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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Mahmudur Rahman and His Energy Vision
Khondkar Abdus Saleque
Saturday, 06.07.2008, 04:56pm (GMT)


In analyzing the self destructing role of some so called intellectuals who created anarchy in Phulbari Coal mine area. But he was the person in charge, why he failed to contain the situation? Why the situation was allowed to drift to a level when law enforcing agencies had to kill innocent locals. His role on relying on another section of theoretician was also not appropriate.Mahmood must also share responsibility for mismanaging and mishandling Phulbari mine development and formulation of coal policy. Bangladesh Government was due to respond to Asia Energy submitted mine development plan within the time frame included in the contract. Government failed to do it and it is a BREACH of contract on the part of the government. So Mahmood is also responsible for failing to diversify our energy option at the appropriate stage.

Coal boom boosts GCM

Edmond Jackson
06.06.08


This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

In a New Year piece citing Five special situations for 2008, I noted the prospects at AIM-listed GCM Resources (GCM) at 98p - formerly called Global Coal Management

and also previously known as Asia Energy - which floated in March 2004. The company first changed name following orchestrated violence in August 2006 against its principal project, a start-up coal mine at Phulbari in northwest Bangladesh, and because of a change in strategy in which it took stakes in other coal and uranium ventures, as a means to diversify.

Recruiting Steve Bywater as chief executive, the company introduced a talented industry leader and also raised funds to proceed with Phulbari; hence while waiting for things to settle in Bangladesh it made sense to apply management and finance to other situations to enhance shareholder value. Astute investing and soaring coal prices have affirmed this portfolio approach that now limits downside risk in GCM shares, whatever happens in Bangladesh. You can learn more about the activities at gcmplc.com.

Higher coal prices and acute power shortages in Bangladesh have intensified speculation there, and on the London stockmarket, that Phulbari must be developed if Bangladesh is to address its energy crisis. Without radical action, power shortages and cuts can only get worse and severely compromise the country.

As if affirming the improved odds of progress with Phulbari (still speculative, it should be emphasised), earlier this year there was determined stake-building by AIM-listed Polo Resources (PRL), up to the 29.7% maximum ownership level in GCM before a bid must be made. Polo is another company capitalising on the fast-growing Asian market for coal. The price had then reached about 130p. Then, on 19 May, it was announced that Polo had approached GCM with a cash offer at 175p per share, conditional on raising funds. On 2 June, Polo affirmed that it had raised over 80 million via a share placing at 13p, which would cover the 60 million required to do the deal - assuming GCM shareholders accept. As I see it, they would be caving in irrationally; the company already has a quality spread of interests and calibre management that stands as good a chance as anyone of progressing the Phulbari project; moreover retaining GCM equity could give holders many times more than the 175p per share in cash from Polo now. Logically, Polo would not be stalking GCM without firm belief that Phulbari stands a good chance of development.

Hard to judge
There was an original contract, on which (and using much lower coal prices) GCM's broker estimated a target of 20 to 25 per share when placing 6.74m shares at 450p in November 2005 to raise funds for initial development activities. But it is hard to judge - or rather, guess - what terms could eventually be agreed if Phulbari is to progress. Hence Polo's timing is shrewd and opportunistic amid the uncertainty, with possibly a massive transfer of value from GCM shareholders to Polo's on the basis of a cash offer.

Be aware how difficult it can be to achieve a breakthrough in Bangladesh. GCM management was confident late last year that a coal policy would be affirmed by Bangladesh in January, as a basis for progressing with foreign investors. Six months later, the interim government may still be prevaricating because it fears social unrest. Uncertainty over who could be in control of GCM may also add to the challenge of getting project approval from the authorities.

A further dilemma for GCM shareholders is that Polo - and any supportive investors recently buying in - may already own over 50% of the equity and control the company. It would however require 90% ownership before any dissenters would have their shares compulsorily acquired. It is quite curious why GCM has avoided any comment on the approach, which on the face of it may be a tragedy for patient longstanding investors, some of whom will have bought in at prices over 400p in the market or a placing.

