Potential Partners

Discussions with Chinese Partners

The Company has had a long series of discussions with potential Chinese partners since 2013. The initial contact was with CAMCE, a division of Sinomach. This resulted in a Joint Development Agreement for the open pit mine which was signed in September 2013. This agreement has not been formally terminated, but the discussions were placed on hold whilst the Company explored other options.

Later in 2013 the Company signed a Memorandum of Understanding (MOU) with SEPCO, the Shandong Electric Power Company, a subsidiary of Power China. This initially covered the construction of a 600MW power plant.

In September 2014 the Company has signed an EPC Framework Agreement with SEPCO for the development of both the 4Mt per year open pit mine and the 600MW power plant . Under this agreement the Company is negotiating detailed Engineering, Procurement and Construction Contracts for the mine and the power plant. In these negotiations the Company is working with its advisers, Mott MacDonald UK on the power plant and Turner and Townsend on the mine development..

In parallel the Company is developing a financing term sheet to cover the proposed project financing of the project with Sinosure, the Chinese export credit agency.

Discussions with K-Electric (KE), formerly Karachi Electric Supply Company (KESC)

In 2012 KE signed a Joint Development Agreement (JDA) to develop a 300Mw power plant with a potential increase to 1,100Mw capacity over time. The company maintains a cooperative working relationship with KE.

Other Discussions

The Company has signed a Shareholder Framework agreement, subject to conditions precedent, with new and existing Chinese partners under which, they will take a 70% equity interest in SCEL and TEPL.