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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Bangladesh: Ice Starts to Melt [ Print ]
Something to say
EB Report , published 8/10/2007

Page [ 1 ]

By-Khondkar.A.Saleque

Finally the ice tends to melt. Bangladesh Government has seriously started thinking about coal mining, announced its intention to give positive thought about the stalled Phulbari Project for which Bangladesh a contract has with Asia Energy Corporation. They carried out extensive survey and exploratory works. They submitted a development plan and was due to get some response as early as early 2006.Bangladesh government defaulted. Rather it allowed some people to fan up agitation by poor and innocent villagers spreading wrong propaganda. These led to unfortunate incidents. Some innocent lives were lost. Unimaginative Government failed to manage the situation. Rajshahi mayor signed a controversial agreement with Gas, Port, and Electricity protection committee. The mining activities got stalled. Government failed to break the dead lock in about two years. The situation triggered very wrong signal to investor community.

Now development partner Asia Development Bank (ADB) has indicated its intention to support the project. Energy advisor has announced that in recent times there has been some positive development in the discussion with AEC. Law ministry has also opined that the agreement signed between Mayor Rajshahi City Corporation and the so called OIL, Gas and Port protection committee which spearheaded the campaign and agitation against AEC and more specifically against the surface mining method has no legal bearing. Energy advisor has also indicated that the decision about Phulbari project and coal mining in other places may be taken after approval of coal policy which is at the final stage. Experts believe that any policy passed post signing of a contract can not have any impact unless the provision is kept in the contract. It is also learnt that the policy may be finalized within November and may be approved by December 07.Well we are hearing this since July. Now we hope it will happen in December.


It goes without saying that Bangladesh required coal mining to happen in the most economic way few years back keeping in view the rapidly dwindling gas supply situation. We neither approached it with positive intent nor took aggressive actions for exploration for gas. Now we have situation where security of supply of gas grid is not expected to be ensured before 2010 at the earliest. Coal for commercial use may also not be available before 2011.What will happen to our gas based economy in the meantime. The agitators who preached all illogical myths and ill conceived propaganda have made serious dent to our energy security. It is ridiculous to think that we have our fortune lying below the ground and we are struggling to produce electricity, industrial output is suffering, investors getting wrong signal. The fortune seekers are feasting through import of poor quality coal from India through legal and illegal means. The so called agitators intentionally or unintentionally played to the hand of the energy mafias and have made major contribution in creating the present diabolic situation of energy.

In the current time of IT boom it is not difficult at all to know about the details of mining methods and their applicability in specific circumstances. We can very easily find out what suits our geography, our geology. Modern mining methods ensure surface mining in the most environment friendly manner. For shallow coal seam it is a proven technology to recover about 95% of coal in place without causing any major harm to environment. It is safe and less costly. Now that ADB is showing interest we may be assured of strict environmental control and involuntary resettlement of the affected people. It can not support any project which does not prove strict Environmental Management control and takes appropriate care of involuntary resettlement. We learned all these while on training at Manila based ADB headquarter. So it is from practical experience.


It is true some people will loose some cultivable land for sometime .The mine area will be progressively reinstated like for like or even better till the last pit is reached which will become a lake of sweet water. The water pumped prior to excavation may be properly used in irrigation. But if they are properly rehabilitated in satellite towns having access to modern amenities of life why should we be so concerned. Do we want the children of poor farmers there to keep on farming? Should not they be offered better opportunity for quality education, better medical care, crop diversification, better job opportunities? Will request EMRD secretary to send some of the persons he relies upon as experts to witness some surface mining in whichever country they want .They can see for themselves how surface and surface water management are so efficiently done. That will remove their imaginary myths. If the environmental issues, resettlement matters are properly taken care and water management is professionally done we must have any concern against surface mining wherever other technical circumstances support. The adjacent area of coal zone every year suffers from Monga around this time of the year. The mine developer must arrange employment for these people along with those directly affected .Once the mining starts the support infrastructures will definitely create job opportunities. Wonder what our so called agitators have done so far for our poor Monga affected poor people. The author is confident if a popular voting is undertaken in Rangpoor and Dinajpoor area people will vote for immediate commencement of mining.

