Global Coal Management Plc (formerly Asia Energy PLC)



Overview

GCM Resources plc (GCM) is a London-based resource exploration and development company. Its principal asset is its undeveloped coal deposit in the Phulbari region of Bangladesh, the development of which is awaiting approval from the Government of Bangladesh. It also has investments in other companies with mining interests. The company's shares are quoted on the Alternative Investment Market (AIM). (Ticker code: GCM).

The Phulbari Coal Project is a substantial, world class coal resource that will support a long life, low cost mining operation. It is the only such deposit in Bangladesh that has been subjected to a full Feasibility Study and Environmental and Social Impact Assessment prepared to international standards. In partnership with the Bangladesh Government, civil society and the community, GCM is committed to developing the Phulbari Coal Project to the highest social and environmental standards. By doing this, GCM seeks to maximise the benefits of the Project for both the Company’s shareholders and the people of Bangladesh.

The Company (GCM) under its former name, Asia Energy PLC, was incorporated in England and Wales as a public limited company on 26 September 2003. Asia Energy PLC was admitted to the Alternative Investment Market (AIM) of the London Stock Exchange on 19 April 2004. Through seed capital raising and the subsequent placement of shares, some £14 million was raised.

In November 2005, following submission to the Government of Bangladesh of the Phulbari Coal Project's Feasibility Study and Scheme of Development, the Company placed an additional 7 million shares and raised a further £33 million.

GCM actively reviews investment opportunities in order to broaden its global investment portfolio.

Coal Project facts

■ Energy security and diversity – The Project has a unique role to play in addressing the country’s electricity shortfall as its development will provide the basis for a step change in the country’s electricity generating capacity.
■Regional development – The Project will provide 17,000 jobs (direct and indirect). In addition the development of new industries using the industrial mineral co-products from the mine will create thousands of more jobs. The living conditions of all affected people will be improved and their livelihoods will be restored and in many cases improved. As a result of year round irrigation, improved water quality, improved inputs and improved farming practices it will be possible to produce three crops per year with higher yields than at present.
■Huge economic impact – Phulbari will contribute 1% to Bangladesh’s GDP each year and pay US$7.0 billion in taxes, royalties and service charges to the Government over the life of the Project. The replacement of high sulphur imported coals and other hydrocarbons will have a positive effect on balance of payments and air quality.

In partnership with the Bangladesh Government, civil society and the community, GCM is committed to developing the Phulbari Coal Project to the highest national and international social and environmental standards. By doing this, GCM seeks to maximise the benefits of the Project for both the company’s shareholders and the people of Bangladesh.

Background

Bangladesh is one of the most densely populated countries in the world with some 162 million people living in an area two thirds the size of the United Kingdom or about the size of New York State. Less than one third of its population live in cities while the majority live in rural areas relying on a predominantly subsistence lifestyle. GDP per capita is around US$1,700 (ppp) per annum compared with a world average of US$10,500. Less than half the population have access to electricity. Bangladesh is a country of enormous potential. It has the eighth largest work force in the world and is included in the “Next Eleven” countries that, after the BRICs (Brazil, Russia, India, and China), were identified by Goldman Sachs as having the potential to become the world’s largest economies in the 21st century. It has enjoyed more than 6% economic growth in real terms over the last five years as well as substantial improvements in measures of human development. For example, between 1980 and 2006 life expectancy has improved from 48 years to 63 years and literacy rates have improved from 29% to 53%.

Bangladesh is one of the most climate vulnerable countries in the world with a significant proportion of the population living in remote or ecologically fragile areas such as river islands or cyclone prone coastal areas. Two thirds of the country is less than five metres above sea level making it vulnerable to the predicted effects of climate change.

Although Bangladesh is vulnerable to the effects of climate change, it is not itself a significant emitter of carbon dioxide. Per capita carbon dioxide emissions (0.3t/capita) are substantially below other countries in the region (Pakistan 0.9t/capita, India 1.4t/capita, China 4.9t/capita) which themselves are substantially less than emissions from developed countries (UK 8.9t/capita, USA 18.9t/capita). Even with the addition of the 4,000MW of electricity capacity which Phulbari coal could support, Bangladesh would still be one of the lowest emitters of carbon dioxide in the world, substantially less per capita than its neighbouring countries.


http://www.gcmplc.com/

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Mining with a vision for people's benefit, ecological safety
Bangladesh can learn a lot from German open pit coal extraction
Sharier Khan, back from Cologne, Germany

There is a lot that Bangladesh can learn from German experience in maximum utilisation of coal resources through maintaining environmental balance, efficiently handling human displacements, agricultural land replacement and maintaining political soundness.