So this is a complex and intriguing situation, one for experienced players of mining shares. You cannot define any 'margin of safety' in the current buying price, holding GCM involves taking a view on the probability of events although the downside should be limited if Phulbari and the bid approach both go nowhere.

Be aware that if there is a worthwhile breakthrough on Phulbari then this share can move very quickly, especially now that the coal sector is a hot play on the stockmarket. Regular news about coal producers agreeing attractive forward contracts has meant institutions and individuals alike scrambling to get exposure.

Mind too, that charts suggest that the coal sector involves a financial bubble rather like oil shares as well, although re-ratings can be justified on a one to two-year view as a result of forward pricing agreements. The prime risk for spoiling the party in coal mining shares looks to be inflationary issues in China possibly needing tougher action there, with higher interest rates, which could destabilise China's economy and quickly impact sentiment in commodity markets. For the time being, however, coal shortages amid strong demand mean this sector is enjoying a boom.

One way to keep tabs on an evolving investment situation is to register for Google alerts on a topic, such as 'Phulbari', but be mindful that you can get bombarded with distracting material this way. A problem with trying to be objective about Bangladesh is that some of the media agenda is an environmentalist crusade; whereas its political elite may be wiser to the realities of energy shortage.

Even if GCM shares are too tricky a proposition for you to consider buying, this is a fascinating story to follow.

Monday, June 9, 2008 06:14 PM GMT+06:00

Investing in long-term economic future


Given the triple global shocks of US recession, record oil prices and rampant food inflation, the relative strength of the Bangladesh economy is something that the country can be proud of. Add to this the lagged impact of cyclone Sidr and the current projected official growth rate forecast of 6.2 percent for FY 2007/08 is a testament to resilience of entrepreneurs and workers in the private sector.

But with the release of the budget, our focus naturally turns to strategy and the effectiveness of fiscal policy. The somewhat confusingly labelled revenue budget is expected to rise by 40 percent while the Annual Development Programme (ADP) element of the budget is projected to decline. While the Finance Adviser noted the distinction is artificially separated as they have an equal impact on people's lives, from a policy perspective, it is a useful split insofar as it distinguishes between expenditure to meet current consumption/subsidization needs for the economy, versus an ADP expenditure that ought to enhance the competitiveness and longer-term potential of the Bangladesh economy.

On the revenue element of the budget, there has been a lot of focus on the pros and cons of the policy of energy, food and fertilizer subsidization that is prevalent not only in Bangladesh but a number of other developing economies. My bias is always to think that greater price transparency is better than distortions in the costs of goods for the more effective functioning of a market economy. Direct subsidization for the poor is also more effective than subsidies than benefit the millionaire city businessman to the same extent as the poor farm labourer. But the violent protests in India in the past week in response to the 10 percent hike in oil prices underlines the need for sensitivity by the government in not adding to domestic political tensions at this sensitive time of transition back to a democratically elected government. So reducing subsidies in the short-term might be ill advised.

But the authorities should be less happy with the inability to deploy development spending more effectively. Bangladesh needs to equip itself more effectively to compete more effectively, attract FDI and reduce its reliance on imports of food and energy. So I would suggest focusing discretionary spending on the following areas:

1)Food: Expanding the Agri research budget so Bangladesh can become a major net exporter of food. More spending on biotechnology solutions from hybrid rice and enhancing crop yields to more efficient aquaculture will be money well spent.

2) Energy: Bangladesh can get closer to energy self-sufficiency by exploiting the 3.5 bn tonnes of coal as well as greater utilization of bio-diesel opportunities through expanded Jatropha production. Increased investment in energy research, both conventional and alternative, should be a top government priority.

