Coal Production
China Machinery Engineering Corporation (CMEC) Pakistan has voiced concerns regarding difficulties in transferring funds to import equipment, which could disrupt daily coal production of 25,000 tons. Failure to address this issue promptly may lead to a production halt.
Between April and July this year, the company successfully transferred $22 million in overdue receivables to the CMC offshore account, despite Pakistan’s severe foreign exchange reserve shortages.
However, monthly offshore receivable remittances from SECMC have significantly decreased since June. In June, only $3.7 million was remitted, falling far short of the expected $10 million monthly payment.
In July, SECMC remitted only $3.4 million, and in August, they did not pay offshore overdue receivables at all. As of the end of July, the “overdue receivable” had surged to $50 million according to statistics.
Currently, there are just four months remaining in the contract period for the Thar Coal Mine Project, with approximately $30 million in offshore and onshore milestone payments due in the coming months.
Addressing and resolving the issue of reducing and clearing “overdue receivables” during the contract period has become the paramount challenge for both SECMC and CMEC.
Failure by the CMEC site team to meet the “overdue receivable” collection task will result in stringent assessments and wage deductions, placing immense psychological and economic pressure on the team.
As per discussions between both site teams, CMC commits to overcoming the substantial equipment shortage and maintaining a daily coal production rate of 25,000 tons until September 10.
During this period, SECMC must obtain payment approvals from the relevant bank or government and send confirmation emails to CMEC following the provided payment schedule.
Failure to do so may force Thar Coal Mine to undergo significant production cutbacks or even come to a complete halt.
