Coal News of Phulbari – Bangladesh

News on coal resources & coal basins of Bangladesh

Archive for August, 2008

Chamber leaders see coal as only option to resolve power crisis

Posted by phulbarinews on August 27, 2008

Business leaders of different chamber bodies of northern districts at a discussion in the city urged the government Monday to move to develop the Phulbari coal mine without any further delay, reports UNB.

They saw the huge coal reserve at the Phulbari coal mine as the only option now to deal with future energy crisis, particularly in power generation. “We can easily produce 3,500MW of electricity from the coal to be extracted from the Phulbari mine,” said Rangpur Chamber president Mostafa Azad Chowdhury. He said that as the country’s gas reserve was depleting fast, coal was becoming the only option for power generation.

Greater Rangpur-Dinajpur Industry-Business Development Forum organised the discussion on “Industrialisation in Rangpur-Dinajpur: Energy Availability” at a city hotel. Forum president and former Board of Investment (BoI) executive chairman Nazrul Islam presided over the meeting, where former PDB member Fazlul Haque presented the keynote paper. Former lawmakers Mizanur Rahman Manu and Asaduzzaman Noor, leaders of eight chambers of the northern districts – Rajshahi, Dinajpur, Rangpur, Lalmonirhat, Nilphamari, Gaibandha, Panchagarh and Jaipurhat – also spoke at the function.

The speakers, supporting the open pit mining at Phulbari coal mine as it provides more than 80 per cent extraction of resources, urged the government to ensure proper compensation to those who would be affected by development of the mine. “The authorities concerned have to ensure that the affected people would be properly compensated and rehabilitated,” said former LGED chief engineer Monwar Hossain Chowdhury.

Source: http://www.thefinancialexpress-bd.info/search_index.php?page=detail_news&news_id=43837

Date: 27 August 2008, Bangladesh

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Develop Phulbari coal mine to resolve power crisis

Posted by phulbarinews on August 27, 2008

Chamber leaders urge govt
Unb, Dhaka

Business leaders of different chamber bodies of northern districts at a discussion at a city hotel yesterday urged the government to move to develop the Phulbari coal mine without any further delay. They saw the huge coal reserve at the Phulbari coal mine as the only option now to deal with future energy crisis, particularly in power generation.

“We can easily produce 3,500MW of electricity from the coal to be extracted from the Phulbari mine,” said Rangpur Chamber President Mostafa Azad Chowdhury, adding that as the country’s gas reserve is depleting fast, coal is becoming the only option for power generation. Greater Rangpur-Dinajpur Industry-Business Development Forum organised the discussion on ‘Industrialisation in Rangpur-Dinajpur: Energy availability’ at Sheraton Hotel with President of the forum Nazrul Islam in the chair.

Former PDB member Fazlul Haque presented a keynote paper on the topic. Former lawmakers Mizanur Rahman Manu and Asaduzzaman Noor, leaders of eight chambers of the northern districts — Rajshahi, Dinajpur, Rangpur, Lalmonirhat, Nilphamari, Gaibandha, Panchaghar and Joypurhat — also spoke at the function.

The speakers, supporting the open pit mining at Phulbari coal mine as it provides more than 80 percent extraction of resources, urged the government to ensure proper compensation to those who would be affected by the development of the mine. “The authorities concerned have to ensure that the affected people would be properly compensated and rehabilitated,” said former LGED chief engineer Monwar Hossain Chowdhury. If the government fails to take the decision in proper time to extract coal from Phulbari mine, Bangladesh might lose the opportunity to use its coal, as there might be a bar on coal extraction worldwide in future, he added.

Former BGMEA president Tipu Munshi expressed his frustration over the poor attention of the government to the development of mineral resources of the northern region. He further said the people of the northern region should not be deprived of coal resources due to the antipathy by a section of people. Forum leader MA Majid termed the opposition to coal extraction in Phulbari an international conspiracy.

Editor of the Bangladesh Observer Iqbal Sobhan Chowdhury suggested that those who oppose open pit mining and those support open pit should sit together to reach a consensus through a logical debate.

Source: http://thedailystar.net/story.php?nid=52084

Date: 27 August 2008, Bangladesh

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Energy supply stalls

Posted by phulbarinews on August 20, 2008

FORREST COOKSON

The energy crisis in Bangladesh continues to worsen. As he has learned more and more of the real situation the Special Adviser, a courageous man of ability and integrity, is bringing order to a confused and difficult situation. But time is short and we must pray for his success in the face of long odds. But for most the full depth of the crisis is not being faced. Policy actions have been much better in past few months. After floundering for a year there began to emerge a coherent approach to energy.

