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/

"

UPDATED: 21:35, June 07, 2007
Bangladesh to realize self-sufficient on power by 2010



The Bangladeshi government has set a target to generate sufficient electricity by 2010 to reach a level where there will be no load-sheding in the country.

Finance Advisor of caretaker government MD. Azizul Islam said this when announcing fiscal year of 2007-08 budget Thursday.

Islam said although the demand for electricity increased manifold during the past few years, generation did not increase correspondingly.

When the summer comes starting from March, Bangladesh has been facing serious shortage of power. In the capital Dhaka, many places have a load-shedding of around five hours a day. In the districts, load-shedding hours are even more.

The Energy and Power Advisor Tapan Chowdhury said earlier there will be no new electricity generation before September 2008.

Global Coal Management PLC
08 June 2007

Global Coal Management Plc



Further investment in GVM Metals Limited


Global Coal Management plc announces that on 07 June 2007 it acquired a
further 3,100,000 shares in GVM Metals Limited at a cost of 930,000 and that it
now holds an interest of 20,300,000 shares, 10.33% of the issued share capital
of GVM Metals Limited.



08 June 2007

Sat. June 09, 2007

Draft Bangladesh Coal Policy
Some observations
Engr. A. K. M. Shamsuddin

Minimum Work Obligations under "Exploration Licence" and "Mining Lease" need to be specified in the draft Bangladesh Coal Policy. Findings from Work Obligations under Exploration Licence may also be specified there. These are vital issues and should be included in the draft coal policy which will work as guidelines for the licensee and lessee.
Minimum work obligations under "Licence" for coal exploration may cover the following work components:


1) Topographical survey of the licensed area; 2) Seismic survey covering the licensed area; 3) Exploration drilling covering the coal basin area; 4) Hydrogeological testing of the boreholes; 5) Pump tests of the boreholes; 6) Geological logging, Geo-physical logging of the boreholes and core recovery; 7) Chemical analysis of coal samples and Geo-Technical information of rock; 8) Proper and effective sealing of the boreholes on completion of drilling and other tests.

9) Initial Environmental Examinations (IEE) and Environmental Impact Assessment (EIA) due to coal exploration work i.e. seismic survey and drilling.

After above field work for coal exploration the licensee should recommend the minimum following information in their "Exploration Report" for the consideration of Bureau of Mineral Development (BMD): 1) In-situ geological coal reserve in the coal basin; 2) Measured or proven coal reserve and measured or proven area of the coal basin; 3) Indicated or probable coal reserve and indicated or probable coal basin area; 4) Mineable coal reserve; 5) Outline of the mine plan; 6) Outline of the mining methods; 7) Probable list of equipment and materials for mining; 8) Financial analysis of mining the coal reserve; 9) IEE/EIA report on coal exploration.


Scope of works or minimum work obligations under "Lease" for coal mine development and operation may cover the following work component: There are two parts of work under "Mining Lease" (a) Mine Construction and Development, (b) Mine Operation and Maintenance, which contain:


Mine Construction and Development: 1) Initial Environmental Impact Assessment (EIA) due to mine development and operation; 2) Initial Social Impact Assessment (SIA) of leased area; 3) Rehabilitation and resettlement issues in the leased area; 4) Mine design and planning; 5) Detail EIA and SIA of the leased area. [It may be mentioned here that EIA and SIA of the leased area can be done effectively and judiciously only after the design of the mine and the mine plan. After completion of the mine design and mine plan a clear and vivid picture of geology and geo-technical issues of the underground mine or surface mine can be assessed and EIA and SIA can be conducted accordingly]; 6) Shaft sinking; 7) Pit-bottom development, roadway development, coal face development, etc.; 8) Subsidence effect.

Mine Operation and Maintenance: 1) Coal extraction technology from coalface; 2) Strata control, roof control, water control; 3) Coal transportation system from mine to power plant; 4) Mitigation plan of environmental impacts; 5) Mine Environmental Management Plan (EMP); 6) Mine ventilation and safety; 7) Control of air-borne coal dust and spontaneous combustion; 8) Components of mine rescue team and duties and responsibilities of the rescue team; 9) Emergency Response Plan (ERP).

It is very important to specify the above minimum work programme under "Exploration License" and "Mining Lease" in the draft coal policy. Details of these work obligations under "Exploration Licence" and "Mining Lease" and findings from Exploration Licence may be described under existing Bangladesh Mines and Mineral Rules. Present Mines and Minerals Rules do not contain those.

Specific condition for an applicant of "Mining Lease": An applicant for mining lease should complete the coal exploration work under exploration license before applying for mining lease. Or, in other words, provision may be made in the coal policy for a mining leasee to undertake the coal exploration work during the first three years (maximum) of mining lease. After acceptance the coal exploration work by Bureau of Mineral Development (BMD) the leasee can start work under mining licence. It means that work under exploration licence and submission of coal exploration report to BMD is obligatory for undertaking work under mining lease. The above points may be considered for incorporation in the draft coal policy.

