Member Info for Pappiklon

Funding for Coal Projects
On a similar theme we sometimes get those stating that funding for coal fired generation is not happening. Well based on the article below, itself from a ECO publication (so it must be true)- according to coalexit.org funding for coal projects has actually increased since the 2016 Paris Accord.

'While Chinese banks account for less than 6% of total lending to the coal industry, they account for 58% of underwriting. Through their underwriting, Chinese banks channeled US$ 467 billion to the coal industry over the past two years. Next in line are US banks (US$ 104 billion), Japanese banks (US$ 59 billion), Indian banks (US$ 36 billion) and UK banks (US$ 35 billion)'
https://coalexit.org/sites/default/files/download_public/Financing%20GCEL%202020_Press%20Release_urgewald.pdf

This post is just to reflect what is really happening rather than what some would have us believe, however it's unlikely with NFC and Power Chinas' commitment to the project there will be any issue re funding the project itself

17 March 2021
GCM Resources plc
("GCM" or the "Company")

Project Update

GCM Resources plc (LON: GCM), an AIM quoted mining and energy company, is pleased to provide an update regarding the Phulbari Coal and Power Project (the "Project") and our Development Partners.

From communications over the past few days, our Development Partners have reaffirmed their commitment to progressing the Project and have acknowledged that the global COVID-19 pandemic had impacted their ability to meet timelines over the past year.

China Nonferrous Metal Industry's Foreign Engineering and Construction Co. Ltd ("NFC"), one of our Key Development Partners, have confirmed they are moving to resume a normal working status and that they are gearing-up to make progress on commitments for coal mine development as set out in the Framework Agreement signed between the parties on 15 October 2020.

Power Construction Corporation of China, Ltd ("PowerChina"), have additionally confirmed and re-iterated their strong commitment to the Project and to making progress under the extended JV Agreements, as announced on the 19 January 2021. PowerChina are focused on working with the Company to develop the Project using the most advanced mining and power generating technology, while adhering to the strictest compliance of health, safety and environmental standards. Their stated aim is to produce clean and sustainable energy and power for Bangladesh.

Michael Tang, CEO of GCM, commented: "We are pleased our relationships with NFC and PowerChina are reaffirmed and that despite the difficulties over the last 12 months both locally and globally, they are taking steps to progress their involvement in the coal mine development which is a cornerstone development for the Project."

"I would like to thank the teams at NFC and PowerChina, for their dedication and continuing support, particularly during this global crisis, towards delivering the Project to the Government of Bangladesh, its people and our stakeholders."

Was just thinking about how endless PR from vested interests and lobby groups can get through even when u think you have a pretty solid opinion. Over the past 6 months or so there has been a lot of mentions in various countries press (not just BD) about how China was moving away from coal, would not allow non green projects in the belt and road initiatives. Well I came across this article today in the New York Times, very interesting reading, as are the comments about size of coal generation in China and its coal mines feeding them...yet even with their huge coal resources they are importing coal on a massive scale (one of the reasons BD is having to reconsider some of those coal fire plants that were going to operate on imported coal is because China has bought up all the output from Indonesian coal mines for the next 3 years see references in previous posts). So of late I begun to wonder were theses big Chinese Mining and Energy Generating companies going to have to tone down Coal powered electricity in emerging countries, well this article would indicate that China has no intention of stopping or even slowing coal fired generation any time soon, and if they aren't doing it at home they ain't going to be lobbying it anywhere else either. One thing they are on top of is better technology to reduce coal power emissions.
see attached link.
The Paris Accord allows leniency for developing nations, lenience on CO-2 and China, as massive as its output is, still falls within those allowances. Bangladesh is massively within .
I feel much more confident now than ever that this will go ahead in conjunction with our huge Chinese Generation and Mining partners

https://www.nytimes.com/2021/03/16/world/asia/china-coal-politics.html?campaign_id=51&emc=edit_mbe_20210317&instance_id=28143&nl=morning-briefing%3A-europe-edition®i_id=131858846&segment_id=53571&te=1&user_id=f4984661c13fd7b4911e4959522cf0a6

If theres a problem reading the article let me know and I'll cut and paste.

