Coal News of Phulbari – Bangladesh

News on coal resources & coal basins of Bangladesh

Archive for the ‘Asia Energy’ Category

Minister, FBCCI chief say: Pledge for change meaningless without electricity

Posted by phulbarinews on March 30, 2009

Staff Reporter

State Minister for Power and Energy Shamsul Hoq Tuku yesterday said that the government is unable to fulfil its election manifesto pledge without adequate electricity production. “Without electricity, our pledge for change will not be implemented,” he said a conference at Bangladesh China Friendship Conference Centre. The Centre For Policy and Dialogue (CPD) organised the conference.

For additional electricity production, it is urgent need to extract coal and exploration of gas, the Minister said. “We are extracting coal, but we have no policy on how to use this coal,” he said. “We must finalise the policy first with consultation of the experts and public, and then decide on mining.”

FBCCI President Annisul Huq said Power failure rate up 10 percent of factory production. “We do not have electricity 20 to 25 per cent of working hour.” He called upon the government to withdraw the licence tax for captive power and immediate decision on rental power plant for reducing energy crisis. He said that the businessmen are ready to provide financial support to strengthen BAPEX for gas exploration.

BUET Prof Nurul Islam said that the draft of a coal policy was submitted to the ministry at least eight times, but the ministry refused to work on it and finalise it. About the corruption in energy sector, he said, “Asia energy is so powerful that corruption of Asia energy was not investigated by the Anti-Corruption Commission. This was apparently done to protect the interests of Asia energy,” he said.

In his keynote paper, former Power Division Secretary M Fouzul Kabir Khan said we should stop blame game and national consensus is must for energy security in the country. He recommended finalising the coal policy and passing energy conservation act as a policy and institutional reform in energy sector. The former secretary informed that the government supply only 1,830mmcfd of gas against the demand of 2,095mmcfd.

CUET Prof M Shamsul Islam said some private entrepreneurs in power sector earned huge money in the name of power generation. Eng Sheikh Mohammed Sahidullah said that it is no need to produce coal by open pit method.  “It will be able to meet our demand for coal by extracting under ground mining,” he said.

Imran Ahmed MP, BIDS research director Dr. Assaduzzman, former PDB Chairman Shamsul Islam, Dhaka University Prof Dr. Hussain Monsur, former Power Cell Director General BD Rahmatullah, former atomic energy commission Chairman Shafiqul Islam also addressed at the conference, titled ‘Energy Sector: Challenges of Adding New Capacity’. Syed Manzur Elahi, a trustee member of CPD chaired the session.


Date: 30 March 2009, Bangladesh


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

Coal Mining Method: Option for Bangladesh

Posted by phulbarinews on March 23, 2009

Zubayer Zaman

Coal is the world’s most affordable and abundant fossil fuel, contributing to about 41% of electrical power and 26% of primary energy needs of the world.  At current production levels, proven coal reserves are estimated to last around 147 years. In contrast, proven oil and gas reserves are equivalent to around 41 and 63 years respectively (World Coal Institute, 2007). While over 68% of oil and 67% of gas reserves are concentrated in the Middle East and Russia, coal reserves are available in almost every country, with recoverable reserves in around 70 countries, making it most secure energy source than oil and gas. Despite the concerns over global warming for burning fossil fuels, especially coal, its role as dominant fuel is increasing throughout the world. According to World Energy Outlook 2008, world demand for coal advances by 2% a year on average, its share in global energy demand climbing from 26% in 2006 to 29% in 2030. Some 85% of the increase in global coal consumption comes from the power sector in China and India to support their impressive economic growth.


Good news for Bangladesh comparing the primary energy sources of its neighbors. The country has good quality bituminous coal with an estimated reserve of 2-3 billion tones in the five discovered coal fields. But the further potential of coal is still to be explored, though the country made the first discovery in 1962 at Jamalganj. Bangladesh has entered into the era of coal mining through the development of Barapukuria underground mine with projected output of 1 million tones per annum for 25-30 years. Detailed geological, geotechnical, social and environmental studies following international standards have been completed for the Phulbari coal field. This two well assessed coal fields jointly share an extractable reserve of about 1 billion tones. Jamalganj coal field with significant resource (>1 billion tones) is so far not considered technically and economically feasible for mining due to the depth (>600m). Other two coal fields, Khalaspir and Dighipara are not systematically assessed and significant efforts will be required to define the mine-able reserve and the method of mining and associated issues.



