Member Info for Pappiklon

Sometimes I wonder if people even read the RNS fully, considerable cashflow way before first coal...

The scope of works under this Mine Construction Contract includes design, procurement, installation, construction and commissioning of mine infrastructure and overburden removal, dewatering and drainage. It also includes selective mining and stockpiling of valuable industrial mineral co-products that occur in the overburden. These co-products are expected to deliver considerable cashflow for the Project ahead of any coal extraction.

Coal Supply Expressions of Interest:

The Company has received Expressions of Interest to purchase Phulbari's coal from both of Bangladesh's current Independent Power Producers, being SS Power Limited that operates the 1,320MW Banshkhali power plant and Barisal Electric Power Company that operates a 350MW unit at Barisal (with plans to add an additional unit). These represent some 27% of the present market.

Bangladesh currently has 6,035 MW of installed coal-fired power generating capacity with a demand for some 16 million tonnes of coal per annum, i.e., equivalent to the Phulbari coal mine's planned production. However, the long-term government plan shows an increase in coal-fired power to 11,830 MW which would require some 36 million tonnes of coal per annum.

The current coal-fired power plants include:

· Existing Barapukuria plants 525 MW

· Payra 1,320 MW

· Rampal 1,320

· Matarbari 1,200 MW

· S ALAM Banshkhali 1,320 MW (Independent power producer SS Power)

· Barisal 350 MW (Independent power producer Barisal Electric Power Company)

11 March 2024

GCM Resources plc

("GCM" or the "Company")

(AIM:GCM)

Phulbari Coal Mining Infrastructure Construction and Overburden Stripping Contract

The Company advises that working under the coal mine development MOU with Power Construction Corporation of China, Ltd. ("PowerChina") (refer to RNS of 28 November 2023), it has signed a contract with PowerChina International Group Limited covering mine development works of approximately US$1 billion necessary to facilitate coal extraction at the Phulbari Coal and Power Project ("the Project"). The advancement of this Contract is subject to receiving the approval of the Scheme of Development for coal mining submitted to the Bangladesh Government under the terms and conditions of its Contract for "Exploration and Mining Coal in Northern Bangladesh".

The scope of works under this Mine Construction Contract includes design, procurement, installation, construction and commissioning of mine infrastructure and overburden removal, dewatering and drainage. It also includes selective mining and stockpiling of valuable industrial mineral co-products that occur in the overburden. These co-products are expected to deliver considerable cashflow for the Project ahead of any coal extraction.

The Mine Construction Contract duration is four years, with overburden removal to expose first coal taking some two years. The Company and PowerChina expect to enter additional contracts covering coal extraction and associated activities to support ongoing open pit mining operations and the Project's commitment to deliver high quality coal supporting at least 6,600MW power generation for over 30 years. A joint proposal with development partner, PowerChina, will shortly be presented to the newly elected Bangladesh Government.

The Mine Construction Contract was entered into on 9 March 2024, however, issuance of a Notice to Proceed with the works is dependent on the Company receiving the necessary approvals from the Bangladesh Government and achieving financial closure. As noted in the beforementioned RNS of 28 November 2023, our development partner, PowerChina is committed to assist with project financing.

Coal Supply Expressions of Interest:

The Company has received Expressions of Interest to purchase Phulbari's coal from both of Bangladesh's current Independent Power Producers, being SS Power Limited that operates the 1,320MW Banshkhali power plant and Barisal Electric Power Company that operates a 350MW unit at Barisal (with plans to add an additional unit). These represent some 27% of the present market.

Bangladesh currently has 6,035 MW of installed coal-fired power generating capacity with a demand for some 16 million tonnes of coal per annum, i.e., equivalent to the Phulbari coal mine's planned production. However, the long-term government plan shows an increase in coal-fired power to 11,830 MW which would require some 36 million tonnes of

Think this is one of those things that you may have waited years for and then when it happens you kind of go into denial about...can it really be happening..The article posted this morning clearly shows that what Gary said at the AGM is happening the Task Force the Energy Minister set up is reporting that it’s goer and Nasrul is going to take it to the PM.

‘For this,the energy department is taking a detailed proposal to the Prime Minister. It will include everything from how to manage groundwater, resettlement of locals, making the land cultivable after extraction’

‘State Minister for Energy and Mineral Resources Nasrul Hamid said that coal mining will be done by ensuring underground water management. Rehabilitation and employment of the locals will also be ensured. He said that if there is a coal mine in that region, crop production will decrease by BDT 5 thousand crore annually. On the contrary, coal worth about BDT 70 thousand crore will have to be imported in the future’

I have also seen the Bara Annual report where it is stated in order to do OP at Bara it will take 3 years to complete the Feasability studies and 8 years to get to first coal, I also am aware from that report that their licence to mine underground ends in 2027 and that as compensation for having to let go of Bara from 2027 they have awarded the licence to exploit the very deep Jamalganj to BCMCL (bara operators), this would fall in line with Garys comments about back pedalling into Bara from Phulbari.