Amendment of Clause 2.2 (GA) and Annexure-KA of reserve table: In the clause 2.2(GA) of the latest draft coal policy it has been mentioned that 60 million tons of coal can be extracted from both Dighipara and Khalashpir underground coalmines. But the techno-economic feasibility report on Khalashpir coal deposit submitted to BMD on August 23, 2006 reveals proven reserve of 297.57 million tons in three seams and a total reserve of 523.49 million tons spreading in eight coal seams covering an area of 7.5 sq. km. This is the outcome of high resolution of 2D and 3D seismic survey over an area of 12.25 sq. km. and drilling of 17 boreholes (14 holes by Hosaf and 3 holes by GSB) at Khalashpir coal basin. In the Khalashpir coal feasibility report it has been further shown that 92.20 million tons of coal could be produced from seam I, II and IV during 30 years. The rest of the coal can be produced in future as per requirement of the country. Accordingly the Clause 2.2(GA) and Annexure-KA need to be amended.

Reserve of peat coal: Peat coal has been discovered in Khulna, Faridpur and Madaripur in 1957. A study made by UNDP in 1983-84 revealed the existence of 400 million tons of peat coal in different areas of Bangladesh. Petrobangla under a study with the assistance of CIDA in 1986 discovered 61.27 million tons of proven reserve of peat coal in Dakatia and Kala Mouza in Khulna and Chanda-Baghia area in Madaripur at a depth ranging from 2.0m to 4.0m from surface. Since it is near surface deposit 55.00 million tons of peat coal can be extracted considering as 90 per cent recovery. Though the heating value of peat coal is about 6,370 Btu/lb and moisture content is very high (70% to 80%), these peat coals can be used in small-scale power plants (10-20MW) and brickfields. The above findings may be reflected in the respective clauses and tables of the draft coal policy since reserve of peat coal has not been shown in the reserve table under Annexure-KA.


Clause 3.4.3 (coal briquette): Preparation of briquette should be done from peat coal only.


Coal bed methane: No study about the contents/assessment of coal bed methane has been done in any coalfields of Bangladesh. Therefore contents of methane is to be assessed first before undertaking any programme for the extraction of coal bed methane. This type of study may be conducted in Jamalganj coalfield. Great depth, high temperature, high-grade coal, high thickness of coal seams are some of the features for finding coal bed methane. Jamalganj coal field has got all these potentialities. This may be incorporated in the respective clauses of draft coal policy.


The findings and conclusions of the above observations are for the consideration of the appropriate authority responsible for finalisation of draft Bangladesh Coal Policy.

published 9/6/2007

Page [ 1 ]

Dhaka, June 9 - After the Indian industrial giant Tata Group, the UK-based Indian giant Mittal Group is also keen to invest in Bangladesh. A high level delegation of the Mittal Group, led by its Managing Director VK Mittal, arrives here tomorrow (Sunday) on a two-day visit to formally place a US$ 2.8 billion investment offer to the caretaker government.



The Mittal delegation will fly to Dhaka on a private aircraft Sunday afternoon and leave the capital on Monday afternoon.



The Mittal Group is one of the largest business conglomerates in both India and United Kingdom (UK) with US$ 28 billion investment in 27 countries across four continents - Europe, Asia, Africa and America.



The Group has already expressed its keen interest to invest in different sectors in Bangladesh through its local agent GRH Bangladesh Limited, which is now arranging the visit of the industrial giants top executives.



The sectors included in the UK-based Indian business groups investment plan are energy, power generation, coal-mine development, and production of ethylene dichloride, caustic soda, LPG (C3) LPG (C4) and hydrogen.



The investment in energy sector, particularly in gas exploration and power generation, would get top priority if the group is given a chance to invest in Bangladesh, Syed G Dastagir Nishad, chairman of GRH Limited, the local agent of Mittal Group, told UNB.



He said the Mittal Group is set to sign a memorandum of understanding (MoU) with the Board of Investment (BoI) seeking to materialize its investment plan and explore business in Bangladesh.



During its stay in the capital, delegation chief VK Mittal, who leads the Global Oil and Energy of the Mittal Group, is expected to call on President Iajuddin Ahmed, Chief Adviser Fakhruddin Ahmed, Army Chief General Moeen U Ahmed, Energy Adviser Tapan Chowdhury and some influential policymakers of the government.



The Mittal delegation will be accompanied by the groups director for international business affairs Javed Pasha, a former minister of Pakistan.



After its merger with Europes top steel manufacturer Arcelor, the Mittal Groups ArcelorMittal became the world's number one steel producer with 320,000 employees in more than 60 countries.



ArcelorMittal has led the consolidation of the world steel industry and today ranks as the only truly global steel maker with plants in 27 countries.



ArcelorMittal is also a leader in all major global markets in varied fields, including automotive, construction, household appliances and packaging.



Its industrial presence in Europe, Asia, Africa and America gives the Group exposure to all the key steel markets, from emerging to mature.