With a tradition of more than 100 years of open pit coal mining, Germany produces 33,000 megawatt or one third of its power from lignite coal and another 25,000 megawatt from hard coal ensuring minimum damage to the environment, thanks to strict monitoring by the government and pressure groups.

A visit to the mines and coal-fired power plants in the North Rhine Westfalia zone around the German city of Cologne demonstrates that mining is just not a profit making business for a company, rather it is a national affair.

Mining in Germany is based on sensible politics and a vision to ensure benefit for its people and entrepreneurs, and minimise environmental hazards. A mining company cannot just do whatever it wishes but when it has a government nod, its mining plan cannot be hindered.

The Daily Star correspondent visited the mines and coal power plant installations near Cologne at the invitation of Asia Energy Bangladesh between July 25 and 28. The Daily Star covered the travel and hotel costs of its correspondent while Asia Energy that has stakes in the Phulbari Coal Mine facilitated the visit in collaboration with Germany's biggest mining and power company RWE.

Also one of the top European power and gas companies, RWE is a consultant company for Asia Energy for handling Phulbari project's most sensitive area-- water table.

Germany's vast "lignite" coal mines are mainly located in agricultural lands and villages near Cologne, and therefore, the home-grown mining companies work with the government and communities to ensure fair resettlement and compensation, according to executives of Germany's leading coal mine and power developer RWE GmbH.

From the fifties, about 50,000 people have been resettled to facilitate large scale open-pit mining. Of them, 10 per cent resisted resettlement. But relevant German laws demand that individuals must give up their lands for the greater benefit of the nation. Therefore, they lost legal battles and had to settle with their compensation.

The vast open-cast mining areas, where miners have completed mining and filled up 300 to 400 metre voids with soil, have now been converted into deep forests and agricultural lands.

The country annually produces 100,000 million tonnes of 'lignite' coal. Some of its open-cast mines can be as big as 20 square kilometers. The country still has a reserve of 50 billion tonnes of lignite, of which 10 billion tonnes can be commercially mined.

With an annual turnover of Euro 6574 million, RWE is 18,467-strong and it alone produces 11,000 megawatt power from lignite coal. It also generates power from hard coal, nuclear fuels, gas and renewables. In addition to Germany, RWE also sells power to UK and central and east European countries.

*****************
Dhaka, Tuesday August 7 2007

Asia Energy wants to apply German open pit methodology in Phulbari coal mine project

COLOGNE (Germany), Aug 6 (UNB): Asia Energy (Bangladesh) Corporation Ltd. wants to apply the same open pit methodology in its Phulbari coal mine project that was applied by Germany's RWE at a coal mine in Cologne.

RWE is one of Germany's largest energy and power company now producing 15 million tons of coal per year from its Hambach mine in Cologne and also generating 10,000 MW of power from its coal-fired plants.

The energy giant produces 30 per cent of total electricity of Germany and 20 per cent of brown coal.

The German company has been extracting coal from its Hambach mine in Cologne for the last more than 100 years with an annual production capacity of 40 million tonnes. The RWE is producing 1,30,000 tonnes per day.

The RWE has set a unique example in relocating and resettling the local habitants and also in protecting the environment.

Gary N Lye of Asia Energy told a group of Bangladeshi journalists visiting the RWE coal mine in Germany that his company planned to apply similar methodology in developing the Phulbari coal mine in Bangladesh.

Asia Energy submitted a development scheme after its feasibility study in Phulbari coal mine area, where it determined the mine's coal reserve to be 572 million tons. But the Bangladesh government is yet to approve the plan. The Asia Energy will produce 15 million tons per year.

The RWE developed a forest at its reclaimed area just alongside its coal mine.
The German company has to dig 350 metre deep into the ground to extract the coal through its gigantic Bucket-Wheel Excavators.

The coal will also be brought to an adjoining 2400-MW power plant direct from the mine through a huge conveyer belt.

