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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GCM Resources gets 175p/share preliminary offer from Polo Resources UPDATE

(Updating with Polo's comments)
LONDON (Thomson Financial) - GCM Resources Plc. said it has received a 175
pence a share preliminary cash offer from shareholder Polo Resources Ltd.
GCM Resources said talks are at a preliminary stage and there is no
certainty an offer will be made.
Separately, Polo Resources, which owns 29.7 percent of GCM Resources,
confirmed the approach but said it would need to raise financing for a deal to
proceed.
Polo Resources said should it agree a deal, it would seek shareholder
approval to change its name to GCM Resources Ltd.

-----------------------------------------------------------------------------

RNS Number : 9422U
GCM Resources PLC
21 May 2008


21 May 2008

PRESS RELEASE

GCM Resources plc

GCM RESOURCES PLC ACQUIRES 13% IN AURA ENERGY LIMITED


GCM Resources plc ('GCM or the Company') (AIM: GCM), is pleased to announce that it has subscribed for 5,586,975 shares, representing 13% of the enlarged share capital of Aura Energy Limited ('Aura') (ASX: AEE), at A$0.29 a share. The total cost is A$1.62 million (790 thousand).

Aura is a uranium exploration company based in Perth, Western Australia which was listed on the Australian Stock Exchange in May 2006. Aura has a portfolio of exploration titles which are being actively explored for calcrete-, shale- and sandstone-hosted uranium deposits.

The proceeds of the subscription will be utilised in the drilling and analysis work programme for Aura's Swedish properties plus the calcrete uranium projects in Western Australia. The other areas' work programmes are fully funded from internal funds or JV partners.

The Aura / GCM Africa Alliance has already been actively pursuing opportunities in Mauritania and Niger. The Alliance now holds 3 granted licences for uranium exploration and has a further 11 applications for licences in Mauritania, plus 3 applications for licences pending in Niger.

GCM's involvement adds mining and technical expertise to the Aura exploration expertise to take the prospects forward to feasibility study and ultimately development. The West Africa Alliance has proven Aura is capable of securing exploration tenements and working within agreed budgets.

Steve Bywater, GCM's Chief Executive commented:

'GCM is pleased to announce this investment in Aura. These funds will help Aura to develop its mineralized properties in Sweden through further drilling plus continue its exploration programme with the calcrete uranium projects in Western Australia. This is an exciting opportunity for GCM as it looks to expand its portfolio of investments on a global basis.'

Aura's Managing Director, Dr Bob Beeson, said

'These funds will enable Aura to continue its aggressive exploration programmes at its 100% owned uranium projects. These include the shale-hosted uranium province and high grade vein systems in Sweden plus the calcrete uranium projects in Western Australia. Aura has been particularly active in the past 12 months, with substantial activities on three continents. The Aura/GCM Alliance announced it has located uranium mineralization in its newly awarded licences in Mauritania, on 7 May 2008.'

Dhaka, Tuesday May 20 2008



Power division seeks record fund to add more plants in next fiscal


Shakhawat Hossain

Power division has sought a record Tk 46.78 billion for its development expenditure in the next fiscal, aiming at 10 per cent higher electricity generation and cutting system loss below 20 per cent, officials said on Monday.

The amount is 44.4 per cent higher than the revised government allocation for the power division in the outgoing fiscal when it added less than 100 megawatt (mw) in the national grid, a finance ministry official said.

The power division in its budgetary proposals said it would utilise the fund to implement the construction of 10 small power plants, 300 mw short-term rental and a 160 mw 15-year-long rental power plants.

A substantial amount of the next fiscal's allocation would be spent on 240 mw Siddhirganj and 150 mw Sikalbaha peaking power plants.

The power division said successful implementation of the projects will push up the existing electricity generation capacity by at least 500 megawatt in 2008-9 fiscal, boosting economic growth and creating thousands of new jobs.

Officials said the increased allocation would be the highest in the country's history, as the caretaker government has made power generation its top priority in its development outlay for the next fiscal.

