bhope-jo-Tar
stand completed.
The feasibility study would evaluate suitability
of Sonda-Jherruk coal as a fuel for power
generation, its mine-ability, per tone pit head
extraction cost and selling price of coal
delivered to the users/power station. Besides,
update the existing Thar Coal Investigations
conducted by Shenhua Group Corporation of
China, so as to prepare a Bankable Feasibility
Study Report of International Standards on
Thar Coal Project.
The study would be coordinated by the Sindh
Coal Authority as secretariat of the Steering
Committee, besides, Sindh Coal Authority
would provide assistance in geological
investigations as per exploration and
investigation program, designed by the
consultant(s), engaged through ICB for
carrying out the feasibility study as per
Government of Pakistan policy for such
studies.

13
 On completion of the study, further activities
for bankable feasibility study for power plant,
including Grid Station, Environmental Impact
Assessment of Coal Mining and Coalfired
Power Generation, market analysis for sale of
coal-fired power generation and road show to
attract potential investors either under joint
venture with foreign agencies shall be created
for bringing big investment for development in
Thar coalfield area.
Justification Sindh has been endowed with a natural gift of
coal, which is 99% of the country’s total coal
deposits. Being less expensive, a reliable,
sustainable source for power generation, need
to be developed and given priority.
Share of coal globally in power generation and
as a primary fuel, is 38% and 26%
respectively. For considering indigenous coal
based projects, it is a pre-requisite to
determine suitability of use of coal as a raw
material/fuel and evaluate economic feasibility
and technical viability, etc., of coal mining per
tone pit head coal extraction cost and selling
price of coal, else, this deposit, a national
treasure, will remain buried for ever.
Benefits of an indigenous fuel are countless.
The major benefits of development of coal as
a fuel, would be:
• Sustainable, reliable and less expensive
indigenous fuel (coal)
• Saving in foreign exchange otherwise

14
 required for import of oil as a fuel including
for power generation
• Employment generation effect and
massive economic activity
• Step towards a self-reliant economy
• Investment in coal mining will generate
employment and economic activity in the
country; whereas, money spent on
imported fuel would generate economic
activity in the fuel producing / exporting
countries.
• Congestion caused at the ports in handling
of import of oil and impact of transportation
of oil from ports to project sites also, would
be avoided by developing coal as a fuel
including for power generation.
• Contain shifting of people from rural to
urban centers in search of jobs and
business opportunities.
11. Physical and Financial Annexure-II
planning of the project.

12. Requirement of material and Annexure-III

Personnel

a) Details of personnel
required (gazetted and non-
gazetted)

b) Break of the project Annexure-I

15
Prepared by (Muhammad Hassan Brohi)
Deputy Director (Tech.)
Sindh Coal Authority

Verified by (Saqib Bashir Dahar)

Secretary
Sindh Coal Authority

Checked by (Mumtaz Ali Qureshi)

Director General
Sindh Coal Authority

(Muhammad Younus Dagha)

Approved by Secretary
Mines & Mineral Development
Department
Government of Sindh

Karachi
June 17, 2008

16
 Annexure-I

Sindh Coal Authority

(Government of Sindh)

COST ESTIMATES

UPDATING OF BANKABLE FEASIBILITY STUDIES

AT BLOCK-I & II THAR COALFIELD AND PREPARATION OF BANKABLE
FEASIBILITY STUDY AT SONDA-JHERRUK COALFIELD

Study-wise Break-up Total cost

(Rupees in Million)

¾ Updating of existing Bankable Feasibility Study 100,000,000

Report conducted by M/s. RWE Power
International, Germany at Block-I Thar coalfield

¾ Preparation of Bankable Feasibility Study 100,000,000

Report at Block-II Thar coalfield (study
conducted by M/s. Shenhua Group
Corporation, China, but report not submitted)

¾ Preparation of Bankable Feasibility Study 400,000,000

Report at Sonda-Jherruk coalfield, District
Thatta

Total 600,000,000

17
 Sindh Coal Authority
(Government of Sindh)

COST ESTIMATES

UPDATING OF BANKABLE FEASIBILITY STUDIES

AT BLOCK-I & II THAR COALFIELD AND PREPARATION OF BANKABLE
FEASIBILITY STUDY AT SONDA-JHERRUK COALFIELD

Study Particulars / Total cost

Item wise Break-up (Rupees in Million)

