Global Coal Management update

I have had a query from a visitor as to why Asia Energy now Global Coal Management's price fell so much in the first place.

The company purchased the rights to mine for coal on an open-cut mining basis in the phulbari region of Bangladesh. According to Asia Energy the coal reserve in this mine is 572 million tons worth US$21 billion over 30 years, which could provide the Bangladesh government with revenues of 1% per annum of it's country's GDP.

The area to be mined is 59sq hectares and encompases many villages and agricultural areas and obviously the local people are against the decimation of their land , but their biggest issue seems to be that it is a forgein company that will be doing it. They would rather wait until Bangladesh have their own expertise and specialist equipment to carry this out for themselves.

Protesters gave the then Asia Energy a deadline to leave the area and a protest by approx. 30,000 people on August 26th 2006 resulted in 5 or 6 people being shot and teargas being used on the protesters by security forces. The stock price went into freefall and the company asked for their stock to be suspended in August 2006. They returned to the AIM in October 2006 with their share price at 95p.

It appears that since then the company have changed their name and are in discussion with the government about the continuation of the project after they were banned from operating in August 2006.

There are no guarantees that they will be given back full rights to develop this mine, but they are still working to achieve this. This is why it is down on my list as a recovery stock, but no recovery stock has guarantees built into it.

If you are a low risk investor or ethical investor, this punt is not for you.

However since I first blogged it and bought some at £1.31 the price today is at a bid price of £1.60 and I'm showing a 20% increase including costs for the shares I bought. For a lot of people a 20% gain is their target and they sell and move on. However, having bought this as a recovery stock and not put a lot of money into that because of the risk, I'm going to let this ride for a bit and see what happens with the elections.

For further information on what happened, please read the folowing link. I won't copy the story onto here because of the length of it.

http://www.meghbarta.org/nws/nw_main_p01b.php?issueId=6§ionId=20&articleId=471