"The government wants to reverse abysmal situation in the power sector," said a power division official, referring to lack of investment in new power plants during the previous Bangladesh Nationalist Party (BNP)-led government.

The BNP-led coalition government could manage to add only around 250 mw electricity in its five-year tenure despite spending a whopping Tk 157.60 billion in power projects during the period, he added.

The country's electricity generation capacity remained almost static at average 3500 mw between 2002 and 2006 although rapid industrialisation saw electricity demand increase at an average 10 per cent annually in the last five years.

The country has been facing shortage of an 800-1500-mw power a day since the beginning of the summer as electricity generation remained flat at around 3300-3700mw against a demand of 4500-5000mw.

Lack of new plants aside, growing shortage of gas, frequent shut down and maintenance of the age-old power plants and creaky distribution system have also aggravated the power problem, officials said.

According to the World Bank, Bangladesh needs new generation of at least 500 mw power a year and an investment of at least US$10 billion till 2020 to catch up with growing supply shortfall.

Severe financial mismanagement, corruption, inefficient operation and lack of tariff adjustment have landed the country's power sector in such a mess, it said adding the country's power crisis would linger in the next few years.

As of 2005, the WB said the country's electricity generation per capita-- at about 155 kilowatt-hours (kwh)--is one of the lowest in the world.

Evening Smiler - been away on other business but back in contact again.

Will we reach 175p do you think?

yes could do ! Interesting times ahead !!

GCM diversifies with Aura stake purchase
21/05/2008


Coal mine developer GCM Resources has moved into uranium exploration in Sweden and Australia with the acquisition of a 13% stake in Perth-based Aura Energy.

GCM, which currently develops coal mines in Bangladesh and South Africa, has subscribed for 5.6m shares in Aura for a total of 790,000. Aura will use the funds for drilling and analysis work in Sweden and at projects in Western Australia.

"These funds will help Aura to develop its mineralized properties in Sweden through further drilling plus continue its exploration programme with the calcrete uranium projects in Western Australia," GCM chief executive Steve Bywater said.

"This is an exciting opportunity for GCM as it looks to expand its portfolio of investments on a global basis."

Of Interest:

Coal to remain energy 'backbone'
From Herald News Services
Published: Wednesday, May 21, 2008
Coal, the world's fastest-growing source of energy, will remain a "backbone" of global power generation, bolstered by expanding demand in developing nations, the International Energy Agency said.

Coal generates about 30 per cent of power in the 27-nation European Union, according to Brussels-based lobby group Euracoal. That rises to more than half in the U.S. and about two-thirds in China. Growth will be fastest in developing nations outside the 30-member, Paris-based Organization for Economic Co-operation and Development, the IEA said.

"Coal will remain the backbone of our energy system, especially in power generation," Fatih Birol, chief economist of the IEA, told a McCloskey coal conference in Nice, France, on Tuesday.


Efforts by the EU to curb emissions blamed for global warming may be weakened by the expansion of power generation in nations such as China and India, Birol said.



Also :

As Oil Prices Rise, Nations Revive Coal Mining


http://www.nytimes.com/2008/05/22/business/worldbusiness/22mines.html?hp

Polo Resources says 'satisfied' with progress, 'confident' on growth prospects
AFX


LONDON (Thomson Financial) - Polo Resources Ltd. said reported its first pretax loss, but said it is 'satisfied' with its progress and remains 'confident' about future growth prospects.

For the period from May 23 to end-March, the natural resources investment company, reported a pretax loss of 809,000 pounds and operating loss of 1.18 million pounds.

Talking about its 175 pence a share preliminary cash offer for GCM Resources Plc., the company said the approach is subject to the arrangement of necessary funding.

This does not amount to a firm intention to make an offer and, accordingly, there can be no certainty that any offer will be made even if the necessary funding is arranged, Polo Resources added.