Other issues are export and royalty. Given the present and immediate future demand Bangladesh can not dream about coal export at the moment. WE need at least three to four medium to large capacity coal fired power plants to be setup soon to balance the huge deficit; we need coal for steel and other industries. Do not think one or two coal mines will have enough economic production to create exportable surplus after meeting this entire requirement. But we will definitely need to be more smart and patriotic in our borders. Our high quality coal may leak through porous borders. So we must not be concerned about export for a while. Royalty limit also has to be logical. Bangladesh will not be unique in coal production. We can always compare similar situation and circumstances. No illogical royalty limit will be workable. One very accomplished Bangladeshi turned Australian Citizen Dr. Nafis Ahmed will be available in Bangladesh for the entire month of October to stand beside his eldery parents following death of his sister. If Bangladesh government desires it can take his honest opinion. He is a mining expert and is very respected personality in mining world. His wife Farjana also worked in reputed Australian mining company in Australia. Now she works in ADB at Manila. Energy advisor may take opinion of the couple. We must not remain on ideas and thoughts of persons who do not have first hand knowledge of mining.
We must not delay. We must start mining. All the coal mines may not support surface mining. We may need properly engineered underground mining for some; we may also explore coal bed methane in some mines. We should also think about coal gasification. One of our South African Colleague working here and living with us in the Flinders village worked with Sasol. He always talks about coal liquefaction. Bangladesh must start thinking about these to expand our utilization options. Bangladesh should also encourage sponge iron industry .We should also keep an eye on Clean Coal technology as something in the future the global warming emanating from greenhouse gas emission due to burning of coal will limit coal based power generation option.

Once the ice has started to melt it will start to roll down the slope to beautify the hinter land in not so distant future .Politics must not prevail over economics. We should not be carried away by wild unreasonable politics without bothering the overall economic benefit of the nation. Bangladesh desperately needs coal for fuelling its energy generation. We are in deep crisis .Destructive and unimaginative politics have taken lot of toll. The gap between demand and supply of energy have widened progressively. We have save our industry and commerce from the verge of ruins. A developing country like Bangladesh can not move without dynamic energy supply situation where the energy basket is diverse, where the countrys own resource is exploited to its full potential. We need aggressive energy resource harnessing. Canceling AEC contract at this stage will be self destructive. Will trigger wrong signal to world community of investors. It will be far more prudent if we can tighten some loose knots of the contract through discussion. Let us hope for the best

Asian Development Bank Shows Interest In Funding Global Coals Phulbari Coal Mine Project

By TC Malhotra

After a gap of over a year, Global Coal Managements Phulbari coal mine in Bangladesh seems to getting some momentum with the news that the Asian Development Bank, one of Bangladesh's major development partners, has shown interest in financing the project. A high level ADB team visited Dhaka in the first week of October, to discuss its support for the country's energy sector, and has offered to extend all kinds of financial support for implementing Phulbari which has been stalled for some time as a result of local protests.

"We have both public and private-sector windows we are interested to provide both technical and financial supports and our support should be extended on the basis of the requirement of the project," Kurio Senga, ADB's Director General of the South Asia Department, was quoted by media reports as saying. Senga said that they have been very much satisfied to see that the Bangladesh government is serious about the Phulbari project. Further, he said that the advisors of the caretaker government are looking closely into the matter and a committee is working to prepare the coal policy, which comprises experts, civil-society members and journalists as well.

"Whatever the outcome from the committee, we'll be guided by it to extend our support to implement the project," he said. He observed that the government did not suspend the project but they were taking time to make a decision.

The project has been stalled since August last year following agitation by the anti-open-pit campaigners. It may be recalled that AIM listed Asia Energy conducted a feasibility study and submitted a development scheme under an agreement with government to develop the Phulbari project with open-pit mining methodology. Since then Asia Energy has been subsumed into Global Coal Management and the scheme is still with the government awaiting approval.

After a meeting with the visiting ADB delegation, Bangladesh Finance Adviser Mirza Azizul Islam told the media that coal mining company Asia Energy, which still holds the licence, has expressed its willingness to re-negotiate terms of its contract with the government, but he said that before this re-negotiation the government must decide which contractual terms should be revised. Energy Advisor Tapan Chowdhury admitted that the Asia Energy has given a "soft" proposal for implementing the project, but any negotiation will start on the basis of the new coal policy after it is approved.

