A company with a Mkt Cap of circa £176m that need a minimum of $2 Billion to finance the Phulbari project. A project that involves building up to 2,500MW coal fired power station for electricity generation.
AEN just had to dilute with around another 15% plus of shares issued to raise just over 50 million, so I see no way $2 Billion can be raised by this route.
A partner, ie a major will be needed to stump up the cash
However the risk/reward is massive as much of the money will be for the power station build. Also local support is bad, and up to 100,000 people are affected according to local newspaper reports. Electricity is dirt cheap in Bangladesh and still many people do not pay their bills. The government plan to more than double the existing capacity by 2010, 94% of it is coal fired so most of aEN coal could well be required to feed the increased capacity over the 30 year stations life span.
Consumption will be around 15 million tons per year, the local brick industry is also expected to use much of the coal. My point is that previous valuations have been made thinking much of the coal will be for export, well if they did this where will the coal come from to power the electricity generation power stations and the brick industry ?
Even more worrying is
1. No final permission yet granted for the mine by the government
2. No 'forced relocation' of local people has been promised from Phulbari
3. Size of power station for electricity still not agreed, only 500MW proposed
4. Massive funding required of $2 Billion minimum ( I say $4 Billion )
5. Ground water and pollution problems to resolve, locals up in arms
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