Chinese group pulls out of Thar coal mining project
The Kingho group, one of the China’s largest private coal mining company, has withdrawn from the Thar coalfield all of a sudden and it seems as if the company has lost its interest in the mining project in Pakistan.
The Chinese group came up with an attractive 20-yearlong investment program in the Thar coalfield but its sudden withdrawal has raised several questions on the scope of foreign investment in the country.
The news of Kingho’s pull out first came on 30th September, when the Wall Street Journal (WSJ) reported that one of the officials of the company is more concerned with the security of his personnel and quoted that Kingho will quit its projects in Thar in August. It was due to drastically bad law and order situation and terrorism attacks in Karachi and other major cities of Sindh at that time.
The WSJ’s statement about the actual reason for Kngho’s withdrawal was more political, rather than economical. In the light of deteriorating relations of Pakistan with the United States, the Chinese investors have also shown their reluctance to help Pakistan in a big way, as they believe that “Islamabad may remain dependent on aid from Washington for some time to come.”
The WSJ also mentioned that, “Islamabad, in Beijing’s eyes, has failed to live up to its promises, including to ensure security for investments. A number of Chinese workers have been killed in Pakistan in the past decade, some of them in troubled Balochistan province, where armed separatist insurgents have opposed Chinese investments.”
When the authorities in Sindh were questioned about the matter, Zubair Motiwala, the chairman of the Sindh Board of Investment, validated Kngho’s withdrawal from Thar but he remained persistent on his view that it is only a temporary one. He further told that the company has not lost its interest in the coal mining projects in Thar and has not refused or abandoned its projects.
Another reason for Kingho’s withdrawal has been presented by the local news papers, stating that the Chinese group has pulled out from Thar after its unsuccessful negotiations for loans from the banks and financial institutions. It was said that the banks have refused to extend loans to Kingho for the reason of uncertain conditions in Karachi and unavailability of funds have let the company abandon its operations.
The authorities have claimed that a number of foreign investors are showing their interest in starting projects in Thar and they believe the mining sector in Pakistan can generate a lot more export revenue than the textile does for Pakistan.