The Phulbari coal is mostly embedded in two major seams within the Gondwana basin accounting for almost 90% of the deposit with few other thin seams at different depths. Open pit mining will allow considering all the seams in mine design and thus maximize the recover to around 90-95% with other valuable co-products like kaolin, glass sand, gravels etc from the overburden materials. Experts suggest that the underground mining is not feasible considering the seam thickness, geotechnical conditions, mining conditions and economic returns (as already experienced with the Barapukuria mining). Thickness of the coal seams in underground mining significantly influences the resource recovery and mine safety, specially in a geotechnical conditions like Barapukuria and Phulbari. Barapukuria underground mining is being carried out using longwall mining method and coal is being extracted from seam-VI in slices (each slice around 2.5m). This multi slicing extraction method doesn’t allow recovery of major amount of coal and increases the risk of safety hazards like land subsidence, roof collapse, inundation of water, spontaneous combustion of coal etc as the mining advances. Land subsidence is inevitable in underground mining and Barapukuria mine has been facing the experience of such incidents in its very early stage. The subsidence will be more prominent over the large area following the progress of mining with permanent loss of land and other assets. The highly faulted and fractured nature of the basin might have some links to the land subsidence of Barapukuria and may further play bigger role as mining advances.



The coal resource is overlain by a major regional aquifer, the Upper Dupi Tila sequence. This poses significant technological challenge and environmental risks for mining. The presence of impervious ‘Lower Dupi Tila’ clay layer in the lithologic sequence immediately below the aquifer acts as a barrier to prevent water entering the lower sequences and its thicker presence is very vital for underground mining. This clay layer is relatively thinner and at times absent in the shallower section of the Barapukuria and Phulbari basin and gradually thicker towards deeper section. Therefore, underground mining in the shallower basin increases the risk of water inrushes from the overlying aquifer. The numerous faults and fractures of the basin might create some passage with the overlying aquifer which may open up further with coal extraction and increases the risk of mine flooding. Barapukuria coal mine already had such experience in 1998 that flooded the mine and forced to change the design. There should be a thorough study of the origin of huge amount of mine water which is being pumped out every day to keep the mine dry. If the source is overlying aquifer then there is a significant cause of concern for the mine safety and environment in future.



On the other hand, open pit mining requires to managing this regional aquifer efficiently to ensure safe working environment and stabilize the pit slope. The environmental and social implications of groundwater extraction need to be managed through ensuring supply of water for irrigation, community and other environmental uses. Fortunately the world mining industry has made significant technological advancement in handling large open pit mining operation at greater depth in complex geological and hydrogeological conditions. Major coal producing countries like India, Australia, USA and Indonesia produce most of their coal from open pit mines. RWE’s Hambach, Inden and Garzweiler mines in Cologne, Germany are the classic example of successful large open pit mining operations. Hambach alone produces 40 million tones of lignite annually at greater depth (>300m) managing huge aquifers (water extraction rate 16,000-17,000 litre/sec) and its social and environmental impacts.



Bangladesh coal is of good quality but considering other major coal producing countries the reserve is pretty limited- almost equivalent to the annual production of China. Therefore, mining method has to be appropriate to maximize the recovery taking into consideration of geological, hydrogeological reality of the coal fields, and economic viability and energy needs of the country. Underground mining experience at Barapukuria has already demonstrated that coal extraction with this method is not a sustainable solution, and will not meet the required demand for the country. It is uneconomic and will lead to loss of valuable resources of the country. With the present mine design at Barapukuria mine, the resource recovery will be less than 10%, leaving most of coal underground after spending millions of dollars for mine development. The mine which had all the potentiality to become a major energy source for the country is now running uneconomically and struggling to feed only 250MW power plant. Considering the limited reserve and fast growing primary energy market, open pit mining is the most logical option for coal development. An open pit coal mine with an annual output of 10-15 million tones can easily support generation of few thousand megawatts of electricity (approx. 3 million tones/annum of coal may ensure generating 1000 MW). Moreover, current import of 5-6 million tones of low quality, high sulphur coal can be substituted. Coal based briquette industry can be developed to supplement fire wood for domestic cooking and other light industries.