For too long those concerned with the energy sector have lived in a fool’s paradise, unwilling to face up to the technical and economic issues that the nation faces and believing in dreams rather than in a reality dictated not by ideology or nationalism, but by science and economics. Donors have focused on the wrong issues and have maximised the returns to their employees careers rather than Bangladesh’s real problems. Two gaps have emerged: One scientific and real, the other one managerial.

Gap 1: Technology, economics and energy
There is an unwillingness in the public sector to master the science and management skills needed to operate a modern energy economy. There is a commitment to ideological or opportunistic approaches, ignoring pragmatic issues of what works.  It is not a lack of skilled personnel; there are plenty of highly competent Bangladeshi engineers. Talk to them — you find that they are disgusted with the lack of scientific integrity that characterises the government’s policies. The authorities have a history of wanting to hear only good news; they do not want to face difficult facts. Everyone loves to proclaim the merits of BAPEX as an organisation that is able to handle the exploration and development of gas without outside help. But ask a Bangladeshi engineer about this and one is greeted with laughter. The organisation and financing needed for recovery of the energy sector cannot be achieved within a government organisation.

There are three points:
What are the gas reserves? This first point is an engineering question.
The estimated reserves claimed for the gas fields need regular revision and testing, analysis of data from the wells. etcetera. Reserve levels are not constants of nature but dynamic, determined by technology, increased knowledge and prices. Improved technology may increase reserves; higher prices increase reserves; knowledge of the gas field gained by experience allows adjustment in reserve levels. This type of review is not being done on a regular basis so that the actual reserve position in the gas fields is, at best, vague. Now as the need for more gas is so urgent truth is emerging. We do not really know the condition of the gas fields owned by the government. The Ministry has not been willing to do the work, recruit the staff, and fund their activities that would provide the needed information. At a technical level this has long been understood, but no one was willing to let this secret out of the bag. Ultimately when the gas field will not produce the reserves that are alleged to be there, reality bursts out. Objectively there are two points: (1) the reserves are more likely to be larger than claimed but the work to establish this is yet to be done. US experience is a gas field provides six times the original estimate of the reserves! (2) The field can be exploited to maximise the total gas from the field or to maximise the current flow. Too often the second is followed resulting in loss of gas.

Swallowing the optimistic claims of the gas reserves, the left wing elements that try to dominate government policy were able to argue against the need to develop the gas fields using private foreign knowledge and capital.  Repeating the fairy tale of the gas situation and continuing to project a nationalistic fervour in the place of scientific assessment, the nation was led step by step into the present quagmire. Never without arguments the leftists now claim that the present problems with the gas supply are a conspiracy to move towards private and foreign participation in the energy sector! Wow! What illustrated better their capacity to spin fairy tales? All the myths and misrepresentations do not actually produce the volume of natural gas the nation desperately needs. All the hot air does not generate electricity. Bangladesh’s energy sector is not being properly developed.

Preference for public ownership
The second factor is the commitment of the bureaucracy to government ownership and rejection of involvement of the private sector. The commitment to government ownership despite thirty years of proof that it does not work exposes the deep cancer inside the energy sector. The increase in gas availability in the past decade has come almost entirely from the private production sharing contracts (PSCs); the increase in electrical energy has come almost completely from the private independent power projects (IPPs). The obvious conclusion that the government must stop trying to construct and operate gas fields and power stations has been rejected over and over. Now the nation is paying the consequences. 

To my amazement, in the face of this history of what works and what does not work, the left intellectuals and the bureaucrats continue to argue for government ownership and operations and against the private sector. The bureaucracy and the politicians have favoured government ownership and operational role as this opens the opportunities for rewarding friends and obtaining illegal pay offs. But the intellectuals, as all over the world, cannot bring themselves to face reality — their belief that government resource allocation can improve over that based on the greed of capitalism is wrong, it does not work. The Caretaker government understands the folly of public sector domination of energy production. Their efforts to shift to private participation should win the day.

Achieving Realistic Pricing: Pricing of energy has been unrealistic and results in poor resource allocation and waste. The government feels that prices should be kept low to help the “common man.” This results in waste; often does not provide the alleged support to the farmers and the poor which are instead captured by influence and monopoly; and causes widespread misallocation of resources. The taxes levied on energy are very high but rarely reviewed for appropriate economic consequence. Low prices for electricity benefit largely middle and upper class households; low prices raises demand allowing households to live beyond their means. Gas prices are also low. The government is considering needed increases in gas; the Petrobangla proposed increases will bring revenue much closer to costs.  The decisions on price levels to be made by BERC in September are critical to moving towards realistic gas prices.

