GCM Resources Annual Loss Widens, Focus Remains on Bangladesh Project

25 November 2019 | Morning Star
GCM Resources PLC on Monday reported a widened annual loss as the mining company saw its operating expenses rise.

Shares in GCM Resources closed down 9.3% in London on Monday at 12.70 pence each.

In the year ended June 30, GCM reported a pretax loss of GBP 6.0 million compared to GBP 5.4 million the year before.

GCM's operating expenses rose 16% to GBP 5.2 million from GBP 4.5 million. The company attributed the rise to additional share-based payment arising from joint ventures signed in the period.

The company did not generate any revenue in either period.

"GCM Resources is committed to a strategy of developing the Phulbari coal deposit as a captive, large-scale, open pit mining operation supporting 6,000 megawatts of highly energy efficient ultra-supercritical power generation, which is planned to be developed in three stages, over a ten year period, to complement the planned ramp-up in coal production to the nameplate 15 million tonnes per annum," the company said.

GCM said its progress remains in line with its strategy, describing the development proposal as "robust".

Executive Chair Datuk Michael Tang added: "We believe the actions taken over and beyond the reporting year provide the greatest chance to deliver the value-add our shareholders deserve and provide the government and people of Bangladesh with a long-term, large-scale, low-cost power solution.

"As we now push forward to formally present the project proposals to the government and seek to obtain the necessary approvals, our efforts will be greatly assisted by having appropriate consultants and lobbyists in both China and Bangladesh. I am pleased that we now have agreements with share based payments in place with both Dyani Corp Ltd, covering negotiations in China, and DG Infratech Pte Ltd, a Bangladeshi controlled company, working on the ground with us in Bangladesh."

Power China Delivers PFS Report on Phulbari Power Plants in Bangladesh

07 November 2018 | Power Technology
Power Construction Corporation of China (Power China), the parent company of Sinohydro Corporation, has delivered a Power Plant Pre-feasibility Assessment Report (PFS) to UK-based mining and energy company GCM Resources (GCM) for the construction of additional power plants in Bangladesh.

The report is for further mine-mouth coal-fired power plants at the Phulbari coal and power project site.

In September this year, GCM appointed Sinohydro to conduct a pre-feasibility study and other due diligence for the proposed power plants.

These plants would have the capacity to generate up to 4,000MW at the Phulbari site.

The PFS suggests 6,000MW can be generated from the mine’s thermal coal production ‘using the latest high energy-efficient Ultra-Super Critical power plant design’.

The new power plants in Bangladesh will be in addition to the existing 2,000MW power plant proposal with China Gezhouba Group International Engineering (CGGC).

GCM executive chairman Datuk Michael Tang said: “This is a significant step for the Phulbari Coal and Power Project as it confirms that technically the project is able to support 6,000MW of power generation.

GCM Resources Secures GBP 1.2 Million Increase to Polo Resources Loan

03 February 2020 | Morning Star
Power project developer GCM Resources PLC on Monday said it has secured a GBP1.2 million increase to its existing loan facility of GBP 2.3 million with Polo Resources Ltd, raising the total loan amount to GBP3.5 million.

Under the new revised loan facility, GCM will be able to draw down the GBP1.2 million in equal quarterly installments of GBP 300,000.

GCM plans to use the increase loan facility to progress on its partnerships with Power China, Power Construction Corp of China Ltd and China Nonferrous Metal Industry's Foreign Engineering and Construction Co Ltd for the development of Phulbari coal & power project in Bangladesh.

Shares in GCM were up 6.7% at 12.80 pence each in London on Monday morning. Polo Resources shares were untraded at 3.53p each.

GCM Resources Loss Narrows as Focus Turns to Bangladesh Project

25 March 2020 | Morning Star
Mining and energy company GCM Resources PLC on Wednesday reported a narrowed interim loss on lower expenses.

In the six months to December 31, GCM's pretax loss narrowed to GBP616,000 from GBP1.8 million. Like in the comparative period, GCM generated no revenue.

Pre-development expenditure fell sharply to GBP198,000 from GBP1.4 million and administrative expenses were down 17% to GBP279,000.

GCM said: "It has been a busy period for the company and, despite the macro-economic headwinds I am pleased with the progress made. We have continued to pursue our strategy of presenting a comprehensive power solution to the Bangladesh government, based on a 15 million tonne per annum "captive" coal mine in the Phulbari coal basin.

"We are looking forward to finally presenting the project proposal to the Bangladesh government and progressing the project in the interest of our shareholders and other stakeholders. However, it would be unrealistic to assume the Covid-19 pandemic won't have an impact on our timelines, given that governments worldwide are focused on dealing with the pandemic."

Shares in the company were 4.4% lower at 8.60 pence each in London on Wednesday morning.

Govt Doubles Coal Mining Royalties

13 March 2020 | The Financial Express

The government has doubled the rate of its royalties from coal mining after eight years in a bid to increase revenue. From now on, underground coal extraction companies will have to pay 10-per cent royalties to the government. The rate of royalties was fixed at 5.0 per cent in 2012.