3)FDI: ADP spending should be directed to both develop and market Brand Bangladesh more effectively that will increase FDI flows. Targeted fiscal incentives to bring back more NRBs as China has done so effectively with their Diaspora is also likely to be an effective use of resources.

If we see fiscal policy as a key strategic tool in our economic development, rather than merely budgetary firefighting and short-term expediency then we will be enhancing Bangladesh's global competitiveness and long-term economic future

http://www.weeklyblitz.net/index.php?id=226

It is now greatly expected that following the self-exile of Sheikh Hasina, there will be immediate reform initiatives within the party. Some of the young, talented, bright but till date deprived politicians in the party are looking for the opportunity of throwing the old garbage [old leaders] out of the party, thus transforming Awami League into a real democratic force to face the challenges of the future decades.

The main thrust of the proposed reforms is to end the dynastic leadership in the parties. It will also change the way these leaders rule when they are in power. These reforms are proposed targeting former Prime Ministers Sheikh Hasina and Begum Khaleda Zia. Hasina is the daughter of Bangabandhu Sheikh Mujibur Rahman, and Khaleda is the widow of former president Ziaur Rahman.

The caretaker government also wants to strip the parties of their powerful and often militant student wings...

The caretaker government is also making conscious effort to create positive international opinion in favor of its reform agenda. It is learnt that the Foreign Advisor Dr. Iftekhar Ahmed Chowdhury is concentrating in adopting several positive plans as well correcting some past errors in turning Bangladeshs foreign policy into one of the best foreign policies in the sub-continent.

June 12, 2008


Bangladesh to adopt coal policy soon to increase production
Reuters reported that Bangladesh's army backed interim government is hoping to finalize a long waited policy soon to extract the huge coal reserves to supplement fast depleting gas resources.

Mr M Tamim special aide to the head of the government responsible for power, energy & mineral resources said that "To meet the energy demand we will have to use the coal resources. I ask all to leave issue of coal extraction to the experts, have trust in them. Everything will be done on the basis of accountability and transparency."

Energy officials said that 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.

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

http://www.theindependent-bd.com/details.php?nid=83723

At 18:12 this evening:

"LONDON (Thomson Financial) - Polo Resources Ltd. said it has terminated its discussion with GCM Resources Plc. regarding its 175 pence a share possible cash offer for GCM.

Polo said its pursuit of other value generating opportunities is not materially impacted by negotiations which it believes would be necessary to gain the recommendation from GCM for an agreed offer.

GCM received a preliminary cash offer from shareholder Polo on May 19."

Minesite:

June 13, 2008

India Plans To Increase Power Capacity Massively Over The Next Five Years, With Clean Coal As The Primary Energy Source


By TC Malhotra in New Delhi



The Indian Coal Minister, Mr. Santosh Bagrodia has announced that the federal government has made it mandatory that there should be 100 per cent washing of all Indian Coal. Inaugurating a conference on Clean Coal for Green Power in New Delhi, the minister said that to sustain Indian economic growth at eight per cent, the country requires energy security in the face of rising prices, as well as more power for sustaining the industrial and economic growth. The current thinking is that Indias energy requirement by the end of its 11th Five Year Plan, which runs from 2007 to 2012, will be over 200,000 MW. That represents an addition of over 78,000 MW, or growth of about 40 per cent.
Around 79 per cent of the power generated in India is derived from coal. By the end of 11th Plan, the demand for coal should be roughly 732 million tonnes per year, up from the present level of 466 million tonnes. Presently, the annual incremental growth of coal production of coal is around six to seven per cent, and even that needs to go higher to around 10-12 per cent just to meet the immediate coal demand.

The minister highlighted that clean coal offers the benefits of lower ash content and fewer impurities. The ash content of some Indian coal is higher than 40 per cent. He also addressed concerns about pollution from the methane gas associated with coal deposits, recognizing that there are opportunities to commercially exploit that methane. And Mr Bagrodia also wants more recycling of power station emissions like carbon dioxide, sulphur dioxide and nitrous oxide. So looking ahead, the Indians are keen to lay the emphasis on clean coal technologies and those surrounding coal bed methane, coal mine methane, coal liquefaction and underground coal gasification.