The first gap comprises the failure to develop and support proper technical management of the gas fields; the second is failure to shift the ownership, investment and operation of the energy sector to the private sector; and third to establish realistic prices. These are not points of ideology but points of science and logic. The consequences of this gap are now clear: No one knows how much gas the nation has in existing fields and the reserve figures are uncertain. Until the Caretaker government, the energy ministers proved over and over that these are not able to plan, finance, build power stations or operate gas facilities at a reasonable cost with an acceptable quality. Finally energy prices remain below cost. The Caretaker government has made great progress in all three areas but there is a long way to go.

Gap 2: Implementation failures
The second gap is slow implementation of three actions that would accelerate the long term development of the energy sector: The development of manpower for the energy sector, building a strong regulatory organisation, and expanding foreign investment in the energy sector. Manpower Development: One essential action in improving the energy sector is to increase the trained manpower. Some one should ask the government what has been done with all of the money that the IOCs, operating under Production Sharing Contracts, have given the Ministry for manpower development. It would very interesting to see how much money has been given and how this has been used. Who has been trained? Where are these persons now? What benefits has the nation gained from the expenditure of these funds? How much has been spent on officials taking trips around the world? What other sources of training funds have been used to improve the skills of persons in the energy sector? Who has been trained and where are they now?  How much money has been spent on shopping expeditions in the guise of attending training seminars? Everyone knows this is going on but nothing is done to stop it. There is continuous discussion of the need for training manpower in the energy sector. The government has not told its citizens what they have done in the past with their own funds or with donor funds. The use of training funds by government organisations is one of those scandals that everyone knows about but no ones wants to face. Bangladeshi citizens should be angry at the wastage of funds available for training that are not used to benefit the nation. The performance of the energy sector will be based on the quality of the technical staff available.

Building the Regulatory Commission: The build up of the energy regulatory commission (BERC) has been very slow. It is obvious that the government had opposed the establishment of this commission and stalled in the face of the donors’ insistence. It is ridiculous that the donors are involved in this; surely it is obvious that the government needs to have a strong regulatory organisation that will objectively guide and regulate the activities of the players in the gas, coal, and power sectors. Of course as a regulatory commission develops, the role of government owned energy facilities would decline. The Ministries and the Corporations do not want their power diminished by a strong regulatory commission! That is the point; the private sector brings its superior management skills, its greater technical knowledge, and its ability to mobilise finance. The regulatory commission insures that the public’s interests are protected in pricing, safety, and environment. BERC should regulate the PSCs and IPPs and establish prices for energy products.

Foreign Investment in the Energy Sector: Bangladesh is very unfriendly to foreign investment in the energy sector. The press reports continually a flood of negative seminars, groups, etcetera denouncing foreign investment. There is almost no one explaining the necessity and benefits. It is no surprise that interest in the energy sector in Bangladesh by foreign investors has shrink to almost nothing. There are various aspects of this. The failure to develop the coal resources in a timely fashion is now seen as a disaster. Not starting large scale coal mining along with gas shortage means that there will be little increase in the availability of electricity over the next few years and it may go on as long as a decade if the present dithering and indecisiveness continues. The delay is largely the consequence of group preaching anti foreign investment propaganda. 

The poor response to the third bid round in the gas sector signalled the difficulties in attracting IOCs for gas development. The ban on exports of gas reinforces the lack of interest. Petrobangla made no serious effort to examine the factors related to investor attitude. The lack of bids for the Bibiyana power project reflects the scepticism of foreign investors in participating. Once again the Power Cell was not willing to listen, believing terms can be dictated. Finally, foreign investors in gas fields claim price adjustments are needed to meet changing costs. No one listens; foreign investors go away. The nation is caught up in a deep, devastating energy crisis. Unfortunately this crisis will get worse and worse. The availability of electricity will at best increase slowly and may well decline as old plants fall apart and function with less and less reliability. Projects will bog down in court cases that may take as long as a decade to resolve. The legal system was used to block further development of the gas sector, and to prevent private sector projects from going ahead by frivolous challenges to decision after decision. Frankly I do not see any way out. It is like a national suicide. Training resources have been wasted on shopping expeditions; those who have received real training are often no long employed in the sector. The political system is unable to act to develop either the gas or the coal resources. The bureaucracy continues to believe the nostrum that public ownership is the right path.  If business as usual continues in the energy sector then the Bangladesh economy will find its growth rate declining and there is only poverty and darkness for the ordinary men and women of this nation. 

The CG has made considerable progress. But based on history an elected government is unlikely to continue these effective actions. Democracy will bring a black out, not electricity.

