KARACHI: Chinese coal company has cautioned to close coal production in Thar Coalfield over non-payment of arrears, citing sources ARY News reported on Wednesday.
The production at Thar coalfield could be suspended after September 10, resulting in shutdown of 1320 megawatts power generation from the region, sources said.
The arrears of China Machinery Engineering Corporation have soared to US$50 million, and delay in June to August payments causing difficulties for the company to perform its contract issues, sources said.
The firm’s China head office has given deadline for recovery of all payables by October.
In the next four months more 30 million dollars would also require to be paid, and the contract period will by concluded in four months.
Chinese firm has informed the Sindh Engro Coal Mining Company in a letter that it could not continue coal production from Thar Coal Block-2 if the arrears would not be paid by September 10.
“There is shortage of machinery spare parts due to non-payment and key equipment will likely to shut down for long duration,” Chinese company’s letter read.
“It will be difficult to keep daily production of 25,000 tons coal continue after September 10. Sindh Engro Coal Mining Company must ensure payment of arrears prior to Sep 10,” Chinese firm has demanded.