A) PHYSICAL AND FINANCIAL PLANNING OF

THE PROJECT 40,000,000
Phase-I: Review and Planning Stage
00
Phase-II: Exploration Stage 180,000,000
00
Phase-III: Mine Design & Project Feasibility 80,000,000
00
B) REPORTING, CO-ORDINATION MEETINGS 30,000,000
00
C) MANPOWER REQUIREMENTS AND
20,000,000
TRAINING ARRANGEMENTS
00
D) MONITORING CELL (MC) IN SCA 10,000,000

E) RECURRING EXPENSES 34,000,000

F) DURABLE GOODS 5,500,000

G) CONTINGENCIES / MISCELLANEOUS 500,000

Total 400,000,000

18
 Annexure-II

UPDATING OF BANKABLE FEASIBILITY STUDIES

AT BLOCK-I & II THAR COALFIELD AND PREPARATION OF BANKABLE
FEASIBILITY STUDY AT SONDA-JHERRUK COALFIELD

S. Activities Man Amount

No. Days (Rs.)

A. PHYSICAL AND FINANCIAL PLANNING OF THE PROJECT

1. PHASE I
1.1 Review and Planning: Data Review / Fact Finding, 10,000,000
Field Investigation, Model of Financing, Hydrology,
Geology, Power Plant, Project Management.

1.2. Design and Specification of Exploration 10,000,000

Programme: Definition of Exploration Programme,
Design of Hydrological Exploration Programme

1.3 Review of Thar Region Infrastructure 10,000,000

1.4 Study Implementation Schedule 1,000,000

1.5 Study Inception Report 1,000,000

1.6 Presentation and Client Approval 8,000,000

1.7 Travel costs, Air Fares, Accommodation, Other Travel 10,000,000

Costs

Total: Data Review & Planning (Phase-I) 50,000,000

19
S. Activities
No.

2. PHASE II
Exploration Study:

2.1 Mobilization and Procurement 5,000,000

2.2 Detailed Exploration Programme:

Mobilization/Demobilization Drilling Equipment 1,000,000

Set up of borehole locations 60 Nos. (16000 1,500,000

meters)

Exploration Supervision, Open hole drilling, Drilling 140,000,000

of HQ size for piezomerters, Coring in HQ size by
wireline, Geological costs, Core Boxes (1500 m),
Cost on facilities, Standing while down hole logging
(h), Downhole geop. logging, Exploration at Site &
Elaboration of Geological Data.

2.3 Final Geological Model, Reporting 5,000,000

2.4 Development of three Test Wells with installed 20,000,000

equipment (implementation as part of 2.2)

2.5 Coal and Ash Analysis: Calorific Value, Ash 8,000,000

Content, Free Water, Sulpher, Ash Elements,
Chloride, Sample Preparation (2000 samples) -
(Activity simultaneous to 2.2)

2.6 Geotechnical Investigations 2,500,000

2.7 Environmental and Soil Base Line Survey 2,000,000

2.8 Site Assessment and Report 10,000,000

2.9 Travel Costs, Air Fares, Accommodation, Other 10,000,000

Travel Costs.

TOTAL: Field Exploration (Phase-II) 200,000,000

20
S. No. Activities Man Amount
Days (Rs.)

3. PHASE III
Mine Design and Feasibility Study:
3.1 Fundamental Design Parametres, Production 12,500,000
Requirements, Lignite Quality, Beneficiation,
Stockpile Management, Slope Design Criteria,
Groundwater Management, Numerical Groundwater
Model, Management of Dump Materials, Social
Elements.

3.2 Identification of alternative Mine Designs and 15,000,000

Equipment Configurations: Conceptual Planning of
Main Mine Equipment, Conceptual Mine Planning,
Main Mine Equipment for Overburden, Main Mine
Equipment for Lignite Mining, Electrical Equipment
and Power Distribution and Control & Communication
Systems.