Daily Sun 26th Feb

Meanwhile, State Minister for Power and Energy Nasrul Hamid told the Daily Sun that the government will review coal-fired plants next month. (he is referring to unbuilt coal power plants that depended on imported coal)

He said the procurement of coal is the main problem as Chinese companies have already leased out most of the coalfields in Indonesia.

Besides, the production of local coal at Barapukuria will come down within the next four years, he said, adding that the government will go for an extension of the Barapukuria to its north.

The minister also said coal extraction in Dighipara is not feasible. (this is a very deep seam that is consequently unfeasible)

After years and years of reading press articles I have had to conclude that they rarely paint the whole picture - especially in Bangladesh - the content is often cherry picked from other articles - many of which originated in publications that have an agenda - environmental, activist, marxist are the main contenders. The one above came from an article that was making reference to a Greenpeace report....

A reminder of the country's ever dwindling energy options, using own coal would appear to be the only one ready to go after they discovered that they couldn't buy coal from Indonesia the next 3 years supply was already bought up by China so where they going to get it, LNG prices volatile and soaring. Article from 6th March.

https://ep-bd.com/view/details/news/MTUyOA%3D%3D/title?q=energy+import+bill+in+2030+will+stand+at+us%2420+billion

Serves as a reminder how much this can move on relatively small volume, nice to see it being allowed to rise - little interest from holders to sell..... lots of news due and hopefully on the horizon.

Yup, all duly passed, expect another RNS in the next week on who is getting the shares and at what price, once they have filled their pockets then there should be the biggies to follow.

AGM should be over now. Been interesting to watch the market as we are held down here to provide a lower base at which to issue the new shares. I have put in dummy buys up to 100k shares and every time they are prepared to fill at below the ask. Once the new shares are issued, and if there is a take up agreement already in place whats the betting it will be Michael Tang, Polo or a Malaysian party that takes them. I understand the desire to get them as cheap as possible which could be seen as a negative, but a much bigger positive in my opinion would be the eagerness of parties to hold even more shares in the company as you don't do that without the belief the project is going to go ahead. Being a holder I am of course going to be looking for positives

If you hold real shares and want to vote on the resolutions at the AGM you need to get in touch with your broker and convey your proxy votes very soon, they normally ask for 10 days before the AGM as they have to be received by the company before 10am on 23rd, So if you are voting through your broker today could be your last day to vote.
Barclays will do it over the phone, IG needs the form scanned and emailed to them, other providers you will need to ask them.
The Proxy form and resolutions can be found here:
http://www.gcmplc.com/corporate/corporate-governance

Coal Power Generation Company Bangladesh Job Circular 2021 Has Been Published in Daily Newspaper The Independent also to get from BD Jobs Careers. The Coal Power Generation Company Bangladesh Limited (CPGCBL) an enterprise of the Government of the People’s Republic of Bangladesh, is a public limited company registered under the Companies Act, 1994 on 5th September 2011. The main objective of the Company is to generate electricity based mainly but not solely on Coal as fuel. In this regard, the Company will undertake any scheme for construction of Power Plant under the Private Sector Power Generation Policy of Bangladesh, Public-Private Partnership (PPP) Policy or any other Policy Framework of the Government. Recently The Coal Power Generation Company Bangladesh Limited Looking New Man Power In recent The Coal Power Generation Company Bangladesh Limited Hire Various Position Man Power. The Job Title Name Executive Engineer (Civil), Deputy Manager (Environment, Safety & TQM) and Assistant Manager (Environment, Safety & TQM). Here To See The Coal Power Generation Company Bangladesh Limited Job 2021. You can see here that job full details

https://www.agambarta.com/coal-power-generation-company-bangladesh-job-circular-2021/

LNG prices have increased by 1000 percent since record lows of April 2020

Wow, that must have made them sit up and think ! So much for all those LNG imports and LNG power plants...what might part of the solution be...

Ahhh the conundrum.
Why would they only seek the authority to raise £800k in new shares if its 8 months cash burn - when this motion is passed that is the max raise they can do this way before next AGM, in addition they would factor in a contingency, so lets say 6 months...if thats the case does this mean they don't forsee needing more than 6 months operating cost...does this mean they think we won't be needing to raise any more cash in 6 months...that we are then sorted, approval will be granted, that we are being bought out etc

The second question, this is the authority to raise up to £800k through the issue of new shares, they might only look for £300k initially, another £300k later etc, they don't have to raise it all in one go, if they thought they were going to need more before the next AGM they would be seeking authority for a higher amount so it's not because thats the most they think they can raise, and why £800k I'm pretty sure if they had said £1m or £1.2 m the motion would still have passed .

