The Phulbari Coal Project The Phulbari Coal Project - - Bangladesh Bangladesh Presentation to Coaltrans Asia Conference Presentation to Coaltrans Asia Conference Bali, 5 June 2006 Bali, 5 June 2006 Listed on the London Stock Exchange (AIM) Market – AEN.L
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The Phulbari Coal Project The Phulbari Coal Project -- BangladeshBangladesh
Presentation to Coaltrans Asia Conference Presentation to Coaltrans Asia Conference
Bali, 5 June 2006Bali, 5 June 2006
Listed on the London Stock Exchange (AIM) Market – AEN.L
Coal in West …Gas in East
Jamalganj
Dighipara
Khalaspir
Barapukuria
Madhyapara(hard Rock)
PHULBARI
Bangladesh Resource Potential – The Big Picture……
PROJECT HISTORYPROJECT HISTORY……
Asia Energy operates under Contract with the Government of BanglAsia Energy operates under Contract with the Government of Bangladesh adesh Original Contract with BHPOriginal Contract with BHP……signed 1994signed 1994Assigned to Asia Energy 1998Assigned to Asia Energy 1998…… exploration and resource evaluation ensuedexploration and resource evaluation ensuedAsia Energy PLC listed on London AIM Asia Energy PLC listed on London AIM …….April 2004.April 2004April April ‘‘04 04 Mining Lease grant triggered Feasibility Study requirementMining Lease grant triggered Feasibility Study requirement24 months to complete and submit a24 months to complete and submit a ““Feasibility Study & Scheme of DevelopmentFeasibility Study & Scheme of Development””(SoD)(SoD)
Submitted SoD to Government 2 Oct 2005Submitted SoD to Government 2 Oct 2005Now in Approval phaseNow in Approval phase
BiodiversityBiodiversity
Mine DesignMine Design
Drilling & Coal TestingDrilling & Coal TestingCoal Transport & InfrastructureCoal Transport & Infrastructure
World Class International and Bangladesh Team involved in ProjecWorld Class International and Bangladesh Team involved in Project t Feasibility StudiesFeasibility Studies
CEGISCEGIS -- Centre for Environmental Centre for Environmental & & Geographic Information Services Geographic Information Services AC Nielsen Bangladesh Pty Ltd (AC Nielsen) AC Nielsen Bangladesh Pty Ltd (AC Nielsen) Nature Conservation Management (NACOM)Nature Conservation Management (NACOM)IUCN The World Conservation Union (IUCN)IUCN The World Conservation Union (IUCN)Bangladesh Atomic Energy CommissionBangladesh Atomic Energy CommissionFalgu Sandhani for drilling support and adviceFalgu Sandhani for drilling support and adviceBangladesh University of Engineering and TechnologyBangladesh University of Engineering and TechnologyInstitute of Water Modelling (IWM)Institute of Water Modelling (IWM)Bangladesh Centre for Advanced StudiesBangladesh Centre for Advanced StudiesProfessor Dr Muhammad Qumrul HassaanProfessor Dr Muhammad Qumrul HassaanDepartment of Geological Sciences, Jahangirnagar Uni BangladeshDepartment of Geological Sciences, Jahangirnagar Uni BangladeshBarlow Jonker Pty LtdBarlow Jonker Pty LtdAME Consulting Pty LtdAME Consulting Pty LtdCoffey Geosciences Ltd (Coffey)Coffey Geosciences Ltd (Coffey)
Project Timeline Project Timeline –– Feasibility and DevelopmentFeasibility and Development
APPROVALSAPPROVALSQ2 2006Q2 2006
Resource Resource StatementStatement
QQ22 20020044
SCHEME of SCHEME of DEVELOPMENT DEVELOPMENT
to Govtto Govt
OB MININGOB MINING 2002007 7 COAL 2008COAL 2008
Land AcquisitionLand Acquisition
LAPLAP
20082008 ++20204040
Phulbari Power ProjectPhulbari Power Project
ENVIRONMENTALCLEARANCE
GEOLOGYGEOLOGY
&&
MINE PLANMINE PLAN
In Situ Coal Resources In Situ Coal Resources –– JORC Standards CompliantJORC Standards Compliant
1919
1919
Base SeamBase Seam
5725723939389389125125TotalTotal
404028281212InferredInferred
24424439391241246262IndicatedIndicated
2882882372375151MeasuredMeasured
TotalTotalLower Lower SeamSeam
Main SeamMain SeamUpper Upper SeamSeam
Notes:
1. Results based on Geological Model submitted in July 2005
2. Table compiled from data contained in the Phulbari Coal Project ‘In Situ Resource Statement‘ issued by GHD to Asia Energy, August 2005.