Of Interest:

Mittal sparks rush for coal resources

Buys 14.9% stake in Australia-based Macarthur Coal, eyes entire co


http://www.thehindubusinessline.com/2008/05/25/stories/2008052550480600.htm


Also ;

Coal prices jump towards $US140
Email Print Normal font Large font AdvertisementMay 26, 2008 - 6:32PM

Australian thermal coal prices, a benchmark for Asia, rose to a 13-week high to top $US138 a tonne in the latest week, extending a three-week rally that was spurred by strong global demand amid high oil prices.

pretty obviously heating up on the ground.

http://www.thedailystar.net/story.php?nid=38380

Phulbari Coalmine
Govt warned of slide in law, order situation
Advised to suspend Asia Energy activities
Sharier Khan


An intelligence agency in a special report has suggested that the government temporarily suspend all direct or indirect activities of Asia Energy to avert severe deterioration in law and order around Phulbari coalmine.

In a report to the energy ministry, the home ministry has referred to a special report of the intelligence agency saying that in order to avoid such a situation, the government must formulate a policy on Phulbari coalmine that is acceptable to all considering national and local interest and on the basis of open discussion at national level.

The report also suggested that the government should motivate all local people in favour of the coalmine.

Sources say the energy ministry on May 15 reviewed the report and observed that Asia Energy has not been given any lease to develop Phulbari mine and the government has not taken any decision on open cut or underground mining.

Decisions on these matters may be taken after the draft coal policy is finalised.

The process to frame the coal policy was initiated by the energy ministry since August 2005. This process slowed down apparently due to disputes surrounding the proposed Phulbari coalmine and Asia Energy.

The ministry also felt that the Bureau of Mineral Development (BMD) should ask Asia Energy to refrain from all activities under its own name or other names.

Later, the ministry decided not to say anything to Asia Energy.

Asia Energy's activities in Phulbari came to a halt following violent protests, in which six people were killed in August 2006.

The protests were organised by the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port. The key factor of the protests included fear of displacement of more than 200,000 people and losing huge arable land.

After the Phulbari protests, the government officially did not say anything to Asia Energy, while the British company routinely filed applications enquiring about the status of its proposal for the mine.

On March 7, 2007, the BMD wrote to Asia Energy for the first time saying the company would have to wait till the coal policy is finalised. The BMD sent a second letter on November 5 reiterating the same position.

Though Asia Energy made a visible presence in 2002, it did not draw national attention till it submitted a feasibility study and a scheme of development in 2005.

The company in its study shows the mine has 572 million tonnes of high quality coal and 90 percent of it can be extracted through an open pit mine.

Asia Energy's proposals included building a 500MW coal-fired power plant at mine site at an estimated cost of $476 million.

The company was scheduled to start the mine development from late 2006 with first coal in 2008. Full production was expected to be achieved by 2013.

Asia Energy entered the coal mining scenario in 1998 by buying the mining contract originally given to international coal giant BHP on August 20, 1994.

Supporters of National Committee to Protect Oil, Gas, Mineral Resources, Power and Port say Asia Energy was given the exploration licence unfairly by compromising national interest. They add that the company had no mining experience and that open pit mining will harm the environment.

Petrobangla experts however differ with the Committee, especially on the question of open pit mining, saying Bangladesh lacks energy security and its coal can provide a great solution.

Sixteen million tonnes of coal can generate 5,000MW power for one year. Coal can also be transformed into synthetic petroleum and a host of other useful chemicals.

The Asia Energy debate is holding back all decisions regarding other prospective coalmines.

May 28, 2008

Dattels makes move on GCM

The Government of Bangladesh could be on the verge of giving the go-ahead to open-cast coal mining two years after violent protests over the planned displacement of 40,000 people led to the suspension of mining licences.

That, at least, is the belief of Stephen Dattels, founding chairman of Polo Resources. Mr Dattels yesterday offered 175p a share for GCM Resources, down 1p at 159p, which has the rights to mine 570 million tonnes of coking coal in the Phulbari region.

