“The main reason for the withdrawal by the Shenhua Group Corp of China is the power tariff rate offered by Pakistan, which the Chinese side deemed insufficient to continue power generation. Security and domestic workload have reportedly been cited as the other reasons that forced the company to drop its plan.
Several foreign and local companies prepared feasibility reports in the past and confirmed availability of coal deposits, but they were reluctant to start power generation because of an unfair pricing formula for coal-fired power generation.
Experts in Pakistan stress the need for developing a uniform pricing formula for electricity purchase to ensure that foreign investors will set up coal-fired power plants in the country.”
Full story at:
http://www.atimes.com/atimes/South_Asia/IE18Df04.html
The Shenhua Group Corp is the world's top coal producer and very prominent in Coal to Liquids and therefore prominent in UCG. For the world’s top coal producer, a Chinese company no less, to pull out speaks volumes. China does deals in the most unstable countries in the world. How could an Australian Micro-cap steal away such a great prospect from the world’s top coal producer?
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