London Stock Exchange listed GCM Resources has signed a preliminary Engineering, Procurement and Construction (EPC) contract with China Gezhouba Group International Engineering on the long delayed 2,000MW Phulbari mine-mouth coal fired power plant in northwest Bangladesh.

GCM is a London based resource exploration and development company. The agreement follows on from the Joint Development Framework Agreement announced on March 9 this year, which outlined the roles and responsibilities of GCM and Gezhouba in pursuing approval of the Phulbari Coal and Power Project.

The Contract Framework Agreement awards CGGC the exclusive right for the engineering, procurement, construction, and commissioning of a proposed 2,000MW mine-mouth thermal power plant at GCM's proposed coal mine in North-West Bangladesh for an agreed initial estimated cost of US$3.8 billion. This will be subject to further adjustments when the parties finalise a full engineering, procurement, construction and commissioning contract.

A definitive EPC agreement will be negotiated upon consent being obtained from the Government of Bangladesh.

CGGC is the main international business company of both China Gezhouba Group Corporation and China Energy Engineering Co (Energy China). Energy China is a state owned enterprise, and in 2017 ranked 312th in the Fortune Global 500. Over the past three years, Energy China has engaged in the design and construction of power plants with a total installed capacity of nearly 220GW, which ranks it first in the world.

The Phulbari Coal and Power Project is located in the Dinajpur District of Northwest Bangladesh, approximately 350 kilometres from the capital, Dhaka, and 10 kilometres from the Indian border. GCM holds a mining lease and exploration licences in the Phulbari area covering the prospective mine site. 

GCM had invested over Pounds 40 million in the project to June 30 2017, preparing the Feasibility Study, Scheme of Development, Environmental and Social Impact Assessment , Management Action Plans and more recently updating the work carried out in the Feasibility Study. 

The Department of Environment approved the Project's Environmental Impact Assessment back in September 2005, but a succession of governments have failed to move forward with the project. However, the issue of how energy and power problems are impeding the economic development of Bangladesh are currently high on the agenda, and GCM is pressing ahead in the hope of receiving government approval for the Project's Scheme of Development. The Phulbari deposit is conducive to a long life, low cost mining operation. The thermal coal could either be used to substitute imported coal, or to fuel additional power plants with a total generating capacity of 4,000MW. Coal surplus to domestic requirements, for example semi soft coking coal,  would be sold into the international market.