Dr. Thomas Von, RWE's head of Geology and Hydrology, while briefing about the Hambach mine, told reporters that they had to relocate more than 30,000 people from the mine areas who had also been rehabilitated in other areas of their own choice.

http://www.thefinancialexpress-bd.com/search_index.php?page=detail_news&news_id=7071


: ))

Smiler, are you watching ! :-)

You never know, we may be on our way !!

Bangladesh: Coal Policy Mellow Drama [ Print ]
Coal


By- Khondkar Abdus Saleque

Bangladesh has substantial reserve of high quality bituminous coal. It has comparatively high heating value and low ash content which makes it very much suitable for use as steam coal. It has been considered as the best alternative for our overstressed natural gas in predominantly mono fuel based energy scenario. Bangladesh imports very poor quality Indian coal now which is mostly used in the brick fields. The only producing coal mine at Barapukuria has turned into a white elephant. It can not even support the mine mouth power plant. The fate of other major mining prospect at Phulbari is hanging in a delicate balance. The wrong myth and adverse propaganda of a vested quarter has stalled the open pit surface mining initiative of British Company AEC.

Amidst apprehension of known gas reserve to run out in a decade or so the exploration of coal has become a top priority national agenda. But Bangladesh is still struggling to find an appropriate strategy for it. Bangladesh at this moment does not have required capacity to explore or manage the exploration of coal on its own. No qualified mining professional is active in the public sector. Our record of mining is also very pathetic. The Barapukuria coal mine is a disaster. The wrong designs, inappropriate method of extraction, weak management have caused us to waste huge amount of money. A privileged syndicate however got flattened. But policy makers are not ready to realize that we do not have any capacity to undertake any type of mining on our own. Energy Secretary in a workshop reportedly stated that he himself although not a line professional yet he has learnt a lot about mining visiting some coal mines in different countries. He promised that the coal policy would be finalized by July 2007

Energy reporters of different Bangladeshi dailies are writing their eye witness account of open pit coal mining in Cologne, Germany. They have visited surface mining of Lignite coal and have witnessed how coal is being mined in the most safe and environment friendly way, how the surface and subsurface water management are being done. They have witnessed with their own eyes how the mine area recovers it original shape and in most instant much better shape after mining. Hope this may help neutralize the myths and mis-propaganda of a section of certain section of our civil society who are unnecessarily agitating against surface mining.

The visit has been arranged by Asia Energy Corporation which has mining contract with Bangladesh Government for Phulbari Coal Mine at Dinajpoor. After very extensive feasibility studies AEC submitted development plan for the mine sometime in late 2005.They proposed for surface mining and provided all techno economic justification, rehabilitation and resettlement plan, water management and other issues related to the mining. They got approval of environment directorate. They were due to get the government approval by early 2006. But following their submission a group of Bangladeshi civil society comprising of University teachers, left leaning politicians and economists started agitating against the AEC and open pit mining. Neither government nor AEC tried to clarify issues at the beginning and let the sentiment grow. The weak and self seeking government of the day also did not take proper action in time. Rather a very level headed energy advisor through his statements helped to add fuel to the fire. Reportedly some important persons given responsibility to examine the AEC surface mining proposal while visiting site instigated local people telling them about adverse impact of mining .The people of Phulbari were told they will not only loose their property and assets , they will not be getting adequate compensation, they will not be rehabilitated their income will not be generated. They were also told open pit mining will make the entire western region a desert and agricultural lands will be destroyed. But after visiting the open pit mine in Germany and seeing for themselves the mining method, water management and relocation & rehabilitation of affected people whatever the Journalists are writing is not supporting the propaganda our so called patriotic civil society propagated so long. So, all the myths are unfounded against open pit mining methods. We always told these and tried to express the same in various write ups. But the weak and motivated Government did not listen. The so called academia having no practical experience was more important. Their agitation caused bloodshed in Phulbari and some innocent people lost their lives.

The energy reporters can now say whether the surface mining method is safe or not.

If the mining method is technically safe and environmentally acceptable the mining method must not have any problem to accept as it will ensure 85-90% of the coal recovery. If rehabilitation and relocation are proper then the local affected people have no worries to get evicted and getting rootless. If the coal can be effectively used for power generation then it will create energy security. We have high quality Bituminous coal having higher heating value and low ash content. The mine the Bangladeshi Journalists visited has lignite coal which is much inferior.

