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Dhaka Tuesday,  Jul 23, 2024

Phulbari Coal Mine Project

GCM Resources Is in Advocacy

EB Report

Despite long-time silence from Government end to go ahead- GCM Resources-a London based resource Development Company is still advocating for developing Phulbari Coal Project- a crown jewel of country’s coal resources. As a pioneer investor in country’s untapped coal resources, GCM showed unlimited passions and commitment to develop the coal mine. There is miss conception that, GCM may pull out from the Project, but GCM is in mode to raise fund farther for the operations of its foreseeable future. It seems that, GCM is not giving up the project. On the hand, decision makers are still in a dilemma for developing domestic coal rather theory of generating power from imported coal irrespective of reality is getting more attention. After the pathetic incident of 26th August 2006 following a protest organized by Oil & Gas Protection Committee created a myth that nobody wants mine in the area. The fate of Phulbari Project is hanging in this perspective. GCM Chairman Michel Tang said in the occasion of publishing six months financial results that, over the next 12 months the GCM Board will continue pursuing approval of the Project through its ongoing relationship with the Bangladesh Government while progressing community engagement activities. GCM said, The Government of Bangladesh has continued to pursue its long-term strategy of re-balancing the country’s energy sector towards coal-fired power, which will substantially increase the in-country demand for thermal coal in the coming years. The Company’s coal project, a world class resource of 572 million tonnes, is well placed to meet the anticipated market requirements.
Michel Tang’s Statement
Over the last six months the Government of Bangladesh has continued to pursue its long-term strategy of re-balancing the country’s energy sector towards coal-fired power, supported by a diversified mix of other energy sources. Implementation of the Government’s Power Sector Master Plan (PSMP) will require adding 19,650MW of coal-fired power generation within 15 years, which would depend upon the equivalent of 58 million tonnes of high calorific coal. The PSMP envisages the coal supply will be 60% domestic and 40% imported. At this stage feasibility studies are progressing for 3,700MW public sector coal-fired power projects and two contracts amounting to 1,152MW have been awarded in the private sector. Construction and commissioning dates for these projects are yet to be finalised.
There is already a vibrant coal market in Bangladesh driven by the brick kiln industry. Historically this coal has been imported from the Meghalaya State of India and is extremely poor quality with very high sulphur content. An independent supply channel and market study commissioned by GCM concluded the annual demand is over five million tonnes for the brick industry. In May 2014 the Indian Government suspended coal mining in Meghalaya in an attempt to regulate the ad hoc activity. The Bangladesh brick industry, which is a crucial part of the country’s construction sector, is looking for a more reliable long-term coal supply solution.
The in-country demand for thermal coal is therefore anticipated to substantially increase in the coming years. Of Bangladesh’s five known coal deposits, the Phulbari coal deposit is the most advanced in preparation for extraction due to GCM’s extensive and detailed exploration and evaluation studies. The Phulbari Coal Project is therefore well placed to meet the market needs.
GCM, through its subsidiaries, retains its legal right to explore, develop and mine in respect of its Contract with the Government of Bangladesh which has granted the licences and lease, subject to approval of the Scheme of Development submitted to the Government of Bangladesh. It is this approval which the Board continues to pursue in order to realise the benefits of the Project for all stakeholders.
Engagement with the communities over the entire project area remains a core focus of the Company’s activities and community meetings with local citizens, community leaders and businesses have continued throughout the last six months. The objective of these discussions is to understand the needs and view of the local community and explain the potential benefits and implications of a mine and associated activities.
As announced on 20 November 2014 the UK National Contact Point to the OECD (the “NCP”) reported on its examination into alleged breaches of the OECD Guidelines for Multinational Enterprises made by activists. All the allegations in respect of human rights were either rejected by the NCP on the basis of being unsubstantiated or rejected by the NCP after examination into the complaint.
The NCP found one partial breach due to GCM’s reduced communication with local communities for the period 2006 – 2012, being the period following completion of the Project’s Feasibility Study. However this matter has already been addressed and as from 2012 the Company substantially broadened its community communication and engagement activities with the aim of ensuring the local community remains fully informed on the Project.
The positive outcome of the examination was expected. From the outset the project exploration and evaluation activities were undertaken with the goal of building a world-class mining project. An international team of industry leading consultants was assembled to study and plan the project. The Environmental and Social Impact Assessment was prepared according to the highest international standards that existed at the time and was independently reviewed with guidance from the Asian Development Bank. Since then the Company has continued to update its plans in line with developments in international standards and continues to act with integrity and fairness.
The examination conducted by the NCP was a thorough and impartial process by a credible, internationally respected organisation and we look forward to the dialogue moving to the substantial benefits that the Project can deliver to the local communities and businesses.

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