A subsidiary of Global Mining (China), Sino-Sindh Resources will receive $1bn from the Industrial and Commercial Bank of China (ICBC) for the development of block-I of its Thar coalfield project in Pakistan.

ICBC bank has issued a letter of interest to provide the total amount in the form of a ten-year loan, to help extract coal from block-I of the project.

Sino-Sindh Resources CEO Chaudhary Abdul Qayyum told the Express Tribune: "This covers 75% of the capital cost of phase one of the project while 25% will be equity, which will be raised by a consortium.

"This covers 75% of the capital cost of phase one of the project while 25% will be equity."

"We hope that the financial close will be achieved in the second quarter of this year."

Block-I of Thar coalfield, which is located in the Thar Desert, Tharparkar District of Sindh province, is said to be spread over an area of 150km².

Upon achieving the financial close of the project, Sindo-Sindh is expected to commence coal extraction and will initially produce 6.5 million tonnes a year.

Commercial coal production is slated to start by the first quarter of 2018.

Shanghai Electric, under the China-Pakistan Economic Corridor, will execute the company’s coal project.

According to Sino-Sindh Resources, a 2km to 2.5km conveyor belt need to be put in place to transport coal from the mine to the mine-mouth power plants.

Once the loan period ends, the cost of electricity for the initial ten years will decline to six cents per unit from the existing 8.5 cents per unit.