Some of the journalists have written about royalty issues. Royalty is one of the hotly debated issues of AEC contract The Contract has 6% royalty, which the agitators term very low. If Bangladesh starts getting coal from the mines the coal will be only exported after meeting the domestic demand. Bangladesh will straight away get 6% royalty. Then there is other taxes and levies. AEC will set up 1000 MW mine mouth coal fired plants which will consume substantial amount of coal. If during the tenure of mining Bangladesh Government and private companies set up power plants and other industries they can access this coal. So as far as utilization we find no problem. If export of coal helps our evening out trade balance with some countries where is the problem? But the question of export may arise if and when the domestic market can not consume. This provision can be made in the coal policy. AEC will definitely not produce at abnormally high rate to jeopardize its operation. Still as the royalty is a hotly debated issue Government may renegotiate the same with AEC to make them agree at a reasonably higher rate. But then who will account for cost increase of mining due to 2years delay in handling the approval issues.

Well the author is an energy professional and willing learner. The author has now have opportunity to live in an Australian coal mining area and interact regularly with highly experienced coal miners. Some of my neighbors at Flinders Village in Ipswich are highly experienced miners. They discuss various aspects of mining when we enjoy Rugby and footy in the recreation centre on week ends. May discuss the draft coal policy with my neighbors and may come up with another write up soon.

It may be recalled that IIFC prepared a Draft coal policy for EMRD and submitted on December 1, 2005. Almost all known coal experts of Bangladesh was involved in the committee and it was a good basic document which was more or less realistic.EMRD, Petrobangla, BMD,GSB, discussed the draft the revised draft was floated on website for opinion. On February 8, 2006 very interactive workshop of the stakeholders created opportunity to make a very lively document for further processing. But unfortunately a very level headed energy advisor killed the prospective document. The document did not include any of the recommendations of the workshop due to the stubborn attitude of the energy advisor. After the vetting of Law ministry the document was sent for PMs approval. PM office returned the document seeking further clarification on comparative royalty rate, export provision of different coal producing countries etc.After clarification the document was sent again to PMO on June 26, 2006. This time PMO sent it to Dr. Nurul Islam, Head of the Department of Appropriate Technology BUET, a Chemical Engineer for opinion and comments. The gentleman is one of the favorite teachers of the author. He is a staunch believer that Bangladesh has capacity to explore and exploit all energy resources on its own. So he discourages FDI and induction of international companies for the work.. So his comments possibly took away all the incentives that IIFC draft policy and the stakeholders proposed for encouraging the investment possibility of private sector developers. Some people believe some of his comments earlier agitated the people of Phulbari to rise against AEC as he thought the open pit mining method would bring disaster to the country.

Sir, please take it easy. I learned lessons from you so I dare to politely disagree with your concepts which are wrong for many reasons. Bangladesh has no capacity for coal mining of its own at all. Bangladesh will never have a substantial market to absorb coal from even a single active economic size coal mine. Coal very soon will be discouraged for power generation as the plants for controlling Carbon emission will become very costly. So if Bangladesh at all desires to mine its coal it has to be by the reputed coal mining companies. The surface mining method is much safer in our geology of poor roof support and existence of strong aquifer above and below coal seams. We must now agree that the underground mining at Barapukuria was inappropriate. The only way to retrieve situation there is to suspend the mining and start it all over again in surface mining method.

Bangladesh can earn significant revenue through exporting apart of the coal and use the revenue for investment in petroleum sector development, energy from renewable and setting up of Nuclear power plant. But the limit of royalty, production rate, strict environmental control, relocation and rehabilitation issues of affected people their income regeneration should attain priority attention. The so called massive impact on surface and surface water system from surface mining is a myth. We are now building recycled water pipeline in Ipswich, Queensland through old open pit coal mines which left no visible impact on the environment.

Here rather the impact of Coal Fired Power plants due to GHG emission is more pronounced. The massive drought is largely attributed to the coal plants. So even if we explore our coal eventually the opportunity of coal fired power plants to dominate our case is very remote as serious carbon emission control will make coal plants very expensive soon. Use of coal in brick fields and other places will not create a domestic market. But we can get attractive price of coal in international market. Countries like Sri Lanka, India and China have ready market for our high quality coal.