ArcelorMittal key pro forma financials for 2006 show combined revenues of USUS$ 88.6 billion. Its production was equivalent to around 10 percent of world steel output.



It is currently listed under the legal entity Mittal Steel NV on the stock exchanges of New York, Amsterdam, Paris, Brussels, Luxembourg and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia.

published 19/6/2007

Page [ 1 ]

By Tanim Ahemed

UNOCAL discovered the Bibiyana gas-field in 1998. This field about 180 miles northeast of Dhaka has a reserve of 2.4 trillion cubic feet of gas and has only begun to supply gas to the national grid recently, augmenting the total gas supply to bring at a par with gas demand. The time between discovery and meaningful production of the field (about 25 miles from the national gas grid) was much longer than needed because Bangladesh refused to export gas through pipeline to India. Pending the governments agreement for exporting this gas, Unocal, which was the operator at that time, refused to develop the field. In fact, the agreement between the operator and the government was only signed in November 2004, six years after discovery.

Unocals plan to export Bibiyana gas was not mere wishful desire, although export through pipeline was, and remains, prohibited by the production sharing contracts. The company even submitted a pipeline development plan to Petrobangla in October 2001. The proposal was to build a 30-inch diameter, 847-mile pipeline, with an initial capacity of 500 million cubic feet of gas per day, from Bibiyana to Delhi. The Unocal press release of October 30, 2001, reads: The Market Feasibility and Commercialisation Plan included a comprehensive review of LNG and other options available for commercialisation of Bibiyana field and concluded that an export pipeline to markets in India results in the highest value for Bibiyana gas for Bangladesh.

Among the significant benefits to Bangladesh that the press release harped on were an estimated $3.7 billion in total revenues over the 20-year project life ($185 million per year), $500 to $700 million in immediate foreign direct investment, additional foreign exchange, social benefits, construction and operations jobs, besides promotion of additional exploration and expansion of domestic gas pipeline infrastructure.

At that time there was much hype over whether to export natural gas. While some quarters favoured gas exports, critics to this proposal pointed out that this was a valuable resource that the country would have much use for in future. The decision not to export gas has proved right. The use of natural gas is becoming widespread and surely adding to the over six per cent GDP growth of the country. The suggested benefits to the economy that the Unocal press release exhorted now seem to have verged on the ridiculous.

The current situation regarding coal has stark similarities to the deliberations over natural gas. The proponents and opponents of coal exports and open pit mining seem to be repeating their arguments based on the same rationale of a decade ago.


Now it is coal

The coal issue came to the forefront only recently and especially after the much-hyped $3-billion investment proposal by the Indian conglomerate Tata. Tata wanted to set up a coal-based power plant in Barapukuria, which it wanted to develop by open pit mining and export the excess coal, since the production capacity of the mine would be far more than Bangladesh could consume. Around the same time there was another proposal for an open pit coalmine to be developed in Phulbari by the UK-based Asia Energy. While the Tata proposal was delayed and finally suspended till the next elections Asia Energy faced a much greater debacle. Asia Energy had also proposed to export coal for a six per cent royalty on the value of the coal extracted. Their bid for open pit mine, which would require eviction of some 1,00,000 people, including thousands of indigenous peoples, was convincingly rejected through a peoples movement at Phulbari, which culminated in bloody violence in August 2006. The government signed an agreement with the people pledging to prohibit open pit mining. Since then, and particularly since the military-backed interim government came to power, there seems to be a movement regarding coal particularly as regards formulating a coal policy that many quarters fear would favour foreign companies.

According to contested estimates, there are some 2,700 million tonnes of coal deposits in Bangladesh. The first draft of the coal policy, prepared by the Infrastructure Investment Facilitation Centre, says Bangladesh has an estimated mine-able reserves of 1400 [million tonnes] equivalent to some 37 trillion cubic feet of gas. It would be worth a staggering (at $70 per tonne, given that it is high quality coal) Tk 6,86,000 crore. But this would only be possible with open pit mining, which the draft favours. The only alternative, therefore, is to go for large-scale opencast mine with high annual outputs. Opencast mines damage a large land surface area, displace people from their ancestral homesteads and cause agricultural losses. But the value of the coal assets under the ground is high, compared to the resettlement expenses of local population, the price of crops, impact to environment, etc, the draft said. Such a conclusion warrants studies and comparative analysis, of at least one coal mine, to be substantiated. The policy does not provide one.

In the next paragraph of its vision statement, it says that Bangladeshs coal would have a good international market as steam coal and that modern technology would allow companies to exhaust all deposits within the next 30 years. It is, therefore, necessary that yearly production target for each such mine would have to be set in such a way that the coal is utilised for both domestic and export uses, signifying the need for some export controls. But there is no point allowing export of a non-renewable energy source when it is guaranteed that Bangladesh does not have enough in the first place.