If it was real shares none of this reorganisation would make any difference and probably wouldn't on spread betting either but I don't do SB's or CFD's these days, you need to ask your provider as those guys have some bespoke rules...which tend to favour them as I once found to my detriment.

Sorry forgot to say if you started with 10 shares you will still have those 10 shares and the market value will stull be the same it wont suddenly go down to 1p

No. Your original shares still have the same market value.
When a business is set up and the decision to issue shares is made they are given a nominal value, in gcm’s case this was 10p, because of that they cannot issue new shares at a value below that 10p . This reorganisation is simply a way to correct that so, if needed, they can issue more shares and raise money at a price under 10p

They are only looking in the resolutions to add max shares to raise £800k , thats the maximum, and it will depend on how many shares at what price and when. this from the 2021 AGM resolutions...
To authorise the directors to allot relevant securities up to an aggregate nominal amount of £800,000

Personally think there is a whole new vibe around the company , it's communications and openness, suspect the price may rise from here just based on the new ethos of shareholder engagement alone. A bit of good news and the price hits 20p thats only an additional 4m shares. Disclosure: I hold shares so my take is going to be bullish everyone else free to make their own mind up. P

Weird posted this earlier but not showing.
The corporate governance page on the companies website has now been updated with proposed new articles etc, maybe because I added a link to the page

The Corporate Governance page on GCM website has now been updated with the proposed new articles etc
http://www.gcmplc.com/corporate/corporate-governance

The other way round ‘EU says travel bans from the UK should be discontinued’ source bbc breaking new

Extract from Observer article...
https://www.observerbd.com/news.php?id=289318
Coal based power project always prefers a secured and steady supply of coal at competitive cost. Underground mining in Bangladesh fails to deliver such supply security and thus fails to attract potential investor to setup large coal fired power plant based on domestic coal. Barapukuria Mine, which had all the potential to support large scale power generation, is now even struggling to feed only 525 MW mine mouth power plants. This is just a 'lost opportunity' for the country because of choosing inappropriate mining method.

Open cut option to deliver: Then what is the best option for Bangladesh to mine its limited valuable coal resource? A close look at Phulbari open cut mine plan is worth useful at this point when underground mining is considered not to be feasible and cost effective.

Phulbari has an in-situ resource of 572 MT of high-quality bituminous coal. The proposed open cut mine plan sets the target of recovering 475 MT of ROM coal, which represents about 83% of the total resource. The mine with such high amount of recoverable reserve could potentially be the powerhouse for country's primary fuel supply and bring a balance between import and domestic coal supply mix. Just imagine how many Barapukuria size mine requires to match with the coal recovery of Phulbari open cut mine!

Open cut mining in Phulbari is expected to deliver reliable and stable supply of large quantities of coal (15 Mt/annum at full production rate) for a period of over 30 years. The cost of production, reported to be less than US$50/tonne, is far lower in comparison to that of underground mine options. This is an attractive proposition for any large-scale power generation project where long term fuel supply is ensured, coal quality is consistent, and price is competitive. A study revealed that the Phulbari mine production alone can support generation of 6000 MW of electricity using latest ultra-supercritical plant technology, which represents a third of country's projected coal fired power generation target (19,000 MW by 2041). This is how open cut mining makes the difference - in terms of resource recovery, supply security and power generation potential.

Bangladesh needs coal to meet its planned coal fired generation target. However, it is always a preferred and cost-effective option to use domestic coal, either entirely, or in part to supplement import sources. But domestic coal supply so far seems uncertain because of poor outcome of underground mining: the recovery is poor; cost of production is high and thus not feasible and cost effective for power generation. Now it is time to look into the other mining options- the Open Cut Mining, which offers better economics, supply stability and reliability over the longer period. The Phulbari mine plan presents the opportunity to compare how open cut mining in similar geological setup could deliver best for the country.
Zubayer