We heard a committee headed by an additional secretary of EMRD made some recommendations which among others includes,

government sector should get preference in coal sector development, coal sale should be in local currency and no incentives for private investors for risk investments in exploration and mining will be offered other than existing rules and regulations for other industries. It has also eliminated the provision of arbitration.

If these are true and if the coal policy is approved like that it can be guaranteed that the coal of Bangladesh shall remain underground for ever. Bangladesh will keep on importing the poor quality Indian coal till eternity. Bangladesh will take 10-15 years to grow experienced mining professionals to meaningfully manage mines and will possibly never attain capacity to mine ourselves. Possibly no investor will risk its capital here to sale coal in taka only. It is unethical in international contract not to include arbitration clause. So in a way it is to say we will not allow any reputed mining company to come for mining here. We will sit on it until someone can allure some unworthy company from somewhere to come here to destroy our resources we may do that. No sensible patriotic citizen can let it happen.

We now heard that the government has let out the draft report on website for seeking opinion from interested persons. Well policy is a guideline. Individual contracts are to be made depending on specific geological conditions and detailed techno-economic feasibility studies. Only qualified and experienced mining professionals can provide useful input to Coal policy. So letting out the draft policy on the website may not bring desired result.

DR. Nafis Ahmed, a celebrated Bangladeshi Chemical Engineer did his PHD on Mining Technology from London School of Mines. He is highly regarded as a mining specialist. He is now working as consultant of UNICEF and is now based in Jakarta where his wife Farzana Ahmed is working in ADB. Nafis was Dean of Chemical Engineering Newcastle University, NSW and Australia. His wife Farjana, a chartered accountant herself worked in BHP while in Australia. Dr. Iftekhar Chowdhury as well as Chief Advisor Dr. Fakhruddin Ahmed is well aware of the competence and integrity of Nafis Farzana couple. Please send the document for their comments or the Government may even use Nafis and Farjana as consultants. Nafis can come up with appropriate recommendation as he had some works done on similar cases. He is more than willing to help his country of origin. Mahmudur Rahman had option to involve him as all three of us were intimate friends when we studied Chemical Engineering in BUET. Perhaps Mahmud thought he by virtue of his position knew more than Nafis.
Anyway if the coal policy gets the approval in its present shape it will be ridiculous and we will be made laughing stocks to the coal community.
We like to see a workable coal policy soon. We want to see the commencement of mining. Some theoreticians will always continue giving theories but the professionals and policy makers should not bother for those. Hope that the mellow drama of coal policy will have its curtain drawn at the earliest.

http://www.energybangla.com/article_det.asp?aId=626

Second chance for GCM

Edmond Jackson
08.08.07


Global Coal Management (GCM) is an interesting situation to watch at present. Previously known as Asia Energy, its AIM-listed shares (I have held mine since its spring 2004 flotation at 75p) have been a roller-coaster ride on expectations for mining a substantial coal deposit at Phulbari in Bangladesh. You can download a project brochure via the GCM website to learn more. The company has a sovereign contract with Bangladesh, underwritten by international law and, in spring 2005, the shares soared above 9 on broker projections that entertained long-term net asset values of 20 to 30 per share - due to the extent and quality of coal available in this world class deposit.

But, the market was overlooking risk factors with a developing country such as Bangladesh. Due to a substantial number of people - possibly 50,000 or more - needing re-location from ancestral lands, the situation was ripe for agitators. A year ago, events turned nasty when riots prompted shootings by the police and, to quell the unrest, a government representative said Asia Energy's contract had been cancelled. The shares, already wobbling, plummeted to about 100p. Not surprisingly, the company has changed its name and begun diversifying its interests via minority stakes in other miners.

But, the legitimacy of a sovereign contract remains and a diplomatic effort continues with Bangladeshi elite in order to maintain GCM's interests. Most likely, the elite recognises Bangladesh's need to develop its national resources to mitigate the severe power shortages that frequently cripple whole areas. Negotiations have stretched out, however, amid Bangladesh's fractured and inherently unstable political landscape. A breakdown in elections last year led to a military interim government; yet the company has always seen an interim government as offering a chance of progress as democratic politicians have feared loosing popularity over Phulbari.


Breakthrough

There is speculation, accounting for a couple of spikes in the share price chart this year, that GCM is poised to achieve a breakthrough. This contrasts with the Bangladeshi press, which continues to voice nationalist objections, preferring that Bangladesh should take the initiative itself with its resources. Manifestly, it cannot.