Bangladesh doesnt have a long history of coal exploration and available information suggests that Australias BHP was awarded a mineral exploration licence in August 1994 for the north western part of the country. This exploration licence was later assigned by BHP to Asia Energy in 1998 who conducted seismic and drilling operations and estimated a resource 572 million ton of bituminous coal at a depth ranging from 400 feet to 800 feet. On the basis of the field exploration and then evaluation by different groups of consultants, Asia Energy submitted its plan for open- pit mining of Phulbari coal.

But Asia Energys suggestion for open-pit mining methodology started a debate in Bangladesh, which later turned into a protest wave because local people and NGOs fear that use of this methodology would require displacement of more than 470,000 people of Phulbari, Nababganj, Birampur and Parbatipur upazilas, including 8,000 of the indigenous communities. Asia Energy however, predicts the number displaced to be around 50,000. Local NGOs demanded cancellation of the Phulbari coal extraction treaty with the Asia Energy despite the benefits it would bring in terms of jobs and power.

Bangladesh has small coal reserves, and has consumed little coal in the past. Commercial coal production, in fact, did not start until April 2003 with the opening of the Barapukuria coal mine, which is expected to produce one million tonnes of coal per year, principally for electricity generation. Bangladeshs Energy Ministry judges that the country has up to 2.7 billion short tons of high-quality coal reserves and the government has recently promoted the development of coal to ease its reliance on natural gas for power generation. These reserves have not been developed so far due to lack of domestic financing which is why the sector was opened to foreign bidding. A glimmer of hope for Global Coal Management, perhaps.

Global Coal Management PLC
19 October 2007

GLOBAL COAL MANAGEMENT PLC



DIRECTOR'S DEALING





Global Coal Management PLC ('the Company') wishes to advise that Mr. Gerard
Holden, non-executive chairman, and Mr. David Lenigas, a non-executive director
of the Company, have now increased their holdings through purchases of
ordinary shares.



Mr. Holden purchased 20,000 ordinary shares, at a price of 103p on 19 October
2007.



Mr. Holden now holds 46,666 ordinary shares in the Company, which represents
0.10% of the issued share capital of the company. He also continues to hold
200,000 options in the Company at an exercise price of 135p.



Mr. Lenigas purchased 10,000 ordinary shares, at a price of 100p per share and
10,000 ordinary shares, at a price of 102p on 18 October 2007 and 19 October
2007 respectively.



Mr. Lenigas now holds 190,000 ordinary shares in the Company, which represents
0.39% of the issued share capital of the Company. He also continues to hold
180,000 options in the Company at an exercise price of 75p.




19 October 2007

Dhaka, Tuesday October 23 2007



Committee members against export of coal as draft policy on the anvil


FE Report

A panel of experts tasked with finalising the much-debated coal policy has agreed 'conceptually' not to allow export of the mineral, keeping the country's long-term energy security in mind.

The committee members will, however, keep the policy sufficiently flexible, when it comes to the mining method-open pit or underground mining. Rather, it will be decided on the basis of individual cases, several committee members said.

"The policy is being redesigned keeping an eye on the country's energy security. That means exports can be allowed, if only surplus coal is available," a committee member said.

Since its formation, the advisory committee, headed by a former vice chancellor of Bangladesh University of Engineering and Technology (BUET) Abdul Matin Patwari, has had several rounds of meetings, but failed to give the final touch to the coal policy.

"It may require another four or five meetings to give it the final shape," the committee member told the FE Sunday.

He hinted that the policy would be finalised by the end of November.

Sources at the energy division said the government will establish a separate entity to develop and oversee the highly-potential multi-billion-dollar coal sector.

"It's crucial that the sector is developed in an efficient manner so that Bangladesh can attain the Millennium Development Goal," an expert maintained.

The draft policy, formulated by the energy division, has placed top priority on ensuring domestic energy security for at least 50 years and also kept the option of public sector investment in coal-mine development.

The draft has also made it clear that national interest will be given the top priority while attracting foreign direct investment in the coal sector.

"So far as development of the sector is concerned, the public sector will be given priority in the coal policy. However, the government can decide in favour of coal mine development by the private sector to avert any potential energy crisis and ensure energy security in future," the policy maintained.

But a committee member stated that the policy would have the option of public-private partnership for development of the coal sector.

Given the energy security, the policy notes that independent power producers must be encouraged to set up coal-based power stations in the vicinity of coal mines.

The committee members recently concluded a two-day site visit in the northern region on September 21-22 and had extensive talks with stakeholders, it has been learnt.