The policy states that given the extent of local coal use, foreign investors should be allowed to export double the amount of domestic consumption for the first 10 years and equal to the amount of domestic consumption in the following years. This is exactly what Asia Energy had proposed for Phulbari when critics pointed out that only a few countries export coal, and that too, not exceeding five per cent of their entire coal production. The similarity of the two is not coincidental. Certain quarters, especially those opposed to export and open pit mining, suspect that the companies interested in coal mining may have intervened in the policymaking process and manipulated with its contents.

The discussion currently focuses on these two issues export and method of mining which would largely decide the extent of commercial profit for private investors. As is generally the case for large commercial ventures, the financial aspect is exaggerated while the human aspect is underplayed along with the environmental concerns. It is, of course, the right stance for an investor but should not be the stance of a government, elected or not.


A few considerations

The export issue hinges on the provision for open pit method. This is cheaper than underground mining and allows far higher recovery of coal. Production at such a mine would be far more than what Bangladesh could consume. The central issue is to decide how much foreign direct investment coal mining should cost the government. Investment in mineral extraction is by nature, and almost by definition, predatory. However, before approving a certain investment proposal the government should weigh the benefits against the costs. The benefits, as for any investment, include potential employment generation, a possibility of better distribution of wealth if the company is willing to float shares, transfer of replicable technology and increase of foreign exchange reserves. On the other side, the costs in this case include, resettlement, building infrastructure for the coal to be transported from the mine to a port, environmental hazards and whether outflows of foreign exchange in profit repatriation outweigh the initial inflow. It would be up to the government how much to value the lives and livelihoods of several thousand indigenous peoples. It would also be a matter of choice whether to calculate the value of land at current levels or at levels that they might reach in 30 years, or the value of crops lost along with the extent of employment it generated. It would be very likely that after the mine is abandoned the soil would become infertile altogether, where the locals currently produce between two and three crops a year.

A decision to export coal should also depend on Bangladeshs future energy demands. This could be estimated with the projected growth of the economy in general. The estimates provided in the policy drafts presume a maximum growth rate of seven per cent and predict requirement of an additional 26 trillion cubic feet of gas till 2025, equivalent to almost a billion tonnes of coal. What would happen afterwards is not indicated by any estimation. It would not have been too difficult to imagine, however, if the government had decided to export gas back in 2001 when Unocal pressed for it and quarters sided with its view of maximising commercialisation of energy source. Even then few had predicted that the economy would ever show the possibility of growing at an average of six per cent. This growth will hopefully increase as the country realises its potential to the fullest. When making these estimates, projections should presume the maximum possible growth and energy demand for reasonably long period, at least 50 years.

On the other hand, immediate development of the coalmines and exports would add to the foreign reserve and generate some employment Asia Energy predicted generation of 1,100 permanent and 2,200 temporary jobs. Asia Energy claimed that its activities would affect some 17,000 hectares of land. The pit would reportedly be the size of the entire Sylhet city. A provision for open pit mining must then offset the costs of what all that is currently in place on the ground and prove to be significantly more than that. Asia Energy claimed that its venture would result in some 20,000 additional jobs. However, it would have led to about 1,00,000 people losing their land. The mine would have also led to a depletion of water tables in about 300 square kilometres, affecting agricultural employment and produce of a much larger area.

Typically open pit mines are located away from human settlement. Bangladesh has a population density of some 1,079 people per square kilometre, while Australia has three per square kilometre, Germany 237, India 363, China 139, Indonesia 120 and the United States 32. Although agriculture remains sensitive and crucial, these economies have a matured industrial and services sector that could easily make up for the losses of crops or agricultural employment, if any at all. These countries are also much larger than Bangladesh in landmass, which would mean that several thousand hectares would not be a significant area.

A BBC report on July 12, 2006 states: Studies in open-pit mining in other countries, and particularly one from Pennsylvania in the United States, found that one river 160 kilometres from the pit was still poisoned three decades later. Among other harmful effects is the production of sulphuric acid from exposed coal surfaces when they come into contact with water and air. As water drains from the mine, the acid moves into waterways. It pollutes the soil as well as streams by acidifying and killing fish, plants, and aquatic animals. Apparently by the late 1930s, it was estimated that American coalmines produced about 2.3 million tonnes of sulphuric acid annually.


and one small concern

According to article 143 of the constitution, taken together with article seven, all mineral resources belong to the republic, and in turn all powers of the republic belong to the people. The government is, therefore, only acting on behalf of the people as far as coal is concerned. The deposits of 1.4 billion tonnes of coal worth at least Tk 6,86,000 crore translate into roughly Tk 47,000 for every Bangladeshi citizen. But the people, who are really the true sovereigns of the republic, do not know the fate of their property and the terms under which it would be leased out. Between the first draft, dated December 1, 2005, and the fifth draft, dated May 30, 2006, only the first two are available on the internet but the subsequent drafts have been kept strictly secret. The only means to gather information has been through occasional reports in the popular media.