Mining at Phulbari Mining at Phulbari ……
Open Cast Truck and Shovel operationCoal measures at 165 – 270 metresThick seams (main seam 22 metres)Dewatering with down hole pumpsMinimal Blasting requiredOverburden contains saleable
construction materials
Open Pit Open Pit --MidMid--Life DetailLife Detail
Progressive Land RehabilitationProgressive Land Rehabilitation
Mining Stage Mining Stage Plans Plans
Phulbari Environmental and Social Impact ManagementPhulbari Environmental and Social Impact Management
EIAEIA completed to highest completed to highest international standardsinternational standards……....
Covers all critical environmental Covers all critical environmental management tasksmanagement tasks
Comprehensive monitoring programs Comprehensive monitoring programs for water quality, noise and air qualityfor water quality, noise and air quality
Asia EnergyAsia Energy’’s commitment to sustainable s commitment to sustainable developmentdevelopment……..
Phulbari is a pioneering project with a plus 30 year life Phulbari is a pioneering project with a plus 30 year life No one will be disadvantaged by the ProjectNo one will be disadvantaged by the ProjectNo one will be relocated without proper compensation & livelihooNo one will be relocated without proper compensation & livelihood d restoration assistancerestoration assistancePeople will enjoy improved amenities:People will enjoy improved amenities:
SanitationSanitationmore reliable / abundant water supply:more reliable / abundant water supply:
TownTownVillageVillageIrrigationIrrigation
Environmental and Social impact management programs, in line witEnvironmental and Social impact management programs, in line with h the highest international standards, will be in placethe highest international standards, will be in placeBiodiversity will be conservedBiodiversity will be conserved
MARKETINGMARKETING……
Phulbari can pursue a diversified marketing strategy, based onPhulbari can pursue a diversified marketing strategy, based on…………
Cost CompetitivenessCost CompetitivenessPhulbari is comfortably in the Lowest FOB Cost Quartile for the Phulbari is comfortably in the Lowest FOB Cost Quartile for the international international seaborne coal trade and will be profitable in all foreseeable maseaborne coal trade and will be profitable in all foreseeable market conditionsrket conditions
High quality, marketable coal High quality, marketable coal Export products are readily useable in all major marketsExport products are readily useable in all major marketsDomestic products are tailored to growing power and industry neeDomestic products are tailored to growing power and industry needsds
Reliable Coal deliveryReliable Coal deliveryA robust delivery chain and transport system is a key component A robust delivery chain and transport system is a key component of the of the Phulbari ProjectPhulbari Project
Location Location C&F advantage to South Asian markets, especially eastern India C&F advantage to South Asian markets, especially eastern India Competitive in other Asian markets and to the eastern MediterranCompetitive in other Asian markets and to the eastern Mediterranean in ean in Panamax vesselsPanamax vessels
Coal ProductsCoal Products
Coal preparation plant will produce three products using dense mCoal preparation plant will produce three products using dense medium edium cyclones and spiralscyclones and spirals
Total product recovery from ROM coal will be exceptionally high Total product recovery from ROM coal will be exceptionally high (94%) (94%) due to the clean and consistent due to the clean and consistent ‘‘in situin situ’’ quality and thick seams quality and thick seams
4 Mtpa by rail to eastern India 4 Mtpa by rail to eastern India –– via the existing crossvia the existing cross--border rail connectionsborder rail connections8 Mtpa by Bulk Carriers to seaborne markets, including south and8 Mtpa by Bulk Carriers to seaborne markets, including south and west coast India, viawest coast India, via
–– Dedicated rail transport on the existing network to KhulnaDedicated rail transport on the existing network to Khulna–– Stockpiling and barge loading at KhulnaStockpiling and barge loading at Khulna–– Bulk carrier Loading Platform at Akram Point Bulk carrier Loading Platform at Akram Point –– Transhipment through the existing shipping channel to open seaTranshipment through the existing shipping channel to open sea
Domestic Sales 3 MtpaDomestic Sales 3 MtpaPower stations, via direct delivery from mine mouthPower stations, via direct delivery from mine mouthBrickworks and other local industry, via existing rail networkBrickworks and other local industry, via existing rail network
–– Current local industry consumption of >2 Mtpa is met by high sulCurrent local industry consumption of >2 Mtpa is met by high sulphur (up to 4%) coal from phur (up to 4%) coal from IndiaIndia
Handy Size vessel at Mongla on Pussur River Mongla Kleenheat LPG Berth
Phulbari provides unparalleled opportunities for Bangladesh portPhulbari provides unparalleled opportunities for Bangladesh port and rail authorities to and rail authorities to improve infrastructure and revitalize the countryimprove infrastructure and revitalize the country’’s western transport corridors western transport corridorPhulbari will quadruple Bangladesh rail freight and transform MoPhulbari will quadruple Bangladesh rail freight and transform Monglangla-- Khulna into the Khulna into the countrycountry’’s largest export volume port s largest export volume port