The immediate past BNP-led alliance government had initiated a move to frame the first ever coal policy and revised it several times, but the issues of coal export, mining method, environment and licensing regime stood in the way of its approval.

In a circular issued on June 21, the present caretaker administration constituted the advisory committee to give their recommendations on the draft coal policy after necessary examination and scrutiny.

"UPSHOT:

-ADB on board
-Govt on board
-70p to +9 in 6 months in 2005
-Corrupt politicians jailed
-Ministry of law cannot cancel o'seas contracts
-Energy Minister in support of coal energy
-Gas runs out in 5 years
-Only new coal power fired stations to be built
-Media support now
-Locals on side
-RAB largest shareholder
-Mittal largest shareholder in RAB
-Mittal commits $2.9 Billion to Bangla Energy
-$300 million ring fenced for coal development
-Institutions still accumulating
-UK govt liasing with Bangla govt
-Bank finance ready
-Coal policy finalised BY THE END OF NOVEMBER
-1 a share now!?
-NPV now 94.5p
-NPV of project 35
-40% rise in coal prices since 2005

With luck 9 again soon ?????????

Bangladesh: Petrobangla to Develop Dighipara Coalfield [ Print ]
Coal
EB Report , published 23/10/2007

Page [ 1 ]

By- Golam Mustofa Sarowar

Petrobangla has been given the responsibility to develop Dighipara coal field in Dinajpur. A letter was given in this regard from the Energy Division. But Petrobangla has yet to receive the license since the countrys coal policy is still being drafted.



Energy Ministry has informed that if they get the license they might look for strategic partners or contractors for exploration and development of the field. A senior official of Energy Division said that although a number of foreign companies have shown interest in this coal field, the Government is reluctant to engage any foreign company.



Out of the five coal-fields that have been discovered in the country, coal extraction is being done only at Boropukuria. The other coal fields include - Phulbari Coal field which was awarded to Asia Energy, Khalashpur Coal and Jamalgang coal field. It should be mentioned that Jamalganj coalfield is situated deep underneath the land, thus it has failed to attract any interested companies to develop it.



Bangladesh has a coal reserve of about 2.5 billion tons in the five coal fields so far discovered, which is equivalent to 53 trillion cubic feet (tcf) of gas. This amount can sustain the countrys demand for about 50 years. On the other hand, the countrys total discovered gas reserve that can be mined is equal to 11 tcf.

Of particular interest was:

"It should be mentioned that Jamalganj coalfield is situated deep underneath the land, thus it has failed to attract any interested companies to develop it."

So that leaves Phulbari and Khalashpur as the only viable choices.

:-)

Tuesday, October 30, 2007 02:13 PM GMT+06:00

Point Counterpoint
The way forward
Zhu Xian And Sandeep Mahajan

Zhu Xian is World Bank Country Director. Sandeep Mahajan is lead author of Bangladesh: Strategy for Sustained Growth, and Senior Economist, South Asia Region, World Bank.

The important bits being:

" World Bank's Bangladesh: Strategy for Sustained Growth report, will require particular attention to: Addressing the burgeoning energy supply constraints;

"STRENGTHENING EXPORT COMPETITIVENESS; improving the skill levels of the labour force; and strengthening law and order."

"However, with the RMG sector now accounting for close to 75% of total exports, DIVERSIFICATION OF THE EXPORT BASE IS IMPORTANT." Coal? ;-)

"a COMMERCIALLY VIABLE ENERGY SECTOR that supports the economy's vast energy needs"

"A well-reasoned national strategy is needed to bring more balance and energy to urban development across the country."

"The fiscal situation is also under some stress due to the perennial problem of low tax mobilisation and the large losses incurred by the energy-sector state-owned enterprises (SOEs), mainly due to under-pricing of energy products in domestic markets, which also undermines the financial positions of the nationalised commercial banks (NCBs) that are directed to finance these losses. Accordingly, cost-reflective pricing of energy products and steadily improving tax mobilisation are needed."

"THE MOST SERIOUS AND IMMEDIATE OF THE INFRASTRUCTURE CONSTRAINTS IS THE WIDESPREAD AND GROWING SHORTAGE OF ELECTRICITY. With over $1.5 billion in new investment needed annually to build utility-scale plants that can catch up with demand"

Dependance on gas for power generation can be reduced by use of nuclear technology in coal resources deve: Tapan

Internet Edition. October 31, 2007, Updated: Bangladesh Time 12:00 AM

Adviser, Tapan Chowdhury in his inaugural speech emphasized on using nuclear technology in coal resources development in the country which will reduce the dependency solely on gas for power generation. To meet the growing energy demand, the coal resources of the country need to be developed in much BROADER scale. The govemment has attached significant IMPORTANCE on coal sector development. In the National Energy Policy, the coal is identified as IMPORTANT component in the primary energy mix.