Source: http://www.theindependent-bd.com/archive.details.php?nd=2008-08-18&nid=94100

Date: 18 August 2008, Bangladesh

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Revisiting the Energy-Power Scenario in Bangladesh

Posted by phulbarinews on August 20, 2008

Farhad Tuhin

The development of any country depends mostly on its power without which the national economy must fail to proceed. Everybody knows about the meager situation of power in Bangladesh. But the policymakers and experts are still not taking initiatives to improve this sector showing unknown reasons, which is unfortunate. However indecision, unnecessary delay in decision making process, bureaucratic tangles and fund constraints may be ascribed to the persisting energy crisis. Despite all the well-meaning intentions, it appears that for years the energy sector of the country is hamstrung by a kind of decision-making paralysis. In Bangladesh, the power is generated from natural gas (82%), oil (9%), Hydro (4%) and coal (5%).
Demand and Supply of Power. BPDB is responsible for distribution of electricity in most of the areas in Bangladesh. Dhaka Metropolitan City and its adjoining areas are under DPDC and DESCO, Khulna and surrounding Districts are under West Zone Power Distribution Company Limited (WZPDCL) and some of the rural areas of Bangladesh are under Rural Electrification Board ( REB).

The total installed capacity of power generation is 5245MW of which the achievable average generation capacity is around 3400 MW whereas the average peak demand of power is around 4200 MW. Therefore the present shortage of power is around 800MW. In the last 2 years, there was no additional power generation from any new plant. And in the last 7 years, only 80MW (Tongi power plant which is now closed due to gas unavailability) power has been added to the national grid. At present only 42.09% of the population is served with electricity and per capita electricity consumption is only 169.92 Kwh (FY -2006) where there is a goal in Power Sector Master Plan to reach the electricity for all by 2020 which is absolutely impossible considering the present condition.

Present Gas Reserve and Projected Demand
According to the estimation, the recoverable gas reserve (proven and probable) of the 23 discovered gas fields of the country is 20.63 TCF of which 7.42 TCF has been used so far leaving a recoverable gas reserve of 13.21 TCF (as of December 2007). Energy demand projection for a developing country like Bangladesh is difficult to perform. Several scenarios were used to get an understanding of the energy requirement for a level of economic performance. The natural gas requirement from 2000 to 2050 has been summarized as follows. (a) If the economic performance is on the low side (3% GDP growth rate), the total gas requirement will be between 40 and 44 Tcf. (b) If economic performance continues according to the historical trend (Business-as-usual; 4.55% GDP growth rate), gas requirement will be between 64 and 69 Tcf. (c) If performance is on the moderately high side (6% GDP growth rate), gas requirement will be between 101 and 110 Tcf. (d) If performance is on the high side (7% GDP growth rate), gas requirement will be between 141 and 152 Tcf. However, depending on low GDP rate the natural gas demand up to 2020 will be 9.9 Tcf to 17.4 Tcf. Now it is evident that the present natural gas reserve is not sufficient to meet our upcoming demand. The gas shortage has already been started all over the country. Government has already started rationing in distribution. Several power plants are not able to generate their maximum capacity because of gas shortage. Numerous industries are struggling for the production because of gas shortage.

Power Generation
At present around 82% of power generation is dependent on natural gas of which 85% (cumulative production) gas is supplied from governmental organization (Petrobangla) and 15% (cumulative production) gas is supplied from International Oil Companies (IOCs). Khulna power plant (226MW), Bhola power plant (6MW), and Khulna Power Company Ltd (KPCL) (110MW) are producing electricity (9% of total) using oil/furnace oil as fuel.

Karnafuli Hydro Power Station, the only hydropower plant in the country is located at Kaptai, Chittagong. After being commissioned in 1962, the plant could feed the national grid with 80 MW of electricity. In later years, the generation capacity was increased in two phases to a total of 230 MW (4% of total). The plant not only plays an important role in meeting the power demand of the country but is also vital as a flood management installation for the areas downstream. Around 3 billion tones of Gondwana coal has been discovered in 5 coal fields of Northwest Bangladesh. Among the 5 discovered coal fields, only Barapukuria and Phulbari have been intensively studied with significant number of drilled boreholes and estimated the resource confidently to internationally recognized standards. Resource estimation in other coal fields is inferred only with a limited number of boreholes and significant exploration activities will be required to define the resource confidently. Among these coal fields, only Barapukuria Underground Coal Mine is now extracting coal with the target of one million tones per year. A mine mouth 250MW coal-fired power plant (5% of total) has been established based on the coal. But the mine is struggling to feed the power plant with required amount of coal for various technical and geological difficulties. Huge amount (approximately 3 billion tones) of imported low quality coal (from India) is used in brick fields all over the country. A few quantity (as coal briquette) of coal is consumed both for domestic and commercial purposes (e.g., tea stall, blacksmith’s traders etc).