GCM, formerly Asia Energy, has never recovered from the 60 per cent share price fall it suffered in August 2006 in the wake of the protests, which left five people dead.

However, as Bangladeshs economy has teetered on the brink of collapse, the Government is believed to have told Tata Power that a decision on its coal policy will come next month. If so some shareholders believe that Mr Dattels offer is low. GCMs stakes in other companies such as Coal of Africa, up 8p at 193p, are worth some 130p a share alone. In April someone bought a 4 per cent stake via Credit Suisse.

http://business.timesonline.co.uk/tol/business/markets/article4016871.ece

Of Interest:

Coking Coal Forecasts Raised 50% by UBS on Constrained Supply

By Gavin Evans

May 28 (Bloomberg) -- Coking coal prices may rise 50 percent more than forecast next year on rising steel production and slow output growth from mines in Australia and Canada, according to UBS AG.

The price of hard coking coal, used to make steel, may increase to $300 a metric ton for the Japanese financial year beginning April 1, 2009, UBS said yesterday in a report by analysts led by Glyn Lawcock. The previous forecast was $200 a ton. Estimates for thermal coal used in power generation rose 28 percent to $160 a ton.

Slow supply growth, following floods at mines in Australia's Queensland state earlier in the year, may leave the global coking coal market about 6 million tons short next year, Lawcock said. While China can generally meet the needs of its growing steel industry, any risks to thermal coal supply may limit rail capacity for other cargo, cutting coking coal exports and increasing imports by coastal steelmakers, he said.

``This could potentially push balances into a greater deficit than currently envisaged,'' Lawcock said.

Storms in China in February boosted demand for thermal coal and exposed bottlenecks in the nation's rail network for delivery the fuel. Thermal coal was given priority over other freight.

After a brief recovery, coal inventories at Chinese power stations are again declining and may tighten supply this summer, Lawcock said. At the same time, supplies from Vietnam are capped, exports from South Africa are contracting, and port and rail bottlenecks in Australia are also capping deliveries, he said.

Of Interest:

28 May 2008 12:53 PM London Time




More China power plants closed due to coal shortages
BEIJING: The amount of China's coal-fired power capacity shut down due to coal shortages increased 7 percent to 6.82 gigawatts in the four days to May 24, China's power watchdog said late on Monday.
On May 20, 6.37 gigawatts of capacity had been shut down as a result of coal shortages. China has 713 gigawatts of power generating capacity, of which coal-fired plants account for more than three quarters.

Meanwhile, coal stocks in power plants in central Anhui province fell to a level sufficient for only 3.1 days of generation, down from 3.7 days four days earlier, the State Electricity Regulatory Commission said. Beijing regards coal stocks of seven days' supply as a critical level.

Coal stocks in central Hunan also fell to 3.1 days from 3.4 days, but stocks in Hebei, which surrounds Beijing, recovered slightly to 5.7 days from 5.1 days and stockpiles in the east part of Inner Mongolia rose to 6.3 days from 4.4 days.

Source -The Economic Time

smiler..do you think they will be a t/o..it wouldent surprise me cos prl ,gcm r all in bed together so either way they will benifit.imo phulbari will get the greenlight and it looks like really soon now.but the million pound question is would it be under gcm..wyo

well good finish today ! makes that offer of 175 look a bit low ! if phulbari gets a green light its hold on tight !! Interesting next few weeks me thinks ! :)

http://in.reuters.com/article/domesticNews/idINDHA27074520080530

Bangladesh to adopt coal policy soon - official
Fri May 30, 2008 6:32pm IST Email | Print | Share| Single Page[-] Text [+]
DHAKA, May 30 (Reuters) - Bangladesh's army-backed interim government is hoping to finalise a long waited policy soon to extract the huge coal reserves to supplement fast depleting gas resources, a senior energy official said on Friday.

"To meet the energy demand we will have to use the coal resources," said M. Tamim, special aide to the head of the government responsible for power, energy and mineral resourses.

