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(Alliance News) - GCM Resources PLC on Monday announced extensions to strategic partnership talks for the Phulbari coal project in Bangladesh.
In July, London-based GCM signed a memorandum of understanding with Foreign Engineering & Construction Co Ltd and Power Construction Corp of China Ltd, or PowerChina. Foreign Engineering & Construction is part of state-owned China Nonferrous Metal Industry.
The two Chinese partners would help GCM, which is 18%-owned by London-listed Polo Resources Ltd, develop the 572 million tonne coal resource at the project, which includes both a mine and power station.
The MoU has been extended for another three months, GCM said Monday, while a joint venture agreement with PowerChina has been extended by 12 months to January 2021. PowerChina has signed an engineering, procurement, and construction contract for the project.
GCM Executive Chair Datuk Michael Tang said: "The extension of the MoU with NFC and PowerChina to develop the proposed coal mine is another important milestone in the project's development. Our strategy is to become an impact project for the people of Bangladesh, providing low cost and sustainable electricity in-country, by combining the company's coal mine proposal with mine mouth power plants generating 6,000 megawatts.
"Both NFC and PowerChina are highly respected global companies, and in becoming strategic partners to the project, will, in the board's view, add tremendous strength and credibility to our proposal."
He continued: "I am delighted PowerChina and GCM have been able to agree to extend the joint venture and EPC contract, and would like to express my sincere thanks to the PowerChina team for the enthusiasm shown in our partnership to date. The spirit in which both parties have worked together is a strong sign of a positive, long-term partnership."
GCM shares were 2.2% lower on Monday morning in London at 13.45 pence each, though did hit 15.40p in earlier trade.
By George Collard; georgecollard@alliancenews.com
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