Although the energy adviser to the government, Tapan Chowdhury, has mentioned the possibility of consultations with the private sector, there have been no visible efforts of the government to ensure that the concerns of all quarters of the people have been accommodated. Neither has there been any effort to explain the governments stance regarding controversial issues and the rationale for such a stance to the general populace. After all, it is their property that the state is handling and the people, therefore, have the right to know. The secrecy, as it typically does, is only fuelling further confusion and doubts in the minds of the people. Especially given the fact that the current government is not an elected one nor was it mandated by the people to govern them and their interests the relevant authorities should have been all the more forthcoming about the process and fate of coal policy only to have acted responsibly, if not to quell misgivings.


In the name of energy security

All the five drafts of the coal policy exhort energy security. The fifth was apparently referred to Nurul Islam, head of the Institute of Appropriate Technology at the Bangladesh University of Engineering and Technology. He was asked to submit his views, in complete confidence, to the Prime Ministers Office, when the BNP-led government was still in office. But it is apparent from his comments and observations that the essence of the subsequent drafts has not changed.

Although the drafts exhort Bangladeshs energy security as the prime concern for all coal-related activities, the term itself has not been included in the list of definitions. Thus, it is quite up to the interpretation of the reader. Energy security should ideally mean a reasonable access to energy for a sustained period of time. The period of time as suggested by Nurul in his observations and apparently accepted by Tapan is 50 years. A report in New Age, on February 28, quoted Tapan as saying, First we will ensure that the coal reserve meets our local demand for 50 years, and then we will think of exporting surplus coal. There will be no provision that will allow export of coal without meeting our local demand.

But even the fifth version of the coal policy does not explore ways to ensure that coal deposits last till 2025 and beyond although it mentions that production and exploration plans should be put in place to ensure energy security till 2050. Funnily the policy states that in case there are indications that coal deposits would be depleted before the timeframe, the Geological Survey of Bangladesh should encourage to undertake further exploration for discovering appropriate deposits. If it were indeed the case that exploration resulted in further discovery of energy sources, then all the countries of the world would conduct exploration through private agencies and become energy secure for however long they desired.

Furthermore, the fifth version also stated that in order to ensure energy security, Bangladesh must enhance coal production capacity to 20 million tonnes per year within 10 years and then to 40 million tonnes within 20 years. It also states that for the first 10 years power generation should be some 2,000MW and in the next 10 it should go up to 5,000MW with the extracted coal. Provided that production of each megawatt of power requires about 2,600 tonnes of coal per year, 2,000MW could be produced with about 5.2 million tonnes and 5,000MW with 13 million tonnes. It means the coal policy advocates for producing almost four times more than required for the first 10 years and about three times more than requirement in the following 10. And the only way to extract that much coal is through an open pit, which must be done for the sake of energy security according to the coal policy.

The projected production of 20 million tonnes to begin with and presuming the entire coal deposit is recoverable, Bangladesh would begin to produce 1.4 per cent of its entire deposit, although in contrast, India produces only 0.58 per cent of its reserves, the United States 0.013 per cent and China produces 0.25 per cent of its reserves.

The policy draft also deliberates on the functions of the state as regards coal exploration. The state is relegated to a supervisory role and extraction is left open to the private operator, a move that presupposes a policy decision that the state will not have any operations of its own.


As it stands

According to a report in New Age on May 12, a provision for export has been included in the policy stipulating that companies may export double the amount of coal to be consumed at the mine mouth power plant for the first ten years. For subsequent years the company would be allowed to export coal equal to the consumption of the power plant. This recommendation, reportedly made by Nurul Islam, limits the amount of coal exports to some extent since previously the amount of coal to be exported would depend on the total domestic consumption of coal. Nurul Islam had initially opposed the bid for coal exports.

He had also opposed open pit coal mining considering the population density, possible environmental hazard and the deterioration of fertile land. He had initially recommended an outright ban on open pit mining until the government itself carried out a pilot to ascertain its suitability. However, the policy leaves the mining method upon the discretion of the mining company.

The policy is currently being scrutinised by a committee headed by Wahidunnabi Chowdhury, an additional secretary of the Energy Division. Since there is disagreement among the committee members over the mining method, as the report stated, there is a possibility that the method would be left to a special committee that would decide on the method on a case by case basis.

Another report in New Age, published on June 11, stated that the government had appointed an eight-member committee to finalise the draft. This committee does not include Nurul Islam, although he has been instrumental in formulating the policy as it currently stands. The committee will reportedly be headed by Abdul Matin Patwary, vice-chancellor of the Asia Pacific University and former vice chancellor of the Bangladesh University of Engineering and Technology. The other members are the University Grants Commission chairman, Nazrul Islam, journalist Ataus Samad, Badrul Imam, professor of geology of Dhaka University, Dr Mustafizur Rahman, economist and research director of the Centre for Policy Dialogue, Petrobangla director (mines and minerals) Md Maqbul-E-Elahi, Infrastructure Investment Facilitation Centre executive director Nazrul Islam, and a representative of the army.