"I ask all to leave it (issue of coal extraction) to the experts, have trust in them," he said, responding to critics who oppose any deal with foreign companies to run the coal fields.

"Everything will be done on the basis of accountability and transparency," Tamim told a seminar on "Energy security and Development."

Bangladesh, a heavily populated South Asian country, faces a serious energy crisis, with lack of gas to produce electricity. The crisis is set to worsen by 2011 when its proven and recoverable gas reserves could run out.

As a result, attention is increasingly turning to the country's vast coal resource.

"The draft of the coal policy is soon to be placed before a cabinet meeting for approval," Tamim said.

Bangladesh now extract coal from just one of five fields with 2.55 billion tonnes, with technical assistance from a Chinese firm.

Energy officials say Bangladesh should adopt the coal policy quickly, to allow foreign firms to work on two large coal fields in the country's north at an early date.

The projects worth a total $6 billion have been put forward by Indian conglomerate Tata Group and Asia Energy Corporation (Bangladesh), a sister firm of UK-based GCM Resources PLC.

Both are pending as environment assessment and rights groups have continued to protest to force the government not to allow foreign investors in the coal sector.

The government, however, says it would carefully consider all issues and concerns before handing them over to any investor and that the coal policy will have provisions to protect local interests.

The interim government, headed by former central bank chief Fakhruddin Ahmed, took over in January 2007 and its tenure will end after parliamentary election planned for next December.

($1=68.55 taka) (Reporting by Ruma Paul; writing by Anis Ahmed; editing by James Jukwey)

RNS Number : 6683V
GCM Resources PLC
30 May 2008



Form TR-1 with annex. FSA Version 2.1 updated April 2007

For filings with the FSA include the annex

For filings with issuer exclude the annex

TR-1: Notifications of Major Interests in Shares

1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:

GCM Resources PLC

2. Reason for notification (yes/no)

An acquisition or disposal of voting rights
X

An acquisition or disposal of financial instruments which may result in the acquisition of shares already issued to which voting rights are attached

An event changing the breakdown of voting rights

Other (please specify):______________

3. Full name of person(s) subject to notification obligation:

Southpoint Capital Advisors LP

4. Full name of shareholder(s) (if different from 3):

Southpoint Master Fund LP

5. Date of transaction (and date on which the threshold is crossed or reached if different):

27 May 2008

6. Date on which issuer notified:

30 May 2008


7. Threshold(s) that is/are crossed or reached:

3%

Of Interest:
30 May 2008 06:16 PM London Time




Power Prices to Rise in Europe as Coal, Natural Gas Costs Surge
May 30 (Bloomberg) -- Electricity rates are set to rise in Europe, boosting utility sales and punishing consumers as prices fail to keep pace with the coal and natural gas used to fire power plants.
German prices for 2009 delivery will probably climb 10 percent by the end of this year to 82 euros ($127) per megawatt hour, according to UBS AG analyst Per Lekander. They advanced 12 percent last year.

As power increased, coal more than doubled in a year to $167 a ton from South Africa and natural gas in Britain almost tripled. Record energy costs led industrial customers including Wal-Mart Stores Inc., the world's biggest retailer, and Dutch airport operator Schiphol Group NV to plan to trade electricity directly on commodity exchanges to save money.

``European power is still cheap with current fuel prices,'' Daniel Dahlin, chief investment officer at hedge fund manager Electris Asset Management Ltd., said in an interview from Stockholm. ``The trend is pointing up.''

Oil futures more than doubled in a year to exceed $135 a barrel in New York, spurred by supply constraints and a weaker dollar and closed yesterday at $126.62 a barrel on the New York Mercantile Exchange. Coal jumped on Asian demand and a lack of ships.

German 2009 electricity advanced 20 percent this year to more than 75 euros a megawatt hour, according to broker GFI Group Inc. In addition to higher coal costs, emissions permits increased 18 percent in Europe, reducing profit from burning fossil fuels.