I stress the high risks, which will continue in terms of re-locating people and the inherent risks of mining, even if Bangladesh's nascent coal policy allows room for GCM. The shares' risk/reward profile is nevertheless interesting. At end-2006, the balance sheet showed 23.5m cash equating to 48p per share, as a result of an earlier share issue to develop Phulbari. Nearly 1m has since been applied to raise GCM's stake in AIM-listed GVM Metals to 10.3%, however, a substantial cash under-pinning remains. GCM's balance sheet ascribes 19.8m of intangible value to its fixed assets, representing 40.5p per share, which the stockmarket may not wholly respect if it comes to the crunch. But, at about 120p currently, the downside may be roughly 40% compared with scope for the shares to multiply if Phulbari can proceed on economically worthwhile terms. This explains why leading hedge funds such as RAB Capital and Children's Investment Fund respectively hold 15% and 11% of GCM.

It has been alleged that last summer's opposition to Phulbari was whipped up and financed by rival financial vested interests. Certainly, there is much to gain for whoever can successfully develop this coal asset. I am inclined to think, however, that long-term success will require a partnered approach by the operator and government, to assure local people they have a genuine interest in seeing a mine and power station flourish; otherwise the project will remain prone to sabotage.

GCM appears to be trying its best as a responsible stakeholder in Bangladeshi interests. Last January, it invested 2.5m in Peoples Telecom and Information Services Ltd, which should provide significant benefits to the Phulbari coal project by ensuring modern telecoms over the area involved for production and transportation of coal. Its overall objective is to provide quality voice and data services across Bangladesh.


Collaboration

Another possible factor is the influence of Mittal, the world's largest steel company currently looking to invest in Bangladesh. The Mittal family owns 8.4% of AIM-listed RAB Capital, which is GCM's largest shareholder. RAB itself has explored investing in other Bangladeshi companies. Given this activity and foreign direct investment now being a key issue for the future of Bangladesh, it would not be surprising to expect some collaboration going on here, in GCM's interests, besides high-level diplomacy.

Lastly, in terms of management confidence, it was interesting that in June, GCM's operations director exercised options on 25,000 shares at 75p and has retained them. Admittedly, this involves a modest financial sum for an international mining manager but, if he lacked confidence about Phulbari going ahead then logically, either he would have let the options lapse or taken a quick profit by selling shares.

So, GCM remains a high-risk situation, liable to remain volatile - one way or the other. But, it may be approaching a key moment in terms of Bangladesh's coal policy while the shares' risk/reward profile remains interesting. It will be worth reading carefully any announcement such as 'project updates' in the medium term; just be aware that with developing countries it is hard to be sure of timescales.

morning Smiler, good article on iii website about GCM. I think it sums up the history and current position well.

http://www.iii.co.uk/articles/articledisplay.jsp?section=ShareDealing&article_id=7400069

Snap !! bit of a slow week !

:-)

http://www.energybangla.com/article_det.asp?aId=643

I like this bit !!!!


"Anyway if we want to benefit from our coal resource we must allow the signed contracts to GO AHEAD and approve a pro Bangladesh , pro investment , bankable coal policy."

the gud
news should be finaly out now,i reckon we'll get sum major buys this week,,cos i knw im gunno at these levels.then no more then another couple of weeks we'll get the official thumbs up......

Well if it comes off well worth waiting for !!

RNS Number:6194C
Global Coal Management PLC
22 August 2007

Global Coal Management plc

("the Company")


Notification of significant holding



Under the FSA Disclosure and Transparency rules DTR 5, the following information
falls to be disclosed:

The Company was notified on 21 August 2007 that Ospraie Management LLC and its
subsidiary companies have an interest in the shares of the Company resulting in
a total holding of 1,511,055 Ordinary Shares of 10p each in the Company. This
represents 3.10% of the issued share capital of the Company.




22 August 2007

Morning all. Morning Smiler.

According to the website Ospraie had a holding of 1,646,436 (3.38%) in February 2007 but reduced to below the 3% notification threshold in March 2007. I believe this latest announcement must be a notification of an addition to their holding.

still waiting for the big one !!

http://www.energybangla.com/article_det.asp?aId=667

"For Phulbari mine at least the surface mining is the best option."