However, the policy makers and the experts must analyze and discuss the present scenarios. The national economy will suffer unexpected stagnant situation for long periods, if the country does not take initiatives immediately to address this present uncertain and meager energy situation properly. We shall have to be realized that the continued crisis and trouble in power-energy sectors may cause disastrous situation in our industry, agriculture and other commercial sectors. The national economy will obviously become stagnant or even nonfunctional. Dr. M. Tamim, special assistant to chief advisor for the Ministry of Power, Energy and Mineral Resources said (Source: Daily New Nation 20 July 200  ‘No more Power Plant on Gas’. Therefore coal would be the only available alternative resource to overcome this power crisis. A long debate has been continuing on coal policy and coal sector development amongst the experts/policymakers. Now it is time for taking decision on proper coal exploration and utilization.

Farhad Tuhin: Geologist

Source: http://www.weeklyeconomictimes.com/news-details.php?recordID=1553
Date: 03 August 2008, Bangladesh

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Phulbari Coal Project:Ready and revving to go

Posted by phulbarinews on August 18, 2008

The coal at the Phulbari mine remains untapped. And the debate continues as to mine or not to mine; but given the energy crisis already upon us, can

we afford to dawdle?

 

A PROBE Report

 

It is not long ago when controversy raged over the Phulbari Coal Mine. While pragmatism held that Bangladesh needed the coal, and needed it fast, there was also the emotional side of the debate which highlighted environmental aspects and other factors. It was a politically volatile time too and decisions in this regard remained “safely” in limbo. However, time has passed and now it is possible to view the matter with objectivity. With the energy crisis not just looming large, but actually upon us, it is high time that the pros and cons be weighed in realistic terms.

 

The four-letter word which currently features in every other discussion, dialogue and seminar in the country, is ‘fuel’. Fuel is a matter of growing concern, a concern growing out of all proportions. There is, of course, gas. At one time it was said that Bangladesh was virtually floating on gas. But now it is time to take a realistic look at the situation. With an exponential increase in the dependency on gas for industry, motorised vehicles, et al, it is clear that this total dependence cannot continue for long. The upward spiral of international prices of petroleum rules out the continued traditional use of this fuel for vehicles, putting further pressure on gas reserves. CNG has become not the alternative fuel, but the fuel where cars are concerned. In fact, with diminishing gas reserves and general uncertainty about the reserves to be tapped in future, there is need to free up Bangladesh’s natural gas to be used for vehicles and such purposes.

 

Experts in unison will agree that there is no more time to waste in conjecture. And there are certainly not enough funds to waste on an increase in exported fuel. The country must pursue alternative energy sources; there is no two ways about it. Given the existing natural resources of Bangladesh, coal is the obvious solution to the energy crisis. And Bangladesh has coal. It has high quality coal with less than 1% sulphur content, almost on par with coal from Newcastle. Already mining has been undertaken at Barapukuria, though for certain reasons there have been glitches in the system.

 

It is Asia Energy which now is all set and ready to begin mining at the Phulbari Coal mine which has deposits enough to produce 15 million tonnes of coal annually over the 35-year span of the project’s life. In fact, Asia Energy is the only foreign investor that has carried out exhaustive exploration of the mine area along with environment and social impact studies. So if coal is a solution to the energy crisis, it is imperative that the mining begin with immediate effect at Phulbari. Asia Energy is all revved up and ready to go. With the draft coal policy on he brink of being approved, there really now is no need for further delay to give a go-ahead for the mining to begin. Time is of essence. In fact, one official of Asia Energy points out, “had the project started up on schedule, then the first power station would be operating on coal by next year.”

 

The delay in the start-up of the project was caused, to the most part, by a section of protesters who demonstrated against the open-pit method of mining. However, taking into consideration all the pros and cons, Asia Energy clearly sees that this is the best way to go about it. Given the geological conditions at Phulbari, the coal seam thickness and depth of coal from the surface, open pit mining is deemed as the safest and most economical way of extracting coal from the mine. As opposed to the open pit method, underground mining has high safety risks which include mine flooding, spontaneous combustion, high humidity, high temperature and extensive ground subsidence with permanent land loss.