S. M. Wahid-uz-Zaman, Secretary, Ministry of Science and Information & Communication Technology in his speech said that at present the country is relying on indigenous natural gas for 87 pc of electricity generation. However, the natural gas reserve is depleting faster than previously planned, and beyond 2015 it would be difficult to dedicate natural gas for new power plants. Currently, the country has coal-fired power plant of 250 MW capacity. To increase the share of electricity generation our coal resources NEED to be developed URGENTLY. He hoped that the training course will definitely expand the domain of nuclear technology in various fields including coal and mineral resources development.


http://nation.ittefaq.com/issues/2007/10/31/news0774.htm

Of Interest :

Australian coal prices reach record

By Angela Macdonald-Smith Bloomberg NewsPublished: October 30, 2007

SYDNEY: Energy coal prices at the port of Newcastle, Australia, the world's biggest export harbor for the fuel, rose 1.3 percent to a record on expectations of supply shortages in Asia and a disruption to deliveries from a Queensland State mine.

"It's the expectations that demand continues to outpace supply so the market is in deficit; it's about people's perceptions of what is around the corner," Rory Simington, a senior coal analyst at AME Mineral Economics in Sydney, said of the record price. "We're coming into a period of higher demand, winter is approaching, and people are wondering where the additional supply is going to come from."

Asia Energy keen for Dhaka nod on minePublished: Friday, 2 November, 2007, 01:36 AM Doha Time

DHAKA: London-based miner Asia Energy hopes Bangladesh will soon agree a coal policy that will give the company the green light for a $3bn investment in a major coal mine project, and it defended the planned open pit mine against criticism from environmentalists.
Asia Energy Corp (Bangladesh), wholly-owned by AIM-listed Global Coal Management Plc, said it was waiting for Bangladesh to finalise its policy on the proposed Phulbari mine as this would help tackle energy supply shortages.
The company submitted a plan to the Bangladesh government in 2005 to develop the mine at Phulbari, 350km northwest of Dhaka. The mine would produce 15mn tonnes of coal a year and bring in $7.8bn revenue to the state over its 30-year life, the company said.
We are disappointed over the unnecessary delay that is escalating the project cost, now at more than $3bn, Asia Energy CEO Gary Lye said in an interview yesterday, but he added: We are ready to start work any moment if the government gives the go ahead.
The project was put on hold a year ago - after the company had spent $34mn on site development and feasibility studies - after protests at the site by environmental groups triggered clashes between local residents and police, in which six people were killed and dozens injured.
The protesters said the Phulbari project would displace some 50,000 people and irreparably damage the environment. Several climate experts also supported the protests.
The project is economically, environmentally and socially sustainable, Lye countered. It will generate 17,000 jobs, add electricity to the national grid and produce up to 15mn tonnes of good quality thermal and semi-soft cooking coal a year.
The project will have a 30-year life and give $7.81bn in revenues, taxes and employee wages to the government, he said, adding Asia Energy would deliver coal at an average price of $55 per tonne.
Lye said his company would spend $300mn to resettle those affected by the mine, including building a new town in the Dinajpur district. No one will be relocated without proper resettlement, he said.
He said feasibility studies showed there was 572mn tonnes of high quality coal at the Phulbari project.
Asia Energy initially submitted plans to develop the mine and build a 500 MW coal-fired power plant alongside, at a total cost of $2.5bn.
Given Bangladeshs increasing demand for coal as it shifts to coal-fired power generation, Asia Energy proposed to expand capacity at the power plant in phases up to 1000 MW, pushing up its investment to $3bn.
Experts have said Bangladeshs gas reserves are running out fast, prompting the switch to coal. All future power plants after 2010 will be based on coal. The brick-making industry alone currently consumes around 3mn tonnes of coal a year.
Bangladesh has 13.54tn cubic feet of proven and recoverable gas but is likely to face a shortage by 2011. The countrys five coal-fields, including Phulbari, have current reserves of 2.55bn tonnes, officials have said.
Around 1mn tonnes of coal is needed each year to produce 250 MW of power. The current electricity shortage in the country is around 2,000 MW.
Energy officials say they expect the government to approve a coal policy soon, though there is no clear deadline. The policy could allow for surplus coal to be exported after reserves meet a 50-year demand requirement, an energy ministry official said.
Phulbari coal will also generate export earnings, and reduce, or even eliminate, imports of coal, Lye said.Reuters

Thanks for all this info, Smiler-o; very helpful.