3.3 Cost Analysis and Selection of Preferred Alternative 5,000,000

3.4 Detailed Mine Planning (Selected Option): Geology, 20,000,000

Hydrology, Geotechnics, Detailed Mine Design and
Production Schedule, Detailed Mechanical Equipment
Planning (Main Mine Equipment, Auxiliary Equipment,
Lignite Handling Plant, Main Service Facility,
Manpower requirement), Detailed Planning Electrical
Equipment Interim Power Supply (Power Supply and
Power Distribution, Electrical Systems for Main
Equipment, Control & Communication System,
Infrastructure and Mine Service Facilities, Dewatering
Power Supply & Pump Design), Infrastructure
Requirements.

3.5 Environmental Impact Assessment Mining, 11,000,000

Dewatering, Land use, Land Restoration Emissions,
Pollution, Waste Water : Reclamation of mined out
Areas, Resettlement.

3.6 Personnel Recruitment and Training Plan Job 4,000,000

Description, Training Program and Schedule.

3.7 Mine Development Schedule Development Schedule, 8,000,000

Procurement Schedule, Identification of Critical Path.

21
3.8 Detailed Financial Analysis 4,200,000

3.9 Draft Feasibility Study Report 3,300,000

3.10 Project Cost Model 15,000,000

3.11 Project Management and Reporting, Travel Costs, Air 2,000,000

Fares, Accommodation, Other Travel Costs.

Total: Mine Design and Feasibility Study 100,000,000

(Phase III)

22
 Annexure-III

S. No. Activities Man Amount

Days (Rs.)

B) REPORTING, CO-ORDINATION MEETINGS: 30,000,000

Reporting Co-ordination Meeting, Presentation in
Pakistan, Travel Costs, Air Fares, Accommodation,
Other Travel Costs.
30,000,000

C) MANPOWER REQUIREMENTS AND TRAINING 20,000,000

ARRANGEMENTS
20,000,000

D) MONITORING CELL (MC) IN SCA 10,000,000

Pay & Allowances (Appendix-B)
10,000,000

E) RECURRING EXPENSES
Stationery 200,000
POL 8,000,000
TA/DA 1,800,000
Telephone/Fax 300,000
Repair & maintenance of vehicles and durable goods 23,000,000
Postage/Couriers 100,000
Entertainment 200,000
Utilities Electricity/Water/Gas 400,000
34,000,000

F) DURABLE GOODS
Suzuki Jeep 4x4 02 No. 2,200,000
Computer with Printer and Accessories 02 No. 400,000
Photostat Machine 01 No. 300,000
coloured heavy duty
Fax Machine / Calculators / Camping Equipment/Kits 600,000
Furniture & Fixture 2,000,000
5,500,000

G) CONTINGENCIES / MISCELLANEOUS: 500,000

500,000

GRAND TOTAL(A+B+C+D+E+F+G) 450,000,000

23
 Appendix “B”

(a) Details of Personnel Required (fixed remuneration):

S. Name of post No. of Monthly Total

No. post remuneration
01 02 03 04 05

01. Project Director/Senior Mining 02 75,000 3,600,000

Engineer (BS-18)
02. Assistant Director-Tech. (BS-17) 04 45,000 4,320,000
03. Electrical Engineer (BS-17) 02 45,000 2,160,000
04. Mechanical Engineer (BS-17) 02 45,000 2,160,000
05. Chemical Engineer (BS-17) 02 45,000 2,160,000
06. Environmental Engineer (BS-17) 02 45,000 2,160,000
08. Computer Operator (BS-12) 04 12,000 1,152,000
09. Driver (BS-4) 08 6,000 1,152,000
10. N.Q./Attendant (BS-2) 04 6,000 1,152,000
Total 20,000,000

Note: 1. Supervision and evaluation consultancy shall be required in the

fields viz. electrical engineering, mechanical engineering, chemical
engineering, financial appraisal, environmental management, etc.
as per mechanism decided by the Steering Committee without any
compromise on scope and quality of the study. Precisely, the entire
job as per the TOR/the contract for the study, shall be supervised
and monitored, so as, to have factual position and a reliable
document.

2. The mechanism for supervision and monitoring shall be as decided

by the Steering Committee.

