They both will jointly utilise their expertise and technical know-how to design and construct a coal-washing plant at Lakhra in Sindh. The project activities will be initiated in March 2005.
The plant will be the first of its kind in the country, being established in the private sector. The project will have a capital of over $8 million.
The proposed plant will have an annual capacity of processing 1.5 million tonnes of indigenous coal to produce 1.0 million tonne washed or enriched coal for use mainly by the cement industry.
In Phase-II the plant is planned to achieve a production of 2 million tones of washed coal. Sufficient reserves are available in Lakhra field to ensure continuous supply of coal.
Lakhra coalfield is conveniently located at a distance of 193-km from Karachi, 20-km from Indus Highway and 15-km from Khanote Railway Station. A 132 kV Power Line passes close to the coalfield.
The company had carried out pre-feasibility studies and also arranged analysis of 50 representative samples of Lakhra coal from Fuel Research Centre of PCSIR, Karachi.
The results of the study indicated 15 percent pyretic sulphur amenable to reduction and ash ranging from 7 to 28 percent, which can be reduced substantially.
The study revealed that Lakhra coal is suitable for washing and has good prospects of return of investment in about three years. Bulk coal samples from Lakhra coalmines of 8 companies were subjected to sink & float tests to determine reduction of sulphur & ash and percentage yield.
The study concluded that the raw coal after washing has cumulative yield of 75 percent, with average ash content of 12 percent and average sulphur content of 3.6 percent.
Mine-able reserves of coal in eight potential mining companies at Lakhra had also been studied. With recovery ratio of 60 percent, the recoverable reserves have been estimated at 72.8 million tonnes, which fully justifies setting up of a coal washing plant of one million annual capacity.
It is pertinent to mention that Chinese company, COVEC, had a major contribution in the construction of Karakoram Highway, linking Pakistan and China. While Shahzad international is a Pakistani Group of companies that also holds two gold-prospecting licences in Northern Areas ie Ranthank Block and Hushe Block in Skardu District.