Margin Squeeze

The profit from running coal-fired plants including emissions costs, the so-called clean dark spread, plunged 66 percent this year to about 4 euros a megawatt hour, Bloomberg data show.

Sales from E.ON AG, Germany's biggest utility, are estimated by analysts to rise to almost 81 billion euros in 2009 from 69 billion last year, while revenue at Paris-based Electricite de France SA increases to almost 65 billion euros from about 60 billion in 2007, according to data compiled by Bloomberg.

A four-year rally drew banks and hedge funds to power markets where trading began in the 1990s. Volume in the seven biggest markets rose for a third year to a record in 2007, according to Prospex Research Ltd., a U.K.-based consultant that tracks trading.

Wal-Mart's Power4All Ltd. last month joined APX BV's U.K. exchange to buy power for its 356 Asda supermarkets. Trading may save 2 million pounds ($4 million) a year, Asda retail director Andy Clarke said.

Schiphol, Norsk Hydro

Amsterdam airport operator Schiphol will begin to trade on the European Energy Derivatives Exchange NV next year as supply agreements for 2009 and 2010 expire, spokeswoman Kathelijne Vermuelen said May 28 in an e-mail.

Rising bills are cutting earnings at Norsk Hydro ASA, the world's fourth biggest aluminum producer. Paper and chemicals makers are also being hurt, competing with companies that have access to cheaper electricity, said Daniel Cloquet, director of industrial affairs at the Confederation of European Business in Brussels. Power accounts for about 30 percent of Norsk Hydro's costs.

Higher electricity isn't exclusive to Europe. Power prices in the U.S., the world's biggest energy market, will likely rise as declining margins mean generators aren't adding enough supply to meet demand, said Michael Zenker, a Barclays Capital Inc. commodity analyst.

``They are not seeing any signs of urgency to add capacity regardless of whether it's needed in the market,'' he said from New York.

Power producers in the Midwest at gas-fired plants are losing money, Bloomberg data show. Prices need to be above $30 a megawatt hour to encourage new building, assuming the unit runs for 16 hours a day, Zenker said.

Record Prices

Floods and congestion at ports curtailed coal shipments from Australia, the world's biggest exporter. Delivery to Amsterdam, Rotterdam, and Antwerp for the next four years will stay above $154 a ton, futures contracts from ICAP Plc show.

``The rise in coal prices is probably here to stay,'' Dahlin of Electris said.

Coal fuels 40 percent of the world's electricity, according to the World Coal Institute.

A repeat of heatwaves in 2006, which forced producers to curb supplies in the summer, could push German next-year power to 80 euros by July, Chad Tschudi, portfolio manager at Prague-based utility CEZ AS, said in a May 22 interview.

Temperatures during June through August are likely to be above average for much of Europe, according to the U.K.'s Met Office.

For electricity, ``the buying interest, the appetite, is just ferocious,'' Tschudi said.

Source Bloomberg

Coal reserve enough to meet energy needs

Staff Reporter



Special Assistant to the Chief Adviser Prof M Tamim yesterday said the national coal policy has almost been finalised with a view to meeting energy shortage through development of the coal sector.

The draft coal policy would be sent to the Council of Advisers for its approval soon, he said.

Prof M Tamim was addressing a workshop on "Energy Security and Development: Perspective Bangladesh " in the city.

Bangladesh Institute of Law and International Affairs (BILLIA) and Bangladesh Heritage Foundation jointly organised the workshop at BILIA's seminar room. Prof Tamim said the Power, Energy and Mineral Resource Ministry has already finalised the coal polity, which was submitted by the committee for draft coal policy. The Coal Policy will be sent to the Law Ministry within 7- 10 days, he added.

He said our coal resources have to be developed to meet up the energy demand in the country.

He said there has to be a national consensus on the coal policy on the basis of experts' opinions and all should keep confidence in their opinions.

Dr Tamim said the country's existing coal reserve is enough to generate electricity to meet its growing demand.

Mentioning that 81 percent of the electricity is being produced with gas, he said the use of gas has to be reduced for the sake of energy security.