I see this as the initial newsflow of what’s coming

GCM has submitted a full feasibility study on the

mine development to the government.

The largest coal mine in the country is at Jamalganj in Joypurhat. 545 million tons are deposited here.

105 million tons can be extracted. A study was conducted in 2016 on coal bed methane extraction.

This method is considered not to be commercially viable. However, re-survey is suggested for

underground approach in north-eastern part. According to the hydrocarbon unit, the underground

gasification method is suitable for this mine.

Open pit mining and water management

According to the Hydrocarbons Unit of the Energy Department, mine development takes 4-5 years

for underground method and 2-3 years for open pit method. Therefore, if the government wants to get

the benefits of domestic coal in this period, it should take a quick decision. In this case open pit

mining at Barapukuria and Phulbari will be most profitable. But the main problem will be the

acquisition and rehabilitation of huge agricultural land and the management of underground

reservoirs.

Agriculture and forestry

Phulbari mine area has 4162 hectares of agricultural land, 195 hectares of forest land, 81 hectares

of wetlands and 666 hectares of settlements. It produces 3-4.5 tons of rice per hectare, 20-23 tons

of potatoes, 3-3.5 tons of wheat, 10 tons of corn and 1 ton of pulses. According to the hydrocarbon

unit, 2 thousand hectares of land will be required at a time in Phulbari for mining. After the mining of

coal, within 3-5 years, the land will be reclaimed and made suitable for agriculture. The land to be

rehabilitated in the mining area after coal extraction will be agriculture 2 thousand 550 hectares,

forest land 1 thousand 946 hectares and wetland 696 hectares. According to the unit, the extracted

coal and other minerals will be 20 times more profitable than conventional agriculture in the mining

area.

Compensation for the Project

According to Hydrocarbon Unit, Phulbari mine area will be 54.8 sq km. Population 46 thousand 500.

Their rehabilitation will last for 10-12 years. A model town will be built in the western part of Phulbari.

Agriculture can be carried on till mining on the acquired land. This rehabilitation plan will cost 1

billion dollars.

Mining financial resources

Phulbari will yield 470 million tons of coal worth USD $83 billion along with other resources worth

$17 billion. Barapukuria South and Phulbari open pit mining together can produce 62 crore tonnes of

coal. 70-80 percent of the country's coal demand will be available. This will save $4 billion dollar

annually.

Country. As much as can be done in the underground system, we have to move towards that.

Energy expert Prof. M Tamim said that the government already delayed in the the decision to extract

coal. Big financial institutions are not investing in coal mine development now. But many coal

companies will invest . Good negotiation is required for this. Earlier the government was in a strong

position. Now if the government moves forward, the companies will take the opportunity. However,

initiative is needed. However, first of all, a third-party survey should be conducted regarding

groundwater management. If the result is positive then coal should be removed.

State Minister for Energy and Mineral Resources Nasrul Hamid said that coal mining will be done by

ensuring underground water management. Rehabilitation and employment of the locals will also be

ensured. He said that if there is a coal mine in that region, crop production will decrease by BDT 5

thousand crore annually. On the contrary, coal worth about BDT 70 thousand crore will have to be

imported in the future.

Five mines in the country

According to the Bureau of Mineral Resources Development, the number of coal mines discovered

in the country is five. Four discoveries were made by the Directorate of Geological Survey. Among

them, coal mining started in 2005 from Barapukuria in Dinajpur. About 39 million tons of coal are

deposited in this mine. 20 crore tonnes of recoverable reserves. The reserves in the northern and

southern parts of the mine are estimated at 17 million tonnes, which can be mined by opencast

method. At present, coal is being mined from the middle part trough underground method. Only 2

crore tons of coal can be extracted trough the same method. 8-10 lakh tonnes of coal is now being

mined annually from Barapukuria, which runs a power plant. Survey of open pit coal mining in

northern part of Barapukuria is under process.

The reserve of Dighipara coal mine in Nawabganj of Dinajpur is 70 million tons. Extractable reserves

are 9 crore tonnes. 3 million tons of coal per year can be mined here through underground method.

Barapukuria Mine Authority has submitted a full feasibility study of Dighipara to the government.

Rangpur's Khalaspir has coal reserves of 50-69 crore tonnes. Extractable reserves are 8 crore tonnes.

Up to 4 million tons of coal can be mined annually by underground methods.