Sea Port to MarketSea Port to Market……
BangladeshShiploading Platform, to be anchored in sheltered deep water (>18.0 meters) at Akram Point
Existing shipping channel to open sea to be dredgedto Panamax capability
*Nautical Miles Shipped Between Ports*Nautical Miles Shipped Between Ports
FUTURE OPPORTUNITIES FUTURE OPPORTUNITIES ––
The The Phulbari Power ProjectPhulbari Power Project……
Phulbari Power ProjectPhulbari Power Project……
500 MW mine500 MW mine--mouth proposal mouth proposal submitted to GoBsubmitted to GoBKey DriversKey Drivers
Ready coal market 1.5MtpaReady coal market 1.5MtpaBangladesh is power hungry Bangladesh is power hungry and suffering critical and suffering critical shortagesshortagesGoB is developing a GoB is developing a ‘‘newnew’’Energy Policy, with coal as its Energy Policy, with coal as its centrepiececentrepiece
Expansion to 1000 MW likelyExpansion to 1000 MW likelyAttractive New Business:Attractive New Business:
IPO opportunityIPO opportunityPower plant
GoB
Project Company
(Bangladesh)
Asia Energy Equity
IA, PPA
EPC contractorEPC contract
ADB, IFC, EIB and commercial
banks
BPDB
DA
Debt finance
Power sales
Phulbari Coal
Project Coal supplyG
oB G
uara
ntee
Boiler Supplier
Turbine Supplier
BOP Supplier
O&M services provider
O & M contract
Project development
Development Partner
Power plant
GoB
Project Company
(Bangladesh)
Asia Energy Equity
IA, PPA
EPC contractorEPC contract
ADB, IFC, EIB and commercial
banks
BPDB
DA
Debt finance
Power sales
Phulbari Coal
Project Coal supplyG
oB G
uara
ntee
Boiler Supplier
Turbine Supplier
BOP Supplier
O&M services provider
O & M contract
Project development
Development Partner
BANGLADESH BANGLADESH
andand
ASIA ENERGYASIA ENERGY““Making natural resources work Making natural resources work for the people of Bangladeshfor the people of Bangladesh…”…”
Significant Economic and Social BenefitsSignificant Economic and Social BenefitsValue added to the Bangladesh Economy over life of mine (*)Value added to the Bangladesh Economy over life of mine (*)
$7 billion in royalty and tax payments $7 billion in royalty and tax payments $21.4 billion or 1% boost to Bangladesh GDP$21.4 billion or 1% boost to Bangladesh GDP
–– $7.8 billion direct$7.8 billion direct–– $13.7 billion through economic multipliers$13.7 billion through economic multipliers
$3 billion saving in foreign exchange through coal import substi$3 billion saving in foreign exchange through coal import substitutiontution
Employment and Training opportunitiesEmployment and Training opportunities2100 jobs during construction, 1200 during operations2100 jobs during construction, 1200 during operationsStrong reliance on training local recruitsStrong reliance on training local recruits8 to 10 new jobs for every project employee8 to 10 new jobs for every project employee
Social infrastructure improvements including health, education aSocial infrastructure improvements including health, education and housingnd housingClean, potable water supply from mine dewatering in an area annuClean, potable water supply from mine dewatering in an area annually impacted ally impacted by droughtby droughtVital construction materials for the building and transport induVital construction materials for the building and transport industrystryNew commercial opportunities for the western part of Bangladesh New commercial opportunities for the western part of Bangladesh as a result of as a result of rail and port upgradingrail and port upgradingGrowth in energy supplyGrowth in energy supply
Coal fired electricity from Phulbari will reduce countryCoal fired electricity from Phulbari will reduce country’’s over dependence on gas and s over dependence on gas and meet 10% of countrymeet 10% of country’’s energy needs by 2015s energy needs by 2015
(*) (*) GHD Study resultsGHD Study results
Financing Phulbari Financing Phulbari –– A Structured ApproachA Structured Approach
$50 million share capital raising on 30 November 2005, through J$50 million share capital raising on 30 November 2005, through J P P Morgan CazenoveMorgan Cazenove
Funds to be used for initial equipment purchases (dewatering borFunds to be used for initial equipment purchases (dewatering bores, first es, first overburden fleet), deposits to secure future mine equipment ordeoverburden fleet), deposits to secure future mine equipment orders, initial land rs, initial land acquisition and recruitmentacquisition and recruitment
Project Financing Process underway, with Barclays Capital as advProject Financing Process underway, with Barclays Capital as advisers isers Anticipated Total Funding requirement of approx US$1.0 Billion*Anticipated Total Funding requirement of approx US$1.0 Billion*Banking Banking ““Project Information MemorandumProject Information Memorandum”” in preparationin preparationIndependent Engineering Reviews have been completedIndependent Engineering Reviews have been completed–– Mining and Infrastructure (SRK)Mining and Infrastructure (SRK)–– Environmental and social Impacts (URS)Environmental and social Impacts (URS)Go to market Q2 2006Go to market Q2 2006