Power, energy and mineral resources ministry has recently issued a gazette by revising the rate upwards. With this rise in royalties, the government would receive higher revenue from coal-mine extraction. Currently, Barapukuria is the only mine supplying coal to the Bangladesh Power Development Board (BPDB). However, Barapukuria Coal Mining Company Limited (BCMCL) managing director Md Kamruzzaman Khan said their earnings would reduce due to a rise in royalties.

The BCMCL, a subsidiary of Petrobangla, sells coal at $130 per tonne to the BPDB. The company's expenditure, including VAT, tax and payment to contractors, stands at $123 per tonne, Mr Khan observed. The margin of earnings is currently $7 and it would reduce further from now on, he added.

"We propose that the government increase the rate of coal that it sells to the BPDB," the BCMCL chief said. Annually, the government receives an estimated Tk 1.10 billion in royalties from coal mining, he added.

Joint secretary (operations) to energy ministry Dr Md Sher Ali said the government would take only 10 per cent from coal extraction. The remaining 90 per cent would be enjoyed by the foreign companies and others, he added. "We've increased the rate for raising revenue from the coal mining sector," Mr Ali mentioned.

According to energy officials, the rate of royalties has been increased following a recommendation from the Bureau of Mineral Development.

Md Zafar Ullah, director general of the bureau, said the royalties was 20 per cent in 1989 that was reduced to 5.0 per cent in 2012 through framing an act. "We've seen the drastic reduction and felt the need to increase the rate in the current context," he added.

Officials said the bureau has also proposed that royalties from the extraction of stone or boulder and sand be raised. In the gazette, the ministry has amended the rates of royalties under 11th schedule of Mine and Mineral Resources Law (regulation and development)-1992 (39 in the law of 1992), and Mine and Mineral Resources Rules 2012, sections 2 (26), 66 (4), 81 (5).

Bangladesh has coal reserves around 7962 million tonnes in seven locations of the country, including Barapukuria, Phulbari and Digipara of Dinajpur, Khalaspir of Rangpur and Jamalganj of Joypurhat. The rate of coal was $61.50 per tonnes on May 29, 2001.

It was raised by phases to $71.50 in July 2008, $85.50 in July 2010, $106.50 in February 01, 2012, $131.50 in May 01, 2015. On July 01, 2017, the rate was reduced slightly to $130, according to the data of the BCMCL. However, state royalties remained 5.0 per cent since 2012 despite an increase in the selling cost of coal.

The BCMCL has signed a contract with Chinese coal miner XMC/CMC (China National Import and Export Corporation) consortium and the extraction began in 2005.

A Consumers Association of Bangladesh report shows as many as 5,48,000 tonnes of coal were misappropriated since extraction at Barapukuria with the aid of officials of the department concerned.

The production of power supplied to the northern region was largely dependent on the availability of coal from the coal mining company.

Link: https://thefinancialexpress.com.bd/trade/govt-doubles-coal-mining-royalties-1584074716

Find Alternatives to Coal, Gas: Says Anu Muhammad at Phulbari Day rally

27 Aug 2019 | The Daily Star

Suggesting the government to find out alternative source of fuel, Professor Anu Muhammad -- member secretary of National Committee for Oil, Gas, Mineral Resources, Power and Ports -- yesterday said waste materials and solar energy can be used as sources to generate power, to meet the increasing demand in the country.

He was speaking as chief guest at a rally in Phulbari upazila of Dinajpur yesterday, marking 13th anniversary of Phulbari Day.

Dinajpur chapter of the national committee organised the event.

“We do not want any development project in the country that affects human lifestyle, nature and ecological system”, he said.

A large volume of waste is produced in Phulbari every day, which can be used as an alternative source of fuel to generate power. Besides, the government can set up solar plant in the upazila, he suggested. About the Phulbari coal mine, Prof Mohammad said Asia Energy has continued its efforts to persuade government and people of Phulbari to implement the coal mine project.

He urged the government to close down activities of Asia Energy in Bangladesh, and demanded that the cases pressed by the company against people of Phulbari be withdrawn.

“People of Phulbari will not allow a coal mine,” he said.

If the demands are not met within September, they would hold agitation in front of PMO in October and November to press the government to accept the demands.

Archaeologist Mehdi Hasan, coal mine expert Dr Nusrat Zahan, and Zonayed Saki of Gonosamhati Andolan also spoke at the programme.

Earlier in the morning, people of Phulbari and leaders of the committee brought out a mourning procession in the town, which paraded different streets with placards opposing the coal mine. Later, they paid tribute at the altar of three people who were killed on August 26, 2006, as the then BDR personnel fired bullets on protesters.

More than 200 people were injured in the incident, which is now observed as Phulbari Day.

Link: https://www.thedailystar.net/city/news/find-alternatives-coal-gas-fuels-1791040

GCM Resources Extends Memorandum for Phulbari Project Development

14 April 2020 | Morning Post

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.