Asia Energy to develop Bangladesh coalfield

UK-BASED company, Asia Energy Corp is planning to raise about £15 million through an initial public offerings (IPO) on London's Alternative Investment Market (AIM) market. The funds will be used to develop the Phulbari Coal Field near Dinajpur, originally discovered by BHP Billiton.

Staff Reporter

Asia Pulse reported that the listing, planned for late March, would value the company at £30 million to £40 million. AEC is currently 100% owned by Deepgreen, 41.2% owned by London based Cambrian Mining.

Asia Energy plans to develop an open-cut mine at Phulbari by 2009 and an associated 2,200 megawatts power station to be commissioned by 2016.

Pre-feasibility studies commissioned by Asia Energy demonstrated that Phulbari could be developed as a large-scale open pit mine capable of producing 9 million tonnes of coal annually at a cost of $US15 per tonne. This would give the project a life of 40 years and cost $US600 million to develop.

Asia Energy plans to proceed with a full feasibility study on the project at an estimated cost of $US10 million to US15 million over two years. The study is scheduled to begin in mid-2004, preceded by a programme of field exploration and baseline studies that are now under way.

Asian Energy received special consideration for renewal of an exploration license for two years to carry out a feasibility study on a block of the field.

United News of Bangladesh reported that David Lenigas, executive director of Asia Energy, said Phulbari should be producing coal by 2009, and the extra power supply and boost from spin-off industries such as brickfields and glass-making could have a far-reaching impact.

“The company’s consultants estimate that the project and its spin-offs from the infrastructure investments have the potential to increase the Bangladeshi GDP by 60% by the year 2040,” Lenigas said.

According to the Cambrian Mining website, comprehensive contracts have been entered into with the Government of Bangladesh covering prospecting licences, mining licences and an investment agreement which provides for certainty in proceeding to mining and sets out fiscal, monetary and economic terms for investment.

The Phulbari coal field was discovered by BHP Billiton in 1997 and Asia Energy got exploration licence in 1998. The field has 350Mt of recoverable coal.