GCM Resources Extends Memorandum For Phulbari Project Development

Tue, 14th Apr 2020 17:57

(Alliance News) - Mining and energy firm GCM Resources PLC said Tuesday it has agreed to extend the memorandum of understanding with Foreign Engineering & Construction Co Ltd and Power Construction Corp of China Ltd for a further six months, in view of the current coronavirus disease pandemic.

Foreign Engineering & Construction is part of state-owned China Nonferrous Metal Industry.

GCM said that significant progress has already been made with both companies, and the extension allows for enough time for a strategic partnership to be established.

Under the memorandum, which was first signed in July, 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 Phulbari coal project in Bangladesh, which includes both a mine and power station.

"Whilst the Covid-19 pandemic has delayed our progress with the project, we believe that it has encouraged the government of Bangladesh to review and enhance its energy security by utilising local fuel sources, following supply and importation disruptions. This supports our strategy 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," said Executive Chair Datuk Michael Tang.

"We are also pleased to report that a large part of the process towards finalising our strategic partnership with NFC and PowerChina has been completed. Both NFC and PowerChina are highly respected global companies, and in becoming strategic partners to the Project, will add tremendous strength and credibility to our proposal," Tang added.

Shares in GCM Resources closed 29% lower at 15.00 pence on Tuesday in London.

By Dayo Laniyan; dayolaniyan@alliancenews.com

GCM Resources