24
 GOVERNEMNT OF SINDH
SINDH COAL AUTHORITY

TERMS OF REFERENCE

for

PREPARATION / UPDATING OF BANKABLE FESIBILITY STUDIES

AT SONDA-JHERRUK / THAR COAL MINING

SINDH PROVINCE OF PAKISTAN

25
 PREPARATION / UPDATING OF BANKABLE FESIBILITY STUDIES
AT SONDA-JHERRUK / THAR COAL MINING

TERMS OF REFERENCE

STUDY BACKGROUND AND SCOPE OF WORK

1.0 INTRODUCTION

1.1 Background

i) Sonda-Jherruk Coalfield:

The Geological Survey of Pakistan discovered Sonda-Jherruk coalfield in

District Thatta in 1981, which has been a centre of exploration activities.
Exploration in this area has been based on the extensive coal basin in the east
Indus indicates that in the northern region in Lakhra, coal is formed in back
barrier environment, whereas in the southern region in Sonda and Sujawal, the
coal beds were deposited in lower deltaic plain.

The Sonda-Jherruk coalfield covers an area of over 1822 sq km. (Sonda Block-
1400 sq. km) and (Jherruk Block-422 sq. km.). The drilling data indicate that the
coal is thickest near Jherruck, where the cumulative thickness of coal is 6.2
meters. Coal largely occurs within thick lenses of siltstone and mudstone.

The Sindh Coal Authority has investigated a block comprising 90 sq. km.
through a private consultant firm in 2006-07, results which indicates total
resources of 194.39 million tones in the blocks. The cumulative coal seam
thickness varies from 0.46 to 6.04 meters and thickest coal seam encountered
1.67 meters. The coal encountered at depth of 65.16 to 186.23 meters.

The coal seams in the upper zone and above the Sonda seam in the geological
column are termed as Dhaduri seams, whereas the name of Jherruck seams is

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assigned to the coal seams falling in the lower coal zone below the Sonda
seam. Three other seams encountered and stratigraphically just above the
Sonda coal seams, in the middle coal zone are named as Inayatabad seams.

The coal resources of Sonda-Jherruk coalfield are about 7.112 billion tons. The
weighted average chemical analysis of Sona-Jherruk coal, on as received
basis, is as follows:
• Moisture (AR) 31.23-34.72%
• Volatile Matter 27.9%
• Fixed Carbon 25.2%
• Ash (AR) 7.69-14.7%
• Sulphur (AR) 1.38-2.82%
• Heating Value (AR) 6,780 - 11,029
(Btu./Lb.)

Sonda lignite is suitable for electric power generation.

Sonda-Jherruk coalfield area is accessible by metalled road from Karachi and
Hyderabad through National Highway at ant approximate distance of 125 km
and 80 km respectively. The railway link is up to Jangshahi and Jhimpir, which
are about 25 km to 35 km from the coalfield area. Indus River flow through the
coalfield area.

Detailed information shall be provided on request.

ii) Thar Coalfield, District Tharparkar:

Thar Coal field, spread over an area of about 9,100 sq. km. at Thar district
Tharparkar, Sindh-Pakistan, coal deposits, is located in Thar Desert, which in
fact is an Arid Zone, in South-East Pakistan, in eastern Sindh province
discovered in 1980s. After reconnaissance appraisal jointly by the Geological
Survey of Pakistan (GSP) and the United States Geological Survey (USGS)
during the period 1992-93.Detailed exploration was undertaken by Geological
Survey of Pakistan for four blocks and by Sindh Coal Authority for two blocks
over an area of 486.16 sq. km. Based on 289 drill holes, coal reserves of
12.764 billion tons, were calculated.

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Based on the reconnaissance programme, preliminary evaluation of resources
showed extremely high in-situ tonnage of coal (coal ASTM Type B) in seams of
extractable thickness up to 22.85 m. Depth of coal is 114 meters minimum and
203 meters maximum. The cumulative coal seam thickness is 36 meters. The
coal reserves of the entire Thar coal-field (about 9,100 sq. km.) are estimated to
be 175 billion tons.