The composition of the committee will certainly raise questions as to what criteria had been set for the committee members and how each might contribute to the draft policy. The army might feel that it should have a representative on the committee because eventually they would be the ones to be blamed. But then exclusion of farmers, who are the largest employers of the country or garment workers who earn the prized foreign exchange cannot be justified, more so because every citizen has a share of that coal and may very well demand to have a part in the decision-making process, especially since the military-backed regime does not have the mandate to govern them.

The committee that would decide on the coal policy should keep that in mind. Each of the members must act with complete faith and sincerity with a single end welfare of the people in mind. The responsibility to ensure that people get their fair share also lies with this committee. Its decision must not leave any doubts in the peoples mind as far as their welfare is concerned.

The countdown has started !! Can the govnt really forfeit billions in tax revenue from these projects? Personally, I HOPE NOT !!


Decisions on investment by Tata, Asian Energy, Mittal Group by July 15

UNB, Dhaka

Executive chairman of the Board of Investment (BoI) Nazrul Islam Tuesday said the government would give its final decisions on the stalled investment offers placed by international investment groups like Tata, Asian Energy and Mittal Global Oil and Energy by July 15. "No further delay the government will give its decisions by July 15 on the investment proposals of Tata, Asian Energy and Mittal Group," he told reporters after his meeting with a visiting investment delegation from Singapore at the BoI office.
Sources at the BoI said there is a move by the government investment promotion agency to have concrete decisions on the pending investment offers made by the foreign investors.
Among the interested investors, Indian Industrial giant Tata Group placed an offer to invest US$ 3 billion while UK-based Asia Energy made an investment offer of US$ 2 billion to develop open-cast coal nine and set up a power plant. Mittal Group came up with a US$ 2.9 billion investment offer in energy sector.
"Our top officials are working on the issue and holding meetings almost everyday at the Chief Advisor's Office That's why we're expecting a breakthrough regarding the pending investment offers," said a top official.
Meanwhile, the delegation of Singapore's Textile and Fashion Federation (TaFf), which came here on a four-day visit, expressed keen interest to investment in the country's textile and clothing sector.
"We've keen interest to invest in Bangladesh's textile and clothing sector, we're exploring investment potentials...the business cost and labour price are very low here," said Benny Pua, head of the TaFf delegation and managing director of Unitex of Singapore.
Unfortunately, there was a power outage for over an hour when the business delegation was in the meeting, disrupting the lift service at the Jibon Bima Bhaban that houses the BoI office.
The BoI chief said the government gives importance to the investment offer from Singapore since the Southeast Asian country has been the third largest investor in Bangladesh.
About his recent visit to Germany, the BoI Executive Chairman said visited an open-cast coal mine in Colon of the European country to have experience about open-cast coal mining.
He said the coal mine in Colon set up a 5,000 MW power plant which proves the usefulness of coal in power generation. Bangladesh can also do that as it is experiencing huge power shortage.
He, however, said experts could give a better
answer whether open-cast coal mine is feasible for Bangladesh.

Thu, Jun 21 2007. 1:43 PM IST

Tata investment plan may finally get Bangladesh nod Posted:

New Delhi: The Tata Groups $3-billion investment plan, which has been lying in limbo for the past two years, may finally see the light of day in that country. The Bangaldesh government has indicated its willingness to reconsider the proposal and has said it will take a final decision on the issue on 15 July.
S. Nazrul Islam, chairman, Bangladesh Board of Investment, told the New Nation on 21 June that there would be no further delays and that apart from the Tata Groups proposals, the government would also decide on proposals forwarded by the Promod Mittal group and Asian Energy.
The Tatas had first indicated interest in investing up to $3 billion in Bangladeshs steel, power and fertilizer sectors in 2005.
Peeved at the prolonged delays, the Tata Group had early this year announced the suspension of its operations in Bangladesh, saying the government would have to decide on its investment as it was scouting for opportunities in other countries as well.
According to reports, the Bangladesh governments hard line on foreign investments has impacted inflows from abroad. Net foreign investment in the country fell 16.5% during July-March in 2006-07 fiscal to $385 million against $505 million during the corresponding period a year ago.
Other proposals that were kept on the backburner included UK-based Asian Energys plans for coal mining and setting up of power plant at the cost of $2 billion and the Promod Mittal-promoted Global Steel proposal to invest $2.9 billion in the countrys Bangladeshs energy sector. Promod Mittal is the brother of steel magnate L.N. Mittal.

118/120 COULD BE THE LAST TIME we see this !! come July who knows 5.00 + ??That is if they say YES !!!! here's hoping :)

smiler o, thanks for posting the info, it's good to have the background.

Am I right in saying that GCM are already 'contracted' to undertake the project and that they are awaiting Government approval for the Environmental studies to be ratified. They could in theory use a 'No' decision to claim damages/compensation should it all go pearshaped.