 

On the other hand, open pit mining ensures that 90 per cent or more of the resources can be extracted. Underground mining where the coal seam is thick may allow only 20% of the coal resources to be extracted. Protestors argue that open pit mining will displace a large section of the population, rendering them homeless. It will pose as a threat to the flora and fauna and also cause desertification of the area. Asia Energy experts point out that nowhere in the world where open pit mining has taken place have there been instances of desertification. Additionally, the company has a long-term plan to address all these various impacts of the project, including displacement, ecological imbalance, etc.

 

“In the first place,” an official of the company points out, “if you look carefully at the map of the Phulbari coal mine project area, you will see that it is certainly not as densely populated as most areas of Bangladesh. Secondly, neither is it a forest area thick in foliage and animal life.” However, since there will certainly be displacement of the local populace and felling of forestry, to whatever extent, Asia Energy has plans for sustainable environmental management as well as responsible management for social impacts.

 

Environmental management

 

Asia Energy has extensive plans in place to manage environmental impacts such as water, soil, air, noise, waste and biodiversity. By extracting underground water, Asia Energy will ensure the supply of water for domestic, agricultural and industrial use and meet the demand of drinking water in and around the project area, including the Phulbari township. Allaying any fears of desertification, some of the extracted water will be injected back to maintain ground water levels. Extracted and treated water will also be pumped back into rivers and other water bodies of the area, further removing the threat of aridity. The company also is committed to rehabilitate the land used in the project to its proper state for agriculture and other uses.

 

Social management

 

Displacement of local populace was a matter of great concern to the local people where the project was concerned, but Asia Energy is committed to resettle around 40,000 people, including 2300 indigenous people. They will be provided with ample rehabilitation support. The people will be relocated only after the rehabilitation arrangements are complete. Fair and full market price compensation will be provided for land, trees, crops, houses and other assets. Financial assistance will also be given for a period of time to support affected people while they attain their previous income levels. All this will be done in a very participatory manner, in consultation with the local communities, public representatives and other stakeholders. This engagement will continue throughout the project.

 

Benefits

 

The benefits of the Phulbari coal mining project are multifarious and long-term. They far outweigh any other concerns which may have risen regarding the project. As Asia Energy is committed to addressing these concerns in tangible terms, it is time to concentrate of the benefits of the project, on exploiting the opportunity to use the coal for the development the nation so sorely needs. Bluntly speaking, it is time for the tree-huggers to take a reality check.

 

The project will generate sizeable revenue for the government, both directly and indirectly. Over the life of the mine and based on an average coal price of US$50 per tonne, the government will earn an estimated US$ 4.43 billion in corporate taxes, royalty payments, custom duties and income tax on employees’ wages. Bangladesh Railway and the Mongla Port Authority will earn about US$ 2.64 billion. Unlike gas, coal mining in Bangladesh is not covered by any Production Sharing Contract (PSC). The companies are expected to pay corporate tax, income tax for its personnel, VAT, duties, royalties and other government service charges. Asia Energy’s contract has no provision for full cost recovery. The full financial risk is taken by the investor.

 

The Phulbari Coal Project has a planned life of 35 years. This may be extended. Studies determine that 15 million tonnes of coal per year must be mined and sold to ensure the project remains economically viable and is able to meet the huge production costs as well as meet its environmental and social commitments. In addition to providing a new source of energy for the country’s domestic demands for several decades, Phulbari will also generate foreign exchange earnings and drastically cut down on coal import. It will also spawn the growth of support industries. As a benchmark coal mining project, Phulbari will also activate the acceleration of the overall coal mining industry of the country. With the desired upgrading to the railway and deep-water port facilities, further economic benefits are inevitable.

 

Importantly, about 50 % of the projects net earnings will go to the government’s coffers. And as the coal policy is on the brink of approval, the government can be secure in ensuring optimum benefit for the project.

 

The Bangladesh Vision

 

The Phulbari Coal Project, in fact, has such potential that it can make significant contribution to Bangladesh’s efforts in achieving the Millennium Development Goals. Poverty alleviation is one of the most significant features of MDG and this project is a milestone in economic development. And with a coal-fired power station in place, electrical power for all by 2020 will not seem so unrealistic as it does now, with only 38% of the population currently coming under the power supply net.

 

Coal, now

 

The bottom line is we need coal and we need it now. It is a new and reliable source of energy which will provide Bangladesh with energy security, new power stations, reliable power supply and economic development. Phulbari mine will lead to regional infrastructure development. It will save on natural gas, increase revenue and generate employment. In a nutshell, this pioneering project will pave the way for the next generation. It will be a landmark in encouraging foreign investors to look at Bangladesh.