; )

If they can agree a coal policy that will give the company the green light for a $3bn investment in a major coal mine project, I would think we would see a x5 in a short time ! and will not see this level again for a while, heres hoping :)

Case against Khaleda Zia meritless : ACC

Dhaka, Oct 26: Bangladesh Anti-Corruption Commission (ACC), in its preliminary inquiry, found the allegations against detained former Prime Minister Khaleda Zia regarding two graft cases have \'\'no merit\'\'.
The anti-graft body decided not to take into cognisance the charges against Khaleda Zia regarding the compensation for Magurchhara gas field blow-out and leasing out Phulbari coal zone to Asia Energy.

\'\'As enough documents and evidence were not found for preparing a first information report (FIR) against the former Prime minister, the inquiry officer in his report suggested not to proceed further in this regard,\'\' ACC Secretary Mukhles Ur Rahman at a press briefing at the ACC headquarters said yesterday.

ACC Deputy Assistant Director Farid Uddin Ahmed submitted the report before Eid-ul-Fitr, saying no evidence or information was found to prove the allegations brought against Khaleda, the Daily Star reported.

\'\'The commission does not proceed with allegations lacking merit,\'\' the ACC secretary added.

It was alleged that Khaleda played \'\'dubious\'\' roles in realising the compensation for the Magurchhara blow-out caused by negligence of US company Occidental in 1997 and leasing out Phulbari coal zone to Asia Energy. Her actions in these matters violated the law and the country incurred huge financial losses at the expense of benefiting a few individuals.

According to an investigation report on the Magurchhara blow-out, awarding of the gas blocks to Occidental itself was highly controversial. The blow-out on June 14, 1997 caused a loss of Tk 3,900 crore.

The ACC is also investigating into allegations of awarding gas fields to Niko Resources involving both the Bangladesh Nationalist Party Chairperson and Awami League Chief Sheikh Hasina. The commission is likely to publish the investigation report in November.



All positive news and things look to be falling in to place quickly now with luck :)

EnergyBangla today ........ Sounds like the policy will be non commital enough to allow mining method / Export to be negotiated within specific contracts. The way to go for me, sounds positive ....... I like the last paragraph ....

The national coal committee working on the draft coal policy Saturday said it would not suggest anything that goes against the country`s interest. It suggested a limited export of coal after ensuring the country`s 50 years energy security. It has left the issue of coal export to a future committee to be set up under the coal sector master plan, to be adopted soon.

The committee held a meeting Saturday to discuss some issues of the draft coal policy. As a huge investment is involved in coal sector the committee might suggest the government to consider the coal export issue prudently.

About the method for development of the coal field former BUET vice-chancellor Abdul Matin Patwari and president of the committee told the meeting that the mining method should match with the consumption requirement of the country`s coal industry.

The committee observed that the total amount of the country`s coal reserve is needed to produce electricity in future, as gas would be exhausted by 2015 if new discovery is not made. So it suggested not going for coal export against the interest of people as people are the real owner of the country`s natural resources. At the same time there should be some room for the investors who will develop the field.

`We want to make a level playing ground for the investors, which would be public-private and foreign company`, Patwary said.

The country`s renowned mining expert Md. Mosharrof Hussain, former chairman of Petrobangla told the meeting that both the open pit and underground method has some limitations. He suggested for underground mining in Barapukuria considering the geological factors such as layer of coal, water and other parameters, which are totally different in Barapukuria. Mosharrof urged the committee to go for open pit mining at Phulbari coal field as they found in Barapukuria underground mining method did not work properly.

http://www.thedailystar.net/story.php?nid=10350

Front Page
WB president defends conditional loans
Happy with govt's ongoing institutional reforms
Staff Correspondent

"World Bank (WB) President Robert Zoellick yesterday concluded his first trip to Bangladesh, justifying the bank's practice of attaching conditions to loans."

"Currently, the World Bank is the largest single lender to Bangladesh providing just below 50 percent of the country's development loans."

