By Jaime Llinares Taboada
Shares in GCM Resources PLC jumped Thursday after the company said that it had signed an agreement with China Nonferrous Metal Industry's Foreign Engineering & Construction Co. to develop GCM's Phulbari coal and power project in Bangladesh.
The AIM-listed mining-and-energy company said the two companies have agreed to establish a joint venture to discuss and arrange works related to the project, including a definitive feasibility study and financing. China Nonferrous Metal is expected to acquire a 5% stake in the joint venture, GCM said.
As part of the agreement, China Nonferrous Metal will facilitate to arrange financing for the project and be appointed as exclusive engineering, procurement, construction and commissioning contractor, GCM said.
Shares in GCM at 0725 GMT were up 7.50 pence, or 75%, at 17.50 pence.
GCM said it is in talks to include Power Construction Corp. of China Ltd. as part of the framework agreement.
"Whilst the Covid-19 pandemic has delayed our progress with the project, we believe that it has encouraged the government of Bangladesh to review and enhance its energy security by utilizing local fuel sources, following supply and importation disruptions," GCM Executive Chairman Datuk Michael Tang said.
The Phulbari project is planned to combine a 572 million metric tons high-grade coal mine with a 6,000-megawatt power plant.
Write to Jaime Llinares Taboada at email@example.com; @JaimeLlinaresT
(END) Dow Jones Newswires