 

Vigilance

 

While Asia Energy’s Phulbari Project is certainly promising, it is up to Bangladesh to ensure that the nation can reap the most from the project. It is up to Bangladesh to remain vigilant that commitments are kept and targets are met. Vigilance is also needed against vested quarters out to resist the project. It is the people who matter and their interests must be safeguarded. Any misgivings in the mind of the people will soon diminish as benefits of the project accrue.

 

Source: http://www.probenewsmagazine.com/index.php?index=2&contentId=4198

Date: 15-21 August 2008, Bangladesh

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Ctg to get emergency gas, rental power plant

Posted by phulbarinews on August 14, 2008

Advisers’ council sends back coal policy to ministry
Staff Correspondent, Ctg

The Council of Advisers at its meeting here yesterday decided to provide 20 mcf (million cubic feet) additional gas and set up a 50-MW rental power plant for immediate and short-term solutions to the acute gas and power crises prevailing in Chittagong. Chaired by Chief Adviser Fakhruddin Ahmed, the meeting also discussed the draft National Coal Policy and asked the energy ministry to place the draft policy again after scrutiny.

Held at Chittagong Circuit House, the meeting decided to set up a separate gas distribution centre titled “Karnaphuli Gas Systems Limited (KGSL)” to ensure smooth distribution of gas in Chittagong. To resolve seat crisis in the educational institutions, the meeting decided to increase additional 19,000 seats through infrastructure development of six private schools and setting up of two new model school and colleges here at a cost of Tk 71 crore.

“Different local issues like acute gas and power crises and waterlogging prevailing in the port city featured in the meeting where we have tried to give some immediate and short-term solutions to the problems,” said Chief Adviser Fakhruddin Ahmed at a press briefing after the meeting. “Additional gas will be supplied to the industrial units that could not go into operation for want of gas,“ he said. “As a short-term solution to power crisis, we have decided to set up a furnace oil-run rental power plant,” he said, adding, “Though we know it will be a bit expensive, we have to look for an alternative way of producing power as an instant solution.”

Regarding the proposal for setting up coastal township in Chittagong by the world leading steel manufacturer, Mittal Group, the chief adviser said the government is actively considering the proposal. “Talks with Board of Investment (BoI) and others concerned are going on,” he said, adding, “Since it’s a huge project all the details need to be discussed thoroughly.”

Briefing the reporters, Commerce and Education adviser Hossain Zillur Rahman said 20 mcf additional gas will be provided for Chittagong through two separate supply lines from Bangura and Bakharabad gas fields. Of the 20 mcf gas, 10 mcf will be supplied to the already installed industrial units that could not go into operation while the rest will be required for producing 40MW electricity at the existing plants.

Besides setting up of the 50MW rental power plant under short-term solution, initiative was there to ensure smooth and equitable distribution of power through demand management, said the commerce adviser. He said a Tk 95 crore project for infrastructure and drainage system and a Tk 22 crore project on garbage management are awaiting Ecnec approval. The meeting decided to provide all out cooperation for implementation of the Tk 10,000 crore JBIC (Japan Bank for International Cooperation) project for construction of outer ring road in Chittagong.

“Besides, we will hold talks with the Italian ambassador for reviving and immediate implementation of Madunaghat Water Treatment Plant to resolve the water crisis in the port city,” said the commerce adviser. The meeting thoroughly discussed and laid emphasis on implementing projects for construction and repair of six inter-district highway and roads in this region, he said. Moreover, the meeting underscored the need for taking decision on priority basis on construction of Chittagong-Dohazari-Cox’s Bazar (upto Ghundhum bordering Myanmar) railway track involving Tk 1300 crore.

The meeting also decided to take up project for setting up the CDA proposed IT tower. To overcome the godown crisis in the port city, the meeting decided to set up seven warehouses in the city’s Dewanhat area. Besides, the meeting also decided to approve two projects (Gymnasium and Prof Yunus Social Science Building) of Chittagong University and construction of an annex building of Chittagong Circuit House, said the commerce adviser.

UNB adds: while visiting the construction site of the 3rd Karnaphuli Bridge in the morning, the chief adviser directed the authorities concerned to complete the bridge and its approach road at the same time. He mentioned that some big bridges in the country had been opened to traffic without completion of its approach road. As a result, full benefits of the bridges could not be derived soon after those were opened to traffic.

The CA was informed that the construction of 950- metre long and 24.47-metre wide bridge over the Karnaphuli is expected to be completed by July 2009, two months ahead of schedule. The bridge is under construction at a site between Bakulia and Shikalbaha on the Chittagong-Cox’s Bazar highway. The total cost of the bridge along with 1.5 kilomtre approach road and 2.6 kilometre service road is Tk 590 crore of which Kuwait Fund for Arab Economic Development (KFAED) provided Tk 372 crore, while the rest Tk 218 crore was financed by the Bangladesh government.