Dr Tamim said areas will have to be identified to give priority for gas use, "and only fertiliser factories, industries and CNG stations should get the priority".

"We are developing a policy paper to set up power plant jointly by public and private bodies, which in the government will have 51 per cent equity share," he informed.

He also said Petro Bangla now has huge foreign currency shortage and might fail to pay the International Oil Company's (IOC) bill of May 08 due to financial crisis.

After 10 years the Petro Bangla would face acute financial crisis due to providing high subsidy in gas supply.

Prof Izaj Hossain, Bangladesh University of Engineering and Technology and BD Rahmatullah, Director, Rural Electricity Board (REB) presented two separate keynote papers at the workshop chaired by Wali-ur Rahmand, Director, BILLIA and Chairman, Bangladesh Heritage Foundation.

Maj Gen Aminul Karim (ndc), Military Secretary to the President and Lt Col Moin Uddin, Instructor, Class-A, Engineering Department, Military Institute of Science and Technology (MIST), among others, addressed the function.

Prof Izaj said that the 81 per cent of coal is being extracted by the open-pit-mining system in India. Fulbari Coal Mine should be excavated by the open-pit-mining system, as only 20 to 30 per cent coal could be extracted by the closed-pit-mining system, he added.

Speakers at the workshop stressed on setting up of regional power grid sharing with neighbouring countries to face the power crisis of the country.

They said we should initiate negotiations with India-Bhutan and Nepal in order to achieve power security in Bangladesh.

Prof. Ajoy Ghose is a Mining Industry Consultant and Editor, Journal of Mines, Metal and Fuels, Indian Journal of Power and River Valley Development. This international expert recently came to Bangladesh to carry out a study for UNDP on Sustainable Energy Development of Bangladesh and the Role of Coal as an Alternative Energy Resource. He spoke to PROBE in an exclusive interview about the coal deposits at the Phulbari, the extraction process, prospects and more

Interviewed by ANWAR PARVEZ HALIM

You have come to carry out a study for UNDP on Bangladeshs energy resources. Can you tell our readers something about this?
I have been asked by UNDP to carry out a study here in Bangladesh. My study is on Sustainable Energy Development of Bangladesh and the Role of Coal as an Alternative Energy Resource. This entails a study on the energy situation of the country, what coal resources it has, how to mine and exploit these resources and so on.

What has your study on the Phulbari coal mine revealed? Could you tell us about the quantity and quality of coal there as well as other related factors?
I would say that the coal deposit at Phulbari is the jewel in the crown as far as Bangladeshs resource inventory is concerned. It has about 570 million tonnes of high volatile bituminous coal of very high quality. It also has some semi-soft cooking coal. It hasnt been possible to accurately evaluate this at present, but we can say with certainty that this is a huge deposit. In fact, Phulbari will easily be able to produce 15 million tonnes of coal every year.

Is there presence of any other valuable mineral in this mine?

I cant really accurately say anything about this. There is silica sand and China clay in the top layer of coal at the Phulbari mine. These are much costlier than coal. Then again there is pure drinking water, most critical resource in todays world.

