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/

"

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.

Crisis: Bangladesh: Power Generation Going Nowhere
[ Print ]
power sector
EB Report
published 3/9/2007


"In the meantime the coal mining must be given go ahead. Wherever, possible open pit mining method should be adopted without any fuss. We may need to plan setting up at least 1000 MW coal based power plants in the next 5years."

"We appeal to CTG to take immediate actions on Coal mining. The so called civil society creating noise made the policy makers confused. The country is suffering from gas, coal crisis to make this available for power generation."

"We want to see some positive actions. We want that the CTG initiatives are taken in a proper and pragmatic way. Continued power generation crisis may not be pleasant for any one.PDB and Petrobangla please stop blame game. We are in crisis, we need intergraded action plan to manage crisis."


http://www.energybangla.com/article_det.asp?aId=683

RNS Number:2075D
Global Coal Management PLC
03 September 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 31 August 2007 that Argos Greater Europe Fund has an
interest in the shares of the Company resulting in a total holding of 1,490,000
Ordinary Shares in the Company. This represents 3.05% of the issued share
capital of the Company.

Lets hope they get the go-ahead soon !! then sit back and watch this share go !!!

looks to be going already!

hello cynic...... this has been a political nightmare... still IF this get's the go-ahead could see a good return Just like oxs !!!

Coal policy not to ban any mining
method to keep options open
Staff Correspondent

The advisory committee, formed to finalise the draft coal policy, has decided in principle that the policy would not recommend or ban any particular mining method to keep options open for both open-pit and underground mining in the country.
The committee, headed by former BUET vice-chancellor Abdul Matin Patwari, at a meeting on Monday evening reviewed recommendations of different rights group and professionals including the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port and the Citizens Commission of the Bangladesh Economic Association.
The committee, however, did not agree in principle with the recommendations of the oil and gas committee and economic association, which were submitted recently, to drop the open-pit mining method from the coal policy.
The groups demanded that the open-pit mining method should be dropped from the policy as it would pollute the environment, oust thousands of people from their homesteads and destroy fertile farmland that produces three rice crops in a year.
The advisory committee also shared the view of the two groups that no coal export should be allowed from the country to ensure the energy security of the coming generations.
We should not recommend or ban any mining method in the policy as the method should be fixed on the basis technical, social, environmental and economic aspects. If it is found that open-pit mining is not viable after analysing the costs and benefits, it is natural that no one will want to engage in open-pit mining, Patwari told the meeting.
Other members present at the meeting included University Grants Commission chairman and environmentalist Nazrul Islam, Dhaka University terachers Badrul Imam and Mustafizur Rahman and Petrobangla director Maqbul-E-Elahi, all of whom echoed Patwaris view.
Five other committee members were not present at the meeting. Patwari, based on the estimate of the requirement for coal in the country for power generation, observed that if the country adopts only underground mining system, the extracted coal would be fully consumed even before 2025 although the government wanted to ensure energy security for 50 years.
He told the meeting that the oil and gas committees convener, Sheikh Shahidullah, recommended that the country should immediately go for underground mining in all coal-fields and after 20 years, if it is found viable, the country could go for open-pit mining after developing its own technical manpower.
So, Mr Shahidullah has not ruled out open-pit mining forever, he said.
As per the estimate of the framers of the draft coal policy, around 235 million tonnes of coal can be extracted by underground mining from four coal-fields that have a combined reserve of around 1,168 million tonnes.
On the other hand, around 1,050 tonnes of coal could be extracted by open-pit mining.
As per the power sector master plan, the country will need 41,890 megawatts of electricity by 2025 if the growth rate is considered to be 8 per cent. The draft coal policy estimated that country would need around 450 million tonnes of coal by 2025 to generate around 32,837 megawatts of electricity and rest of the electricity would be generated by gas. By 2035, a total of 1,200 million tonnes of coal will be needed if no new power plants are set up after 2025.
Professor Badrul Imam, however, told the meeting that even if the open-pit mining method is allowed in the country, it would be impossible to operate more than one open-pit mine as countrys coal reserve is situated in only two districts.
The committee members will visit Barapukuria, Phulbari and Dighipara coal-fields on September 11-12 before starting to review thoroughly the draft of the coal policy submitted by the energy division.