- GCM Resources
- 13 December 2024 11:07:24
Source: Sharecast
The AIM-traded firm said the MoU, originally signed in November 2018, would now remain in effect until 6 December 2025, under the same terms as the previous agreements.
It said the partnership had already achieved significant milestones, including the signing of an engineering, procurement, and construction (EPC) contract in March.
The contract covered key aspects of mine development, such as infrastructure construction, overburden removal, dewatering, drainage, and the selective mining and stockpiling of valuable industrial mineral co-products from the overburden.
GCM said those co-products were expected to provide early cash flow ahead of coal extraction.
The project was reportedly shifting toward a contract mining model, which would involve experienced contractors using their own resources and equipment, thus reducing technical risks and initial capital expenditure.
Under the extended MoU, GCM and PowerChina would explore further collaboration on additional work packages and financing necessary for the full development of the Phulbari coal mine.
PowerChina's role as a mine development partner remained contingent on internal compliance approvals and regulatory clearances, the board noted.
GCM also highlighted the growing energy needs of Bangladesh, which it said had expanded its power generation capacity significantly over the last decade, largely relying on imported fuel.
With over 8,000MW of coal-fired power capacity installed or soon to be operational, the country was apparently facing a coal demand of about 19 million tonnes annually.
GCM said it believed that the development of the Phulbari mine could reduce Bangladesh's dependence on costly imports, leveraging the high-quality coal reserves to support the nation's energy security.
“Working under the MoU, GCM and PowerChina will have the opportunity to finalise the remaining work packages necessary to bring the Phulbari coal mine into production,” said chief executive officer Michael Tang.
“It also further strengthens our working relationship and demonstrates our ability to bring the Project to fruition.
“Having PowerChina as our Development Partner will greatly assist with obtaining the necessary government approval and demonstrating that the proposed Phulbari coal mine will provide a large reliable supply of affordable commercial energy that will reduce the country's dependence on expensive imported energy products.”
At 0808 GMT, shares in GCM Resources were flat at 0.01p.
Reporting by Josh White for Sharecast.com.