Polo RNS re GCM20 Dec 2019 20:42
GCM Resources Plc ("GCM")GCM is on track to provide the cheapest long-term large-scale coal-fired electricity supply in Bangladesh and the country's position regarding coal-fired power was reinforced recently by the Bangladesh Government Power Secretary in an interview with the Thomson Reuters Foundation. He stated that Bangladesh's economy is growing fast and it needs energy and that they had no choice but to utilise coal for power generation. The Phulbari coal mine's Scheme of Development remains a key driver, however, the ultimate deliverable requires the mine being captive to 6,000 MW of state-of-the-art highly energy efficient Ultra-Supercritical power plants ("the Project"). The mine's viability would then become dependent on coal supply agreements with these power plants and vice-versa, the power plants' viability is linked to the success of the coal mining operation. GCM already has in place strict environmental management plans for the planned mining operation, and has stated it will ensure these power plants also operate to the highest possible environmental standards and in particular that they will avail of leading-edge flue gas cleaning systems to protect air quality and cooling systems that minimise water consumption. GCM had previously reported signing a Joint Development Framework Agreement and Contract Framework Agreement with China Gezhouba Group International Engineering Co Limited ("CGGC") for constructing of one of the required three power plant phases (each being 2,000MW mine-mouth power generation) to be implemented over a ten-year period matching the mine's coal production ramp-up to 15 mtpa name-plate production. During the reporting year GCM addressed the shortfall in power generation necessary to underpin the captive coal mine's viability by entering into Joint Venture Agreements ("JVA's") with Power Construction Corporation of China Ltd ("PowerChina"), another China state-owned key enterprise that is a world-renowned megacorporation spanning engineering construction and power generation. The JVA's were the culmination of a Project site visit with senior PowerChina officials, their completion of a prefeasibility study and due diligence for 4,000MW mine-mouth power generation. Working under the JVA's GCM and PowerChina have prepared the detailed proposals for the 4,000MW Phases I and II power plants, complete with a competitive power tariff. In order to complete its proposal for the Government of Bangladesh the company is also seeking to bring in a strategic mine development partner. To this end in July 2019, post the reporting period, GCM signed an MOU with both China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. ("NFC") and PowerChina focussed on the mine development. NFC are in the process of completing their due diligence studies. Once these studies are
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