Bangladesh gov't drafting comprehensive plan to raise power supply
+ - 14:30, August 28, 2007


Bangladesh's power department is drafting a comprehensive plan to increase power supply in the country by exploring all possible avenues to meet the mounting demand for electricity.

"Installing new coal-fired power plants, importing electricity from power-surplus neighboring countries and setting up a nuclear power plant are among the prime options," a senior official of Power Division was quoted Tuesday by local newspaper the Financial Express as saying.

He said cross-border exchange of electricity during off-peak and peak hours and establishing joint venture power plant projects with the neighboring countries are also in the planned strategy of the division under the Ministry of Power, Energy and Mineral Resources.

The potencies of renewable energy such as solar power, wind power and power generation from solid wastes would also be explored to enhance electricity generation, the power division official said.

Sources said the power division has initiated the plan as the uncertainty of getting natural gas for generating electricity looms large. Besides, the Energy and Mineral Resources Division has already stated its inability to provide natural gas to new power plants beyond 2011.

Currently more than 80 percent of the country's power plants are gas-fired. By 2010 a good number of new gas-fired power plants are planned for installation by the power division.

Bangladesh has been experiencing the severe power crisis in past few months. According to data by the Asian development Bank, the per capita electricity generation in Bangladesh is among the lowest in the world. At present, only one-third of the households in the country have access to electricity.

Bangladesh: Rajshahi Mayors Agreement on Phulbari Coal Mine Illegal [ Print ]
Coal
EB Report , published 30/8/2007

Page [ 1 ]

The Law Ministry of Bangladesh has termed illegal the agreement signed a year ago between the Rajshahi City Mayor and the `National Committee for Protecting Oil, Gas and Mineral Resources on Asia Energys deal for Phulbari coal mine project.

There is no scope of using the Committees agreement as a reason to cancel the Asia Energy deal; it said referring to a legal opinion of the Attorney General.

Official sources said the Law Ministrys remarks came in reply to a number of queries from the Energy Ministry, which sought clarification about the status of the National Protection Committees agreement and also of the Asia Energy deal with the government.

After a vigorous agitation in Phulbari coal mine area, the Rajshahi City Corporation Mayor was forced to sign a Memorandum of Understanding (MoU) with the `National Protection Committee on

August 30, 2006.

One of the seven conditions of the agreement was that the government would cancel its deal with Asia Energy and also expel the company from the country.

Following the agreement, the Energy Ministry sought clarification from the Law Ministry regarding implementation of the agreement and also about the deal with the Asia Energy under which the UK-based company conducted a feasibility study at a cost of US$ 20 million.

The sources said the Law Ministry, after reviewing both the agreements, took the opinion of the Attorney General that the then political government in order to meet the emergent crisis in the particular locality, made arrangements as such.

The chief law officer of the government said: The Mayor, being a peoples representative, his legal status, legal authority may not be an issue. The said National (protection) Committee, on the other hand, it may be noted, does not seem to be a recognized legal entity.
He added: In the absence of proper papers, it cannot be ascertained if the said National Committee has been established by or under any authority of law. Its representative character does not seem to be quite clear. Having regard to the foregoing, so far as the legal status of the MOU is concerned, it appears that the MOU does not seem to have any force of law or any legal basis.

Regarding the Energy Ministrys query about cancellation of the Asia Energy deal, the Law Ministry said the Asia Energy was given approval for the feasibility study, not granted the mining license.

However, the Law Ministry said that if the government cancels the deal with Asia Energy, it has to follow certain procedures. But in such case, Asia Energy may chose to take the matter for international arbitration

http://www.energybangla.com/article_det.asp?aId=672

Bangladesh: No Gas for Eight Proposed Large & Medium Power Plants [ Print ]
power sector
EB Report , published 2/9/2007

Page [ 1 ]

By- Aminul Islam

The Power Division of Bangladesh is set to face a major setback in implementing at least eight large and medium power plant projects to generate a total of 1,700MW electricity as Petrobangla has informed the Power Development Board that it will not be possible to supply gas to the plants.

The country is likely to face an acute gas shortage by 2011 and with the current reserve of gas it will not be possible to supply gas to a number of proposed power plants, including the 450MW Meghnaghat-II independent power plant, Petrobangla chairman Sheikh Abdur Rashid informed the PDB in a letter last week.