Suppose it's all about 'political will' in the end and it looks to me like the clock is ticking towards the energy end game for the country.

Darradev, I remain hopefull, I have been buying on the dips over the last 9 months but it will be an interesting few weeks ahead !

Smiler, been in with aen/gcm for a couple of years been watching the situation not sure which way this will go any ideas

We are dealing with bangladesh !!!! but they do need it so I remain hopefull but time will tell I guess . It strikes me that given the possibility that GCM will at least quadrupple in value on such news, to me it is a decent gamble given that with there other investments the support level is around 80/90!.

Interesting announcement; a modest 'positive' on the view at least one director is taking, assuming he retains the shares. Implicitly he thinks it less likely he will be able to buy GCM shares in the market near 75p in due course:(from the darker side)

Global Coal Management PLC
22 June 2007

GLOBAL COAL MANAGEMENT PLC

DIRECTOR'S DEALING

Global Coal Management PLC ('the Company') wishes to advise that William
McIntosh, an executive Director of the Company, has exercised options totalling
25,000 new Ordinary shares of 10p each at a price of 75p which were granted to
him in August 2004.

Mr. McIntosh now retains a beneficial interest in 25,000 Ordinary Shares which
represents 0.05% of the current issued capital of the Company and he still
retains 25,000 options exercisable at 75p.

The new Ordinary Shares will rank pari passu with the existing Ordinary Shares
of 10p each in the Company and trading of these shares on AIM is expected to
commence on 27 June 2007.

The total number of Ordinary Shares in issue following this issue is 48,806,024.


22 June 2007

Sat. June 23, 2007


Coal -- the energy resource for 21st century
Dr. Rafiqul Islam

World's population is expected to reach over 8 billion by 2030, from its current level of 6.4 billion and consequently global energy demand will grow by almost 60 percent by 2030 and rise to 16.5 billion tones of oil equivalent per year.

Fossil fuels and in particular coal will meet up this challenge in future. Nuclear energy though provides a significant proportion of energy in some countries, but in general it faces serious public opposition.

Renewable energies are growing fast, but make up only a small part of global energy production -- the International Energy Agency (IEA) predicts that by 2030 only 14 percent of total energy demand will be met from renewable sources. In fact its not wise to depend on a single source of energy.


Coal can play a unique role in meeting the demand for a secure energy supply. Coal is globally most abundant and economical as well of all fossil fuels, which can be used for both power generation and industrial applications.

The production and utilization of coal is based on well-proven and widely used technologies. Coal faces environmental challenges. However, research efforts into improving the efficiency of coal fired electricity generation and technologies for carbon capture and storage offer routes to reduce carbon dioxide emissions. Coal reserves are significantly more abundant and much more widely and evenly dispersed than other fossil fuels.


The top five coal producing countries are: China, US, India, Australia and South Africa. All these countries use their indigenous coal as the primary fuel for electricity generation and all except India have a sizeable coal export market.


The world currently consumes over 5500 million tones of coal for use in power generation, steel production, cement manufacture, as a chemical feedstock and as a liquid fuel (IEA, 2005a).


Where there is a forecast of depletion in the supply of oil and gas in next 50 years coal may serve the purpose for next 150 years or more and by then new and renewable sources of energy will find wide market.


Coal can be converted to liquid and gaseous fuels to substitute for oil and ultimately to less depend on imported oil -- South Africa has a well-established coal-to-liquids industry, and China is currently adopting this technology.

China wants to cut down its oil import dependence by building a commercial scale direct coal liquefaction plant in Inner Mongolia, which will produce around 50,000 barrels a day of finished gasoline and diesel fuel.


Overall costs for coal-based power stations are usually lower than from other sources and utilization of coal for electricity generation should be a key choice. At present almost 40 percent of global electricity generation is based on coal (IEA, 2005b). The generation technologies are well established.


Not only the developing nations but developed nations also face power crisis and the solutions for that has been recognized as utilisation of more coal in power plants.


Renewable energy can reduce dependency on finite energy sources and remove some of the risk on oil import dependence.

Hydropower provides many countries with a substantial amount of their electricity needs; however, when weather conditions deviate from normal, severe problems such as the blackouts experienced in Brazil and New Zealand can occur.


New Zealand's crises in 1998, 2001 and 2003 occurred as a result of an over dependency on a single energy source -- hydro power. There has been now a four-fold increase in coal fired electricity generation (IEA, 2005b).


In California due to severe energy crisis in 2000-2001 a 1300-mile transmission system to generate 12000 MW of electricity -- 6000 MW from coal fired gasification (IGCC) plants and 6000 MW from wind power -- has been in plan.


In September 2003 Italy suffered a nationwide blackout, which had an impact on its total population of 57 million people. Much of Italy's electricity is imported. The bulk of Italy's own generation is from oil-fired power stations.