"Zoellick spoke to the government at length about prioritising the power sector, with the WB willing to put its weight and money behind a push to make large-scale investment in the sector to improve energy generation to support a growing Bangladeshi economy."

Exporting energy?
Forrest Cookson

At the end of 2007 Bangladesh faces two serious, but different, problems in the energy sector: first, a shortfall in the electricity generating capacity; second, a shortage of domestically produced fuels for firing the power plants.

The failure to provide the electricity generating plants is a consequence of the poor governance and greed of the four-party alliance government. The caretaker government is moving systematically to insure that there is sufficient generating capacity. This column examines the second problem, why the energy sector has failed to develop the fuel resources needed by the economy?

Bangladesh has significant coal and natural gas resources. Prospects for significantly larger discoveries of natural gas are very good but take time for exploration and development. Major coal reserves have been found. Tragically for the economy, neither of these resources has been developed to a level sufficient to satisfy the growing energy demands of the economy: the poorer western region of Bangladesh faces an acute shortage of energy; most of rural Bangladesh does not have access to electricity; most large industrial establishments prefer to generate their own electricity rather than rely on the PDB.

Within Bangladesh there have been significant discoveries of natural gas that have been exploited to fire electricity generating plants, as a feedstock for the production of urea, to provide a source of heat for industry and households, and to fuel vehicles using CNG.

A large part of energy consumption comes from natural gas. Geologists consistently report that there are promising prospects for discovering more gas fields. Yet the reality of today is that there is a shortage of gas and the future looks very bleak, with very limited ability to increase gas supply in the next decade.

How did this situation arise wherein a country rich in natural gas faces an acute shortage for the next several years? The answer is simple -- the refusal to export natural gas discourages exploration by the energy companies that have signed production sharing contracts. Why is this?

Suppose that there are two companies exploring for gas and by their exploration activities each identifies 4 TCF of gas. To carry out such exploration including exploratory drilling the company may incur costs of $100 million. If it fails to find gas, then it loses the money; if it finds gas then it wants to develop the gas and sell it. With both companies discovering gas, the government is unable to buy all of this gas. One of the companies may find itself delayed in developing the field. Both companies can figure this out and conclude that with the "no gas export" policy, it is not worthwhile to pursue exploration in an aggressive manner.

Is this a realistic description of what happens? Yes! The Bibiyana field was discovered but many years went by before it could be developed. Unocal's effort to export part of the field was denied; after that exploration efforts fell sharply. It is one thing to take the risk of failing to find the gas and it is another thing to not be allowed to sell gas that has been discovered.

It is easy then to understand the origin of the present gas shortage. The prohibition on exporting gas meant that there is a shortfall in new discoveries. The oil companies have minimum interest in Bangladesh, and Bapex does not have the financial resources to go forward.

However, it is important to determine the price paid to the holders of PSCs. The current price levels are too low; wholesale prices of natural gas in various world markets are in the range of $3.50-5.00 per thousand cubic feet and rising. In contrast, average prices under the PSC arrangements are $1.25-1.50. Petrobangla will have to allow these average prices to rise significantly, say to $2.50 (his means that the price is about $5.00).

The same policy dilemmas arise in establishing coal policy. There is much discussion of a ban on exports or a limit of exports to what is used domestically. There are several points related to these issues:

* If exports are not allowed then the rate of extraction of coal would be much lower; for an open pit mine the overburden that has to be removed is more or less independent of the rate of extraction. This means that a heavy initial investment is made regardless of the production level; developing the mine at 3 million metric tons per year rather than the 15 million would make the cost of coal about $20 higher for each metric ton. It would be cheaper for Bangladesh to import coal than pay so much.

* There is a large amount of coal in the Phulbari deposit that is suitable for coking and it would be silly to use this coal for power plants as its export price is much higher than for thermal coal.

* It takes time to develop the domestic uses, but with aggressive development during the next decade of coal fired power plants most of the coal can be used domestically. At first most of the coal would be exported, but gradually domestic demands would increase.

* The price of coal would be linked to the world price -- unlike natural gas there is an international market for coal providing reference prices. If there are low prices enforced on the domestic coal industry, the private sector will have difficulties in developing the resource. If the development is left to the government one should expect little to be achieved over the next few years. At current world prices, coal is cheaper for Bangladesh to use as a fuel than natural gas.