The PDB earlier told Petrobangla that around 1,069 million cubic feet of gas per day would be needed to fuel 18 proposed government power plants with a total capacity of 3,825MW and five IPPs with 1,840MW capacity. The plants are schedule to come into operation by 20102012.

Petrobangla named at least eight power plants that would not get gas supply and advised the PDB to relocate two proposed 100MW rental power plants at Baghabari and Haripur to areas adjacent to gas fields.

The other plants which may not get gas supply include the 450MW Ashuganj power plant, 225MW Shikalbaha plant, 210MW Shiddhirganj second unit, 225MW Ghorashal plant, and 150MW Sylhet Gas Turbine.

Petrobangla informed the PDB that it would be possible to supply gas to around 14 proposed big and medium power plants, including four 450MW IPPs and the 360MW Haripur power plant, by 20102011 once Petrobangla completed installing two compressors at Ashuganj and Muchai by 2009 and gas transmission lines to Rajshahi and Khulna.

Apart from the eight power plants named above, Petrobangla will not be able to supply gas to the first phases of three other rental power plants 50MW Shikalbaha, 20MW Barabkunda, and 20MW Feni because of the gas crisis in Chittagong following a decline in production at Sangu gas field, Sheikh Abdur Rashid told the PDB.

He also said that Petrobangla could not guarantee gas supply for the second phases of three more rental power plants 50MW Comilla, 100MW Ashuganj and 200/100MW Meghnaghat if they were set up at the present proposed sites and advised the PDB to relocate them to near Koilashtila gas field and at Fenchuganj and Muchai.
Petrobangla confirmed availability of gas for four 450MW IPPs Sirajganj,

Bibiyana, MeghnaghatIII, and Bheramara and 90MW Fenchuganj and 240MW Shiddhirganj plants that are now under construction.

The other proposed power plants that will get gas include the 360MW Haripur plant funded by the Japan Bank of International Cooperation, the Asian Development Bank-funded 150MW Sirajganj and 150MW Khulna plants, the World Bank-funded 2X150MW Shiddhirganj plant, the Islamic Development Bank-funded 150MW Bhola, and the government-funded Sylhet 150MW combined plant and 150MW Shikalbaha, 150MW Chandpur and 210MW Khulna dual-fuel plants.

It will be a major setback for the power sector, if the eight big power plants could not be installed because of gas shortage, as the country is facing a huge power shortage, said a Power Division official, adding that the division planned to add more than 5,000MW power to the national grid by 2012.

Most of these power plants are on the list already submitted to the chief adviser so that we can complete the pre-tender paper work or the tender procedure before this interim government leaves office in 2008, he said.

Petrobangla officials, however, said that they were not informed about a number of power plants as the PDB planned those projects on its own, without consulting Petrobangla.
We are following our gas sector master plan. The PDB has chalked out a number of power plants, like the 450MW Bibiyana independent power plant, in contradiction with the master plan.

They recently also have planned 300MW rental power plants which are not in the power sector master plan as well, said a Petrobangla official

The Power Division in 2006 struck an agreement with a consortium to set up the Meghnaghat-II power plant, one of the plants that according to Petrobangla will not get gas supply, officials of the division said.

Although the agreement with the consortium will be scrapped as it has failed to install the plant in time, the division plans to invite fresh tender for setting up the plant. Petrobangla had given us commitment to supply gas to Meghnaghat-II, said an official.

Besides, the government has already discussed the funding of 210MW Shiddhirganj power plant with Russia and 225MW Shikalbaha with the Kuwait Fund and the 450MW Ashuganj plant is supposed to be set up by Japanese buyers credit. We have got assurance from these countries of funding to set up the plants, the official added.

He said they would further discuss with Energy Division about the availability of gas for the power plants. They have to prioritise gas supply and the power sector should get top priority.
Petrobangla officials said it would not be possible to supply gas to the proposed Ashuganj and Ghorashal power plants as it would result in a severe gas crisis in the capital.

About the Meghnaghat-II plant, they said Petrobangla would be able to supply gas to only one of the two 450MW plants at Meghnaghat.
A Petrobangla high official said they would be able to supply gas to the proposed power plants if any new gas fields were discovered in the country. At present power plants consume 40 per cent of the 1,6601,690mmcfd of the Petrobangla gas.