Australian company BHP Minerals discovered a coal mine at Phulbari in Dinajpur. UK-based

company Asia Energy wanted to mine coal in an open-pit method here. In 2006, the government

withdrew from that plan in the face of the movement. The reserve of the field is 57 million tons.

Extractable reserves are 47 million tons. It is possible to extract coal from this mine by the open pit

method. This mining license is now in the hands of the multinational company GCM. A majority stake

in GCM is said to be owned by a Chinese company. GCM has submitted a full feasibility study on t

Recently, the Hydrocarbon Unit presented a presentation to the Energy Department on domestic

coal. It is said that the demand for energy in the country is increasing. Gas reserves are running low.

As a result, the pressure on coal-based power plants will increase. Importing coal to meet the

demand of the power plant will require 6 billion dollars a year in the future. Currently, the dollar crisis

is disrupting fuel imports. The generation of power plants was almost stopped due to coal shortage.

If domestic coal is guaranteed, the pressure on the dollar will be reduced and energy security will be

ensured. According to a presentation by JICA, Japan's international cooperation agency, which

prepares the master plan for the power and energy sector, the amount of coal reserves in Bangladesh

is 7.8 billion tons, which is equal to 200 trillion cubic feet of gas. If 10 percent is extracted 20 TCF will

be available. Domestic coal can offer many benefits. Apart from creating employment, it can play a

role in controlling fuel prices and reducing import dependency.

Chairman of Petrobangla Ganendra Nath Sarkar said that the issue of coal extraction from the new

mine has not been finalized yet. Coal gasification in Jamalganj, open pit mining in Barapukuria and

coal mining in Dighipara are being surveyed. A complete result will be presented before the Prime

Minister.

Anu Muhammad, member secretary of the National Committee for Protect Oil-Gas, Mineral

Resources said, coal-based power plant is a wrong decision. The results are now available. The

environment is being damaged, the economy is also under pressure. If coal mining is undertaken, it

will be a more disastrous decision. Locals gave their lives to protect themselves. So he hopes that

the government will not take this stubborn decision.

Geologist Badrul Imam said that it was necessary to come to a decision about coal extraction.

Because the demand for coal has increased, it will increase further. There will be no energy security

if we are totally dependent on imports. He said that coal cannot be mined in the open method in the

Original Bangla News Article and Google with translation following

https://samakal.com/bangladesh/article/226409/বড়পুকুরিয়া

Initiative for extracting coal from

Barapukuria-Phulbari through open pit mining

Daily Samakal_ 07March 2024

The number of coal based power plants in Bangladesh has increased. Coal power generation

capacity under construction and in operation stands at 11 thousand 329 MW. This power generation

will require a total of 33.6 million tonnes of coal annually. Only 1 million tons of coal is mined annually

from Barapukuria. Unless new mines are opened, almost the entire coal requirement will have to be

imported. It will cost 6 billion dollars.

The sector stakeholders say that the energy of the country is becoming dependent on imports day by

day. This is increasing the pressure on the economy. The Dollar crisis also added to the situatioin. As

a result, a big crisis has been created with energy security. Therefore, the government has

emphasized on extraction and exploration of domestic energy. In this context, the energy department

has started thinking about the country's coal mines. Among the country's five coal mines, there are

plans to extract coal by open pit method at Barapukuria and Phulbari, underground method at

Khalaspir and Dighipara and coal gasification method at Jamalganj.

There is a debate about the method of extracting coal from mines for a long . There was a big

movement against open pit coal mining from Dinajpur's Phulbari mine. Casualties also occur. After

that movement in 2006, the issue of coal extraction from domestic mines was suspended. According

to environmental movement activists opposed to coal mining, mining will destroy agricultural land in

the area, destroy groundwater management and pollute the environment. Prime Minister Sheikh

Hasina has also said several times that coal will not be mined by damaging agricultural land. For this,

the energy department is taking a detailed proposal to the Prime Minister. It will include everything

from how to manage groundwater, resettlement of locals, making the land cultivable after extraction

of coal.

For thise that dont know DG is being paid as lobbyists,

‘ DG will provide the company with advisory, management, lobbying and consultancy services.’

Wasnt expecting that RNS. Would suggest to me something big going to happen

The broker who did the 500k raise bought £10k shares.

Keith the finance director took £10k of shares in lieu of cash but the real biggy is DG who have drawn down 4.3m shares at a price of 4.125 pence, they could have had double that amount a few weeks back so they must be mega confident something big is about to happen.

Up early Searcher!

''change hints at the government's willingness to keep fossil fuel use, especially of coal, alive''

Maybe he was checking the money for Power China was in place :-)

The question was asked about what approval would look like, Gary responded with some history which included that back in 2006 the mine was so attractive it became coveted and political, then there was a coup and a caretaker government which meant nothing could happen. We are in the regulatory process, he raised the point what does approval actually mean, it doesn’t have to have someone to get up and approve it, it just needed someone to say make sure the regulatory process started again properly and that’s where we are now. The SOD (Scheme of Development) is what covers the mine, that is paramount, all the work has been done on that, everything else re power stations, infrastructure will follow on from that.