To manage the energy fuels achieving the necessary exploration, development, financing to supply the nation needed energy, two policies must be followed: exports allowed if the domestic energy companies do not want to purchase; and prices should follow international markets. Otherwise, the nation will face continuing energy shortages with consequent slower economic growth. Fear of exporting gas and coal is contributing to the slow growth of the economy.

http://www.thedailystar.net/story.php?nid=10534

The above two major works Coal policy &commencement of coal exploration and PSC third round must be finalized within 2007 by CTG for our mid and long term energy security.



More aggressive load management, vigorous monitoring of power generation and implementation of new contingency power projects are the requirements for managing the immediate energy needs. The fertilizer, diesel supply to farming regions must be vigorously monitored if necessary with help of army to ensure best possible utilization. We will have crisis .But we must not panic. We must tell the truth to be public. It has already become extremely difficult for the limited income section of the citizen to survive. Further rise in prices of essentials may create famine situation. The painstaking Bangladeshis are not finding light at the end of the tunnel.


http://www.energybangla.com/article_det.asp?aId=806

3 new power plants to generate 1350 MW
Staff Reporter

In his address, President Dhaka Chamber of Commerce and Industries (DCCI) Hossain Khalid advised the government authority to finalize National Coal Policy as early as possible.

"Finalisation of Coal Policy for effective extraction and utilization of domestic coal is vital. Our coal reserves, about 14,000million tons, equivalent to 37 TCF gas, could be vital for power generation," the President of DCCI stated. Moreover, he proposed to establish more coal fired power plants with involvement of local and foreign investments.

The Dhaka Chambers of Commerce and Industries (DCCI) and the Daily Star organised the RTD, which was presided over by the Editor of the Daily Star Mahfuz Anam.

On the occasion, Editor of the Daily Star Mahfuz Anam, Chairman Power Development Board Muhammad K Hyat Khan, Director Petrobangla Muhammad Muktadir Ali, Director Summit Power Touhidul Islam, Power Manager of Meghna Power Limited Reazul Haq presented keynote papers.


http://nation.ittefaq.com/issues/2007/11/12/news0823.htm

Published On: 2007-11-11
Front Page
The Daily Star Roundtable
Govt now plans power for 60pc population by 2010
Inaction on developing new plants in last few years lamented
Staff Correspondent

As of today, the production of electricity is heavily dependent on gas. The power sector consumes 40 percent of the gas extracted in the country. "The planning of future power plants should not depend on gas only. Or else, we will cause a gas shortage for other sectors," warned Muktadir Ali, director of Petrobangla.

The other sectors that rely on gas are fertilizer manufacturers (18 percent), industry (14 percent), companies producing captive power (12 percent), domestic usage (12 percent), production of compressed natural gas (CNG) for vehicles (2.5 percent) and tea estates and commercial consumers, the Petrobangla director said adding that the gas supply shortfall will begin from 2014 unless new discoveries are made.

Noting that the country has 3,000 million tons of coal, Muktadir said, "We should not depend on gas only. As an alternative, we should rely on coal."

Tawhidul Islam of Summit Power noted that huge investment is required every year to set up new power generation plants and distribution systems to deliver power to all. "Each year, we need to invest Tk 1600 crore alone in transmission and distribution."

Meghnaghat Globeleq Power plant manager Reazuddin Ahmed also put emphasis on diversifying the basic energy resources and use of coal. Since the installation of large power plants requires at least three years, the authorities now may start developing the plant sites to reduce the project implementation time.

Nazrul Islam, chief of financing agency IIFC was critical of the role of PDB as the "single buyer" of all power. He said allowing multiple buyers would ensure that the tendering processes are not slow or inefficient.

A representative from Centre for Policy Dialogue pointed out that last year, the country lost about 2 percent of its GDP due to power supply shortfall.

Associate Professor Syed Munir Khasru of Institute of Business Administration, University of Dhaka, pointed out that there is a lack of confidence among the bidders about transparency of power tenders. This has to be restored by punishing the corrupt quarters that had foiled past power tenders.

Asaduzzaman Khan of Bangladesh Institute of Development Studies (BIDS) said, "Coal must be tapped. Leaving coal underground is equivalent to not having any coal. If mining coal using open pit method is environmentally damaging, then let us take the appropriate measures and then tap the resource.


http://www.thedailystar.net/story.php?nid=11109

Global Coal Management PLC
16 November 2007




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