What would be the most profitable manner for Bangladesh to extract this coal and do you think we have the technical capability and know-how to do so?
Bangladesh has more than enough expertise in geology and mining. But coal extraction calls for massive investment. It will not be possible for you all to make such a huge investment in a project like Phulbari. This will call for foreign investment. It will not be possible without a foreign company.
How profitable will that be?
All developing countries are growing through direct foreign investment. In India we are inviting direct foreign investment. Foreign companies are investing and our economy is benefitting. Bangladesh should do the same.
It is being said that the coal at Phulbari will be extracted through the open mine pit method. The local people are apprehensive of huge environmental damage and are in a movement against this. What would you suggest as being the best method of mining here?
This is a very sensitive matter. The civil society is always looking for an issue to jump at and launch a movement to obstruct such development work. It may be to satisfy their own egos or may be in the interests of the country. There really is no debate here. Technical considerations, geo-mining conditions and economics these three factors are taken into consideration to decide whether the open mine pit method or the underground pit method is more profitable. Normally if there is shallow deposit, the open mine pit method is used. For deep deposits, the underground mining method is better.
The problem with the Phulbari is that the upper level of coal has a water-filled sand layer. So that water has to be extracted at first. Mining is not possible with water there. And underground mining would cause flooding. That was how the accident occurred at the Barapukuria mine. Not even 10% of the reserves at Barapukuria will be recovered. This was because of underground mining.
So through my study I feel that underground mining at Phulbari would be very difficult. The open mine method has to be followed. A depth of 330 metres can easily be reached and for the next 30 years a total of 15 million tones of coal can be extracted.
What is your observation about the interest of Indian company Tata in Phulbari?
Tata is certainly a sound company. I do not know exactly what they want to do here. They have coal mines, they have a steel industry. They are searching for coal mines all over the world. They are taking up a coal mine in Indonesia. They want to come to Phulbari too, but I dont know too much about this.

Coal is gaining importance as an alternative source of energy
Coal is definitely gaining in importance. There hardly is any alternative to coal. You have so much coal, but if you delay in extracting it simply because of some debate created by the civil society, this will not bode well for the country. It takes at least six years to produce an underground mine whereas it will take three years for an open pit mine. The longer it takes to take a decision, the longer it will take to go into production.

That is the opinion of an expert. What about the commercial aspect. For example, if Asia Energy comes in, how should we negotiate a good bargain?
My study doesnt have anything to do with Asia Energy. I dont know anything about that. However, the matter is very simple. The government has to negotiate with them about how much they will get if they come. One has to negotiate skillfully. It is a matter of calculation. One must have a far-reaching vision. If other developing countries can do this, why cant Bangladesh?

For how long can we use the coal from Phulbari?
If further drilling is carried out in northwest Bangladesh, more deposits will be discovered. Bangladesh then will be able to extract coal for the next 100 years. India extracts 450 million tonnes of coal every year. Annual extraction from Phulbari will be 15 million tonnes. And in these 100 years, technology will go far ahead; perhaps everything will be nuclear by then.
The people living in the mine area are scared and apprehensive. How will they be rehabilitated?
Those who carry out the mining must deal with this extremely sensitively. Proper compensation must be given to those who lose their land. This is a critical issue the world over. In Uday Singur of West Bengal, no one is willing to give up their land. They are fighting over this. But if the displaced persons are given homes, villages and towns, if they are compensated handsomely for their land, then I dont think there will be any problem.

How about employment for the local people at the mine?
There wont be too much employment because large open pits call for more mechanized work. I dont think the Phulbari mine will require more than 1200 to 1400 hundred people, that too at the lower level. There will only be a handful of people at the technical level.

You are carrying out the study for UNDP. Why is UNDP so interested in this?
UNDP is concerned about energy in Bangladesh. This is also a part of the Millennium Development Goal. UNDP wants to know what alternative sources of energy Bangladesh has so that Bangladesh can meet its energy needs in future. The country will break out into violence if there is no energy. We cant survive without energy. Electricity is our right.

You must have discussed with Tata and Asia Energy for the study, yet you seem to have avoided discussing this. Can you tell us where they stand at present?
Tata is developing industries very aggressively. It is buying steel plants abroad. It has bought up the Jaguar automobile company. They are going all around the world, either jointly setting up industries or doing so alone. They are looking for coal mines and other mines the world over.
I have spoken to Asia Energy. I have to draw up a report in 10 to 12 days and so I went to their office to collect some information. I found their project report to be of a high standard. They have used very good consultants. After all, they are going to invest huge amounts, so they need a sustainable plan.

When do you think Asia Energy will be able to start work?
I really dont know, but they only do so when the government gives its approval. The government has given environmental clearance to Asia Energy. They submitted their project report to the government about two years ago. So it all depends on when the government takes its decision.