Overview

Coal was first discovered at Phulbari in Northwest Bangladesh during surveying and drilling between 1994 -1997 by the Australian mining company BHP, which entered into licensing and investment agreements with the Government of Bangladesh. These agreements were assigned to Asia Energy Corporation (Bangladesh) Pty Ltd in 1998.

The Resource

In 2004-2005, after drilling more than 100 holes, Asia Energy’s exploration programme established a coal resource totalling 572 million tonnes. An updated JORC Resource Statement issued in August 2005 classified the basin as 288 million tonnes in the Measured category, 244 million tonnes Indicated, and 40 million tonnes Inferred. The Statement was produced by coal geology specialist, Mr Frans Bos of Melbourne-based independent consultancy GHD Pty Ltd.

The drilling and gravity surveys suggest the basin remains open and extends further southward, and additional drilling is required to confirm the southern extent of the coal basin.

The new drilling established coal seams ranging in total thickness between 20 and 65 metres. The average thickness over the entire basin was just below 30 metres.

The coal type at Phulbari, varying between High Volatile A and High Volatile B bituminous, will be suitable for both a mine-mouth power station and for export to Asian seaborne markets as thermal and semi soft coking coal. The projected mine offers a large number of benefits for the local, regional and national economies of Bangladesh.

The Project

At an annual production of 15 million tonnes and based on an average coal price of $50 per tonne, the Bangladesh government would receive an estimated $200 million annually in taxes, royalties, customs and duties, and port and freight charges. Production at Phulbari would significantly reduce Bangladesh’s dependence on imported coal and help replace the country’s dwindling reserves of natural gas as a power source. Power is in scarce supply in Bangladesh with approximately 30% of the population having regular supplies of electricity. Mining by-products, such as clay for the manufacture of brick, rock for aggregate and groundwater for irrigation and town water supply, will bring additional benefits to the local and national economies.

The mine will be a catalyst for growth in a generally poor region and will stimulate industries servicing the operation. Although some local relocation of agricultural land, villages and part of the Phulbari township will be required, the impact will be offset by opportunities for skilled employment and the provision of service industries and upgrade in housing, transport and other local amenities.

There is a broad gauge railway (partly dual gauge and partly dual track) linking the Phulbari Project Site to a potential direct export route into India and to the river port of Khulna. Significant parts of this existing track will need to be upgraded. A major portion of the export coal will pass through the Company’s planned Khulna coal terminal and be barged to a floating transfer pontoon at Akram Point to be loaded onto ocean-going vessels.