My read of that was the political impediment has seemingly been removed and it is now being processed, anyone else who was there care to comment, again IMHO only

Further comments from Gary around Phulbari and Bara were that there was potential when Phulbari is mined to back pedal onto Bara, also that 90% of big projects in BD are funded and implemented by Chinese companies, that Power China is primarily a construction Company and most of it’s projects in Bangladesh are would be considered government to government and that it is fundamentally a Government entity, They have the ability and power to fund huge projects, in this case they are interested not just in building a power station but also the mine development and infrastructure needed to service ii. The mine is the most important element and the infrastructure second and PC is used to doing these sort of projects, On the Power side after building the power station he said they would be supplying the cheapest electricity in the country due to lack of transport of the mines coal to that plant.

He also mentioned that Hasina herself late last year had made statements in the media asking for new strategies including for coal and gas his comment was ‘persistence will overcome resistance’

So following on from GrimUpNorthNE’s post yesterday about Bara and their coal and licence running out in 2027, it does mean that if we were given the go ahead to open pit mine at Phulbari shortly, we could just about be up and running to supply coal in time for when they stop underground mining due to running out of coal using the underground method. As I understand it, open pit mining would start at the northern end of Phulbari and then in time both the Phulbari and Bara coal seams would join via open pit mining method, which means both areas would then use the highest percentage of coal possible of up to 70 to 90% whereas underground mining is only about 30 to 50%, so it would be the most efficient way possible of extracting their own resources of coal from both areas .

See the link below from 6th June 2023

A coal mine hardly exploited and then what?

But the plant officials are not sure about the guaranteed supply from nearby Barapukuria coal mine beyond 2027 when the existing approval of mining will expire.

Authorities, however, have said exploring more coal from the local quarry is not in their mind now.

Mohammad Hossain, director general of the Power Cell, a policy-making wing of the Power Division, stated that they are not currently considering this matter.

The future operation of the power plant, however, seems uncertain as the mining company practically has no approved plan for coal production after 2027.

Besides, the mine's central part, which has been supplying coal since 2005, will run out of the reserve within the next four years, said officials concerned.

He stated that the coal mine authorities cannot guarantee coal supply after 2027.

Exploring alternative coal mining options

"We have two coal mines near the existing one – Phulbari and Dighipara coalfields in Nawabganj -- as options in our planning. We can proceed with one of these if we get approval from the highest level, though these mines are at very preliminary stages," he said.

https://www.tbsnews.net/bangladesh/energy/coal-mine-hardly-utilised-and-then-what-656878

Well as we know, Phulbari is the only mining area that is ready to go, with all feasibility studies, including resettlement areas agreed and discussed with the people of Phulbari, so realistically if the government of Bangladesh are going to use their own resources, Phulbari is the only mine that can start mining quick enough to meet their requirements! Imo of course …

More to follow on this from AGM notes

Thanks Searcher for a very accurate and concise report. It was good to see you and some of the other shareholders and contributors to this board there too. I have been to many GCM AGM’s and this was by far the most vibrant, informative and open one of them all.

I did pick up what I considered a significant bit from Gary in response to a question of ‘what is different this time’ from another poster on LSE, Gary’s response was that in the latter part of last year as Industry slowed down due to power shortages and society was up in arms about lack of power due to huge outstanding import bills with inflation rampant, currency devaluation and dwindling forex and an inability to pay, that within high level government ministries there has been a huge focus on pushing down on the Energy Ministry to change direction into exploration of the countrys’ own coal and that they have to rapidly change direction.

He also stated that GCM had picked up on the fact that the Energy Minister himself had formed a focus group, within the Energy Ministry, to put together materials for consideration to develop the coal sector including Phulbari, and that the Energy Minister had commented on it being the only practical solution at this time

I was told that the potential non exec who was at the meeting was flying out to meet Tang, I honestly cant remember who said it, it wasnt Gary or Keith though, and there were ongoing conversations with shareholders for over an hour after the AGM finished . It was the most vibrant GCM event I have attended

Agree it’s in the hands of the Nomsds and their due diligence but everything I heard te Neds was positive,

Interestingly as was Christian who was very bullish and forthright in many before AGM and after AGM conversations.

A couple of the ongoing myriad reasons from one paper today whh the BD govt is changing direction on use of it’s own coal, all part of the bigger picture with a fundamental issue that has to be addressed.

https://www.daily-sun.com/post/737061

https://www.daily-sun.com/post/737173