Exploration drilling by GSP has continued over the coalfield area and to date
(June, 2006) the definition of Thar coal resources is based on a total of 289 drill
holes for which drill hole logs and geophysical records are available in addition
to Boyd study.

1.2 The objectives/scope of the Study

1.2.1 General

The overall objective of the study, which will be conducted through consultants,
is preparation of project specific Sonda-Jherruk Coal Mining Feasibility Study,
the results of which will enable the potential investors to plan further and
provide details that may be required by the potential financiers for projects
based on coal utilization.

To review the existing Bankable Feasibility Study of Thar Coal Mining

conducted by RWE Power International of Germany with a view to sort out the
shortfalls and to update as the Bankable Feasibility Study Report of
international standards.

1.2.2 Specific

More specifically, the objectives of the Consultancy Agreement for the study
shall be:

(a) design, conduct, manage and interpret an Exploration Programme

which will be adequate to delineate, to a level of confidence appropriate

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 for a bankable feasibility study for about a 500 MW - 1000 MW
minemouth power station. Coal reserves for a minimum period of 30
years which can be worked out carefully alongwith estimated cost and
economic return;

(b) prepare a project specific Feasibility Study of Sonda-Jherruk Coal

Mines with annual production to cater for about 500 MW - 1000 MW
minemouth power station or as suggested by the consultants. The study
to also identify a proposed mine area at Sonda-Jherruk coalfield and
determine whether and on what basis it is technically, environmentally
and economically feasible to mine Sonda-Jherruk coal;

(c) the initial exploration area for delineation of the area for the bankable
feasibility study for a mine of required size is to be selected from the
three evaluated blocks No.1, 3 and 4 by GSP, to be selected by the
consultant. However, the consultants would be at liberty to select any
other area for initial exploration, if considered necessary and proceed
further with approval of the Steering Committee;

(d) the study shall furthermore determine the most economic, efficient and
reliable technology to operate the coal mine. The investigations will also
take into consideration the environmental, infrastructure and adequate
manpower requirements of the coal mine;

(e) determine the minemouth cost per tonne of Sonda-Jherruk coal at a price
lower or equal to prevailing international pit mouth price of lignite;

(f) prepare a feasible schedule, which links incremental production stages to

reach target of annual coal production/extraction for about 1000 MW
power station;

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(g) prepare a detailed financial analysis which determines the cost of
development and operation of the coal mine and the finance-ability of the
mine development;

(h) to conduct all geo-technical studies, but, not restricted to hydro-

geological and environmental impact analysis.

1.3 Study Phasing

In order to meet the objectives for overall project development and for
implementing and managing the Consultancy Agreement, the following study
stages and schedule have been determined.

For facilitation of consultant following broad outlines for various stages for
preparing comprehensive technical and financial proposal is suggested:

Phase 1: Review and Planning Stage

♦ Data Review and Report - includes compilation of existing data.

♦ Design and Specification of Exploration Programme and sub-contracts.
♦ Preliminary topographic data for the mine.
♦ Study Implementation Schedule.
♦ Study Inception Report.
♦ Approval of Planning and Implementation Schedule by Client.

Phase 2: Exploration Stage

♦ Mobilization and Procurement (permits, access, transport, security, office

base);
♦ Outline Exploration and target Mine Area Delimitation and drilling duly
supplemented by geophysical log;
♦ Interim Exploration Report;

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♦ Detailed Exploration of Potential Mine Area to a level sufficient for
preparation of bankable feasibility study as per acceptable international
standards;
♦ Collection of drill hole samples for testing, analysis, - for reporting in detailed
Geological and Geo-technical Report;
♦ Geotechnical and Hydrogeological drillhole and test programmes and study
for incorporation in the Geotechnical Report;
♦ Determine the parameters needed for site characterization;
♦ Environmental and Soils Assessment and Sociological Strategy studies to
define the effects of mining and its application, specially power generation at
the deposit on the current inhabitants of the area and their economic system,
for presentation within the Site Assessment and Rock Characterization
Report;
♦ Deposit Modelling, Hydrological Modelling and Detailed Geological Report, to
form part of a detailed Site Assessment Report.

