Company Update

Asia Energy PLC
10 October 2005


                Asia Energy plc ('Asia Energy' or 'the Company')


    Asia Energy submits Power Plant Proposal to the Government of Bangladesh


Highlights:


• Proposal to build a 500 MW coal fired power plant
• Plant expected to consume 1.5Mtpa of coal from the Company's mine
• Estimated capital cost of USD$ 476m
• Construction to commence in 2007
• Power expected to be sold under 25 year PPA


Asia Energy Corporation (Bangladesh) Pty Ltd, the wholly owned subsidiary of
UK-based Asia Energy PLC, on Sunday 9 October presented to the Government of
Bangladesh (GoB) a proposal to build a 500 Megawatt (MW) mine-mouth power plant.
The new power plant will firmly establish coal as a viable source of energy in
Bangladesh and present an unparalleled opportunity to generate electricity from
a natural resource other than gas and imported oil.

The proposal, presented to Board of Investment ('BOI'), covers the development,
financing, construction, ownership, operation and maintenance of a single unit
500 MW coal-fired power plant, (the 'Phulbari Power Project'). The power plant
will bring together the rapidly growing energy needs of Bangladesh and the
development of the Phulbari coal mine.


Asia Energy has already submitted its Scheme of Development for the Phulbari
mine to the GoB. The open pit operation will become the largest coal mine in
Bangladesh, producing 15 Mtpa (million tonnes per annum) of high quality thermal
and metallurgical coal and a range of domestic coal over the mine life of 35
years.


It is intended for the Phulbari Power Project to operate primarily as a base
load plant and generate an average of 3,700 GWh of electricity per year. Power
will be sold to the Bangladesh Power Development Board ('BPDB') and or to the
Rural Electrification Board ('REB') under a 25-year Power Purchase Agreement
('PPA'). If the proposal is accepted, a letter of intent is expected be signed
with the GoB in support of the project followed by negotiations of the final
agreements using current contracts for private power projects as the basis.

Asia Energy commissioned Aldwych International Ltd to prepare the Phulbari Power
Project and design the plant. Aldwych International is a power plant development
company based in the UK with extensive worldwide experience in developing,
financing, constructing, and operating power plants. Aldwych brought together an
international team to work on the Phulbari Power Project, including Black &
Veatch International Ltd and O&M Sulutions (Bangladesh) Ltd. The proposal is
submitted in the form of a bid in conformance with the Private Sector Power
Generation Policy of Bangladesh ('PSPGP') to facilitate appraisal and to benefit
from the incentives applicable under that policy.


Asia Energy will conduct all the required environmental and technical studies to
establish final binding tariffs which will pave the way for completion of the
PPA and associated coal purchasing arrangements and the scheme of finance.


The plant will be designed, constructed and operated to international standards,
using modern emission control systems to meet both local and relevant
international environmental emission limits. Asia Energy proposes to locate the
power plant within the Mine Project Area to minimise the effect of the
development on the local communities and to optimise the management and control
of environmental impacts.


Asia Energy intends to hold international competitive tendering for the major
Project elements to ensure that the process is transparent and that the plant is
constructed at a competitive cost. With construction scheduled to start in late
2007, the plant would be in operation by 2011. EPC costs are currently estimated
at US$476 million. Asia Energy intends to finance the project, on a 'project
finance' and 'limited recourse' basis, using both international and local
funding sources.


Supply of coal to the power plant will diversify and strengthen the market base
for the Phulbari mine. It is expected to provide a ready outlet for 37 Million
tonnes of domestic grade coal over the 25 year life of the PPA at attractive
prices. The proposed power tariff will support a coal price in today's terms of
around US$45/tonne, which after adjustment for energy and ash levels, is
consistent with current prices for internationally traded thermal coal. Being
higher in ash and lower in energy than Phulbari export thermal coal, the coal
supplied will not only suit the purpose designed coal pulverisation and
combustion facilities at the power plant, but will add to the market for the
higher ash fraction of coal products. Overall, the power plant coal supply is a
viable economic opportunity to augment the mine's competitiveness in the
international marketplace.


The proposed Phulbari Power Project can guarantee a long-term, economically
competitive supply of reliable base load power generated from indigenous coal,
and therefore offers significant benefits to the Government and the people of
Bangladesh. A growing power shortage has been identified by the GoB as a
critical bottleneck in economic development, with the country needing to double
its electricity power output over the next decade. The country has an installed
capacity of 4800 MW, and demand is forecast to increase to more than 8000 MW by
2011. An increase in coal fired generating capacity, based on the strategically
important coal deposits in the Northwest of the country, will reduce the current
high reliance on gas reserves and help Bangladesh meet it development goals.


For further information please contact:

Michael Frayne, Joint Managing Director     Justine Howarth, Cathy Malins
[e-mail]              Parkgreen Communications
David Lenigas, Joint Managing Director      Tel: [phone]
[e-mail]               [e-mail]
Asia Energy PLC                             [e-mail]
Tel: [phone], Fax: +44 (0) 20
7491 2758
[e-mail]; www.asia-energy.com








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