The chief adviser expressed satisfaction with the progress of the construction work and hoped that the bridge would be opened to traffic well ahead of the schedule.

Source: http://thedailystar.net/story.php?nid=50388

Date: 14 August 2008, Bangladesh

Posted in coal, Phulbari-news, Power & Energy | Tagged: , , , | Leave a Comment »

Draft coal policy for Mine Bangla

Posted by phulbarinews on August 13, 2008

Proposal goes to cabinet today
Sharier Khan

The eighth draft coal policy that emphasises immediate government-led action in coal sector to meet the country’s surging energy demand is likely to be placed before the caretaker government’s cabinet today. The draft proposes to set up a “mine Bangla” in line with Petrobangla by 2010 to spearhead different mining schemes. This government body will take strategic partners from private sector through open tenders for quick development of the schemes.

Other proposals include compulsory release of 20 percent shares of a mining venture to the local market as per the laws of the Securities Exchange Commission. When selling back, shareowners will be only able to sell those to the government at market price. “Because of excessive revisions and inputs from a wide number of people, the draft policy now sounds more like a law than a policy,” says a source. “And this was exactly the observation of the law ministry about the policy when the energy ministry sent the draft to the law ministry a few months back.”

The draft policy tries to touch almost all aspects of coal development. “That is why the law ministry observed that instead of such a policy, the government should work on several laws instead of just one,” the source adds. The coal policy was first drafted in December 2005. The seventh draft was prepared by a committee to review the draft policy. Headed by former VC of Buet Prof Abdul Matin Patwari, the 10-member committee submitted its report to the energy ministry in December last year.

The ministry itself has also modified some of the contents. Only recently, the ministry has forwarded the draft to the Cabinet Division for approval by the cabinet. Under this policy, private companies will not have sole ownership over any coal mining deal and must come as partners with a national coalmining company. The draft restricts export of coal to be used as fuel, allowing exports of higher grade coking coal.

It lays out a detailed plan on how the government should handle rehabilitation and resettlement of communities that will be displaced by a mining project. The Patwari committee had suggested that the land acquired by a project be returned to the original owner upon completion of the project. The land and the law ministries however deleted this part as it conflicts with the laws of the land. “Once the government acquires a piece of land, it can’t be returned to the original owner. The government can however restore the land and allow its agricultural use,” says a source.

The policy does not restrict open pit mining, as was initially demanded by some pressure groups. Instead, it identifies mining method as a technical issue, which should be decided on the basis of individual cases and technical viability. The policy prioritises private partnership that puts highest emphasis on coal-fired power projects. A 29-member committee led by the energy ministry will review coal sector master plan, royalty, the sector’s development issues from time to time and give decisions.

By 2010, the government must frame a coal sector master plan, identify coal zones, review coal industry infrastructures and initiate restructuring measures. It will also restructure the Bureau of Minerals Development and Geological Survey of Bangladesh and chalk measures to protect the environment and develop the legal frameworks for it. The government will also have to chalk out a security measure for mines and a plan to reclaim land. The draft recommends that the government decide on implementing an open pit mine as a “test case” in the northern part of the Barapukuria underground mine. If such a venture is “commercially successful”, the government will review all technical aspects and take follow-up measures.

“There has been no study by any group about such an open pit mine in Barapukuria. How can this committee suggest this? Besides, who would invest for a test case if there is no guarantee of any profit?” asks another source. “Again, technically you also need bigger land for an open pit mine. The Barapukuria mine area has a power plant and other structures. Then is this a feasible idea or just an undue idea?” the source quips.

The draft policy says till 2025 if Bangladesh’s GDP remains as low as 5.5 percent, the country will need to add 19,000 megawatt additional power. On the other hand, if the GDP is as high as 8 percent, additional 41,000 MW power will be needed. But at the same time, Petrobangla says production of gas, which has been the key source for power generation, will start to decline from 2011. This is where the country’s coal should play a role.

It adds that to meet its power demands in a GDP growth rate scenario of 5.5 percent, Bangladesh will need 136 million tonnes of coal till 2025. If the GDP rate is 8 percent, then Bangladesh will need 450 million tonnes coal. The draft says the country’s existing four discovered coal fields of Barapukuria, Phulbari, Khalashpir and Dighipara can cater this need till 2030 or so.

Source: http://thedailystar.net/story.php?nid=50253

Date: 13 August 2008, Bangladesh

Posted in Asia Energy, coal, Phulbari-news | Tagged: , , | Leave a Comment »