Note:
The GSP facilities for geological investigations including drilling,
chemical analysis, coal petrography, geophysical and other related
works would be available to the consultants at the commercial rates.
Besides, the Government of Pakistan policy regarding local consultancy
component would also be followed.

Phase 3: Mine Design and Project Feasibility Stage

♦ Identification of various/alternate mine designs in order to achieve the target

production schedule.
♦ Definition and determination of fundamental design parameters which are
implicit to any of the alternative mine design options e.g. required production
schedule, target quality for run-of-mine coal, layout of mine infrastructure,
slope design criteria, management of the hydrogeological regime, if
required; coal handling and stocking techniques etc.

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♦ Evaluation of potential mine designs and alternate equipment configurations
in order to achieve the target production schedule.
♦ Outline technical and cost analysis to define Preferred Mining Option in
terms of safety, stability and economy.
♦ Detailed mine design for Preferred Mining Option with Production Schedule.
♦ Environmental Impact Assessment and Draft Environmental Management
Plan for the Preferred Mining Option.
♦ Personnel Recruitment and Training Plan.
♦ Determination of development requirements.
♦ Estimation of waste rock dilution and coal losses.
♦ Waste mining and waste disposal.
♦ Labour and equipment requirements, cost and an appropriate replacement
schedule for the major equipment.
♦ Mine Development Schedule to achieve equipment procurement, pre-
production construction, training of personnel etc. to correspond to the
Production Schedule.
♦ Detailed Financial Analysis based on the Preferred Mining Option with a full
range of sensitivity analyses to reflect all significant perceived project
variables, risks.
♦ Mine Feasibility Study Report, to provide a complete Technical and
Financial appraisal of the mine project with calculation of the mine-mouth
cost of coal and appropriate sales price based upon a stated rate of return
on investment and the calculated delivered transfer rate of return on
investment and the calculated delivered transfer price to the power complex.
♦ Finance-ability Report, to document the economic evaluation aspects of the
study including accurate financial appraisal of the coal mine and related
facilities.
♦ Draft Sonda-Jherruk Coal Mining Feasibility Study Report to be presented in
a seminar and modify/improve, if required.
♦ Submission of final report.

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Updating and Preparation of Report on Bankable Feasibility Study of Thar
Coal Mining

Thar coalfield is spread over an area of about 9,100 sq. km. The USGS & GSP
investigated 4130 sq. km. and Sindh Coal Authority investigated 130 sq. km.
through M/s. China Northeast Coalfield Geological Survey Bureau. Besides,
exploration for development of additional two blocks is also under progress.

Maximum cumulative thickness of coal bed/seam is 36 meters. Whereas, the

thickest coal seam is 22.18 meters between 150 and 203 meters depth.
Thickness of overburden varies from 114 to around 200 meters.

Quality of Thar coal is Lignite “A” to “B”. According to analysis, the weighted
average chemical analysis of Thar coal, on as received basis, is as follows:
• Moisture 46.77%
• Ash 6.24%
• Volatile Matter 23.24%
• Fixed Carbon 16.66%
• Sulphur 1.16%
• Heating Value 5,774 BTU/Lb.

The measured reserves of lignite coal in six blocks of Thar coalfield are over
12000 million tones, whereas 200 million tones are sufficient to generate 1000
MW electricity for 40 years. Only 50 sq. km. area will be required.

Thar lignite is recognized as a major energy resource in Pakistan with a high

potential to support and replace energy production from indigenous resources
substantially.

Government of Pakistan and Government of Sindh have on priority basis

developed all necessary infrastructures like electricity, road, telephone and
water supply lines upto coalfield.

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M/s Shenhua Group of China sponsored a project for establishment of
integrated coal mining and power generation project and conducted detailed
coal geological and hydrological investigations in Block-II and submitted
comprehensive statement. The investigations aimed at assessment of coal and
water resources to meet requirements of coalfired power plant of 2 x 300 MW
minemouth and development of coal mine. Basic data in shape of
Comprehensive Statement has been submitted in August, 2004 and detailed
feasibility study is awaited.

In order to update the existing investigations reports, especially of Shenhua

Group Corporation of China, a consultant firm of international repute would be
required to examine, update and prepare a comprehensive Bankable Feasibility
Study Report of international standards.

-x-

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