Due to the increasing cost of oil and a need for new and diversified power generation, many of these stations are being converted to gas or coal fired plants. Enel, Italy's largest generator, aims to double its coal fired capacity to over 10,000 MW, or 50 percent of its generating portfolio. The Italian government has also eased regulations on building new power plants and sought to encourage greater investment in the electricity sector.

In Bangladesh the only commercial energy resource that mainly supports power generation in the country at present is natural gas. About 70 percent of power generation depends on natural gas.


As per the forecast of Petrobangla, the total remaining gas reserve would meet the country's projected energy demand upto 2015. So discovery of additional gas fields or alternative sources of fuel could meet up this challenge. Coal discoveries of the north-western part of the country, with its total estimated mineable reserves of 1400 Mt (which is approximately 37 Tcf of natural gas in terms of heat value) seemed to have solved this problem.


Considering that many countries in the world have between 40 percent to 60 percent of their electricity generation using coal, Government of Bangladesh should take prompt action for a rapid increase in generation of coal fired electricity, which will ultimately have the effect of enhancing the energy security of the country.


Future power plants in the country may be set up on dual fuel system using coal and gas for the sake of better energy security. This would save and conserve Bangladesh's reserve of natural gas, and prevent the dependence on oil import for power generation.

Coal production should be at such a rate that its availability in the country for a period of at least 50 years can be confirmed.

China, manufacture small-scale power plants in the range 3 to 5 MW operating on coal, and these technologies can also be promoted in our country for electricity supply in remote and rural areas.


It is important to understand the environmental impacts of mining, processing, and utilization of coal.

The choice of mining method is largely determined by the geology of the coal deposit. Underground mining currently accounts for about 60 percent of world coal production, although surface mining is more common in several important coal producing countries like in Australia where it accounts for about 80 percent, in the US 67 percent. In India also surface mining is given importance. Surface mining or opencast mining is only economic when coal seam is near the surface.


Opencast mines damage a large land surface area, displace people from their ancestral homesteads and cause agricultural losses. But the method is cost effective, recovery is high around 90 percent, comparatively better in safety aspects and is considered to be a modern method.

Surface mining requires large areas of land to be temporarily disturbed. This raises a number of environmental challenges, including soil erosion, dust, noise and water pollution, and impacts on local biodiversity. But modern technology considerably reduces these problems. The idea is to select proper technology.


Mine subsidence can be a problem with underground coal mining, whereby the ground level lowers as a result of coal having been mined beneath. Steps are taken in modern mining operations to minimise these impacts. Good planning and environmental management minimises the impact of mining on the environment and helps to preserve biodiversity. Computer simulations can be undertaken to model impacts on the local environment. The findings are then reviewed as part of the process leading to the award of a mining permit by the relevant government authorities.


Whether coal is to be extracted by Opencast or by Underground methods of mining the selected method is to acknowledge the need to reduce environmental impact and to provide security of supply, deliver environmental and social goals and promote competitive energy markets.

Environmental issues related to coal processing include water quality issues such as acidic drainage, slurry impoundment discharges, physical disturbances, and gob fires.

The environmental impacts of coal use, mostly for electric power, include harmful emissions and solid waste disposal. Emissions of concern include sulfur and nitrogen oxides that lead to acid rain; particulate matter that causes haze; mercury and its health impacts; and carbon dioxide as greenhouse gas and its potential to change climate.

Methane (CH4) is a gas formed as part of the process of coal formation. It is released from the coal seam during mining operations. Methane is a potent greenhouse gas. Methane from coal seams can be utilised rather than released to the atmosphere.

mixed bag today ! intresting week ahead !

This is looking a tad silly, almost 10% down on just 48K shares traded. ?!?!

Better....

I did top up, no matter how hard you research the situation it remains a gamble - but the risk/reward is still worth it imo !! (at the mo)

some positive trading/buying today !!

Bangladesh welcomes large scale foreign investment



Chief Adviser Dr Fakhruddin Ahmed Monday said Bangladesh welcome large- scale foreign direct investment in infrastructure projects to accelerate socioeconomic growth in the country.

The remark came when Vinod K Mittal, managing director of UK- based Indian Mittal Group, who called on the Chief Adviser at his office, showed keen interest to invest in various sectors in Bangladesh.

Dr Fakhruddin said the liberal investment policies of Bangladesh coupled with low cost and competitive resources base made the country very attractive for FDIs in a number of sectors.

He expressed the hope that Bangladesh would be able to derive synergic benefits from the rapid economic development that has been taking place in neighbouring India and China through joint venture in the public and private sectors.

During the meeting, VK Mittal showed interest to invest in various sectors of Bangladesh including energy, power generation, coal mines development, infrastructure and hospitality industry.

He appreciated the peaceful and highly favorable investment climate now prevailing in Bangladesh and looked forward to working with the Bangladesh government in different areas.

Mittal was accompanied by Javed Pasha, director of Mittal Group and former minister of Pakistan.

Secretary of the Chief Advisers Office Kazi M Aminul Islam and executive director of Board of Investment (BoI) Nazrul Islam were also present on the occasion.