Washing coal can reduce ash content by 10 per cent, while the resulting product is also more energy efficient. The pressure on the fly-ash disposal ponds would also be reduced as the material to be disposed of would be considerably less.

According to the minister the government is aiming at a capacity of 250 million tonnes per annum in the next five years. Another important area that the government is exploring is whether underground coal gasification can be taken up on non-minable deposits where commercial coal production is not possible. The government has identified around 229 coal blocks of which 182 coal blocks were allotted to various private public entrepreneurs with the aim of mining a further 100 million tonnes per annum to directly feed power generation in the country. The government has also sanctioned 26 coal blocks for the production of coal bed methane or for coal gasification. Commercial production has already started in the Raniganj Coalfields.

The Minister appealed to the experts gathered at the conference to concentrate on two prime issues: minimizing pollution and emissions through greater use of clean coal technologies, and addressing the high costs associated with these technologies. The minister appealed to coal companies to step forward to take up clean coal technologies so as to reduce emissions and minimize global warming.

Industry analysts say that coal is an abundant source of non-renewable fuel across the world, but the quality of coal varies significantly by region. Demand for coal has increased significantly over the past 30 years. This trend is expected to continue at an even faster rate in upcoming years, with most of the rise in demand coming from China and India. The increase in coal consumption stems mainly from the need for more electricity in both of these countries.

Looks like someone else must be interested in GCM - up 16% this morning and sp at 272p. Wat's going on?

I have been in this for a while buying from 90p and always said if they get the Green Light stand by for a 10 share !! they are near making up there minds !!

Govt to adopt coal policy soon Tuesday, Jun 17 2008
Uncategorized phulbariproject 9:35 am

The government is expecting to finalise the long-awaited policy soon to extract the huge coal reserves to supplement fast depleting gas resources, a senior energy official said yesterday.

To meet the energy demand we will have to use the coal resources, said M. Tamim, Chief Advisers Special Assistant for Power, Energy and Mineral Resources.

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, with its 150 million population, 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 countrys vast coal resource.

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

The country 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 countrys north at an early date.

The projects worth a total US$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 effect on the sp is just amazing!

Are you in Toya ?

Yes - thank goodness I stayed in when tempted to sell a short while back! Just for a change I managed to curb my impatience

well Interesting times for sure If positive news soon we could see 5 /10

Devlopment Project News in Phulbari
Govt to adopt coal policy soon
Tuesday, Jun 17 2008
Uncategorized phulbariproject 9:35 am



LOOK's like we could touch 3 today !!

UK smallcap opening - GCM Resources climbs as Morgan Stanley ups stake
AFX


LONDON (Thomson Financial) - GCM Resources climbed 20-1/2 pence to 320 as Morgan Stanley lifted its stake in the group to 12.08 percent, while Central China Goldfields edged up 0.375 pence to 5.875 after the company said it is on track to produce early cash flow from small scale mining and gold production at the Dong Mao Huo project in the Nei Menggu Autonomous Region, with a targeted start-up in the first quarter of next year.




4.00 By Close ??

Thanks Smiler. Bought in October at 99p on your rec. best stock I've held in a while! Keep up the good work!

sure has rocketed .... well done Toya and others .... not a stock i have followed at all, but as rise is on fairly light volume, prob best to avoid being sucked in at this stage ...... general markets also looking vulnerable, so this sort of stock is more likely to get walloped if further significant weakness

massive rise......could be a deleterious fall......a profit is a profit.....my broker said at 120p they probably wouldnt move much more in the short term so i didnt bother.....But this is pure speculation...and on small volume......if it turns it could be nasty...good luck to all holders and well done...just wish i'd bought some!