Open pit and underground, both are well established and well practiced mining methods for extraction of coal. But the choice of mining method depends on basin geology, and economic viability of extraction of the deposit. Social and environmental impacts of mining are also important consideration. Generally open pit mining method is preferred for appropriate geotechnical conditions of a coal deposit as it maximizes the resource recovery and offers better economics, and surplus revenues for environmental and social care related to mine development. Bangladesh already has the experience of underground coal mining. The option for open pit mining should be evaluated at least for one coal field with introduction of state of art technologies and best practice mitigation measures of mining world. Country can’t effort to go for another uneconomic venture like Barapukuria. This will neither ensure the energy security nor protect the interest of the country.



Date: 01 February 2009, Bangladesh

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“Open Pit Mining Must Start in Phulbari”

Posted by phulbarinews on March 17, 2009

Mollah M Amzad Hossain

Prof. Hossain Mansur of Geology Department of Dhaka University said that appropriate initiative must be taken without delay to explore and exploit coal as alternative fuel to ensure the required power generation in accordance with the election pledge of Awami League. For this, he said, the decision for open pit mining to extract coal from Phulbari is required to be taken on priority basis.

“But to work out the modality, the government must set up a high powered committee now comprising of representatives of Asia Energy, civil society who are opposed to mining at Phulbari and line professionals,” he told the Energy & Power

The EP Editor Mollah Amzad Hossain took the interview of Prof. Hossain Mansur, who is also an ex chairman of Petrobnagla. Following are the excerpts:

EP: What’s your observation about the energy infrastructure development plans or guidelines of Awami League– having proven track record of successfully managing energy sector from 1996-2001– which has returned to state power?

HM: Let us have an objective view of election agenda before making subjective analysis. Possibly this is for the first time since liberation of Bangladesh any political party formally declared well defined short, medium and long term planning for developing energy infrastructure to confront prevailing and emerging energy crisis.

It has been planned to generate additional 5000 MW power in the next 5 years. Generation from different viable alternatives– natural gas, coal, nuclear and renewable source have been envisioned in the plan. Party energy vision till 2021 has also been included there.

Government has spent only about 50 days in state power. There cannot be any doubt about the competence of the persons entrusted to implement the plan. Moreover, Prime Minister herself is monitoring it. But for this the implementing agencies have not been restructured yet. I hope this will be done soon.

Everyone is aware about prevailing crisis of competent professionals in the energy sector. Resolving this crisis is also a major challenge for the new government. Engaging an energy expert as advisor of energy sector during caretaker government was also a right decision.

EP: Do you think the government’s plan to engage an expert committee for this sector will create positive impact?

HM: I think it to be a good initiative of the Prime Minister. Committee formed with real energy experts of the country will definitely bring positive impact.

EP: There are court cases against PM Sheikh Hasina and ex PM Khaleda Zia regarding NIKO–BAPEX joint venture for marginal gas field development. What are your views about it?

HM: Head of the government has prerogative to approve any decision in the greater interest of the country. PMs considered this agreement as beneficial for the country. These cases are purely political.

If there has to be any genuine case of corruption in energy sector that has to be for leasing out Jalalabad gas field. BNP government handed over a discovered gas field to Occidental for a mere 22 million US dollars. But the government now has already purchased 24,000 US$ worth of gas from this field.

EP: Oil Gas & Port Protection Committee claims that there had been major irregularities in Niko agreement. You are associated with their movement. Now you are telling there was no irregularity. Then why you are still with their movement?

HM: Look the committee has several unreasonable demands like opposing offshore exploration; open pit coal mining. Niko is also one such. I don’t agree with the committee on these. It is not possible as an expert to agree with them on these issues.

But I worked with them to resist export of natural gas. I am with them on this. I am trying to make them understand their mistakes.

The left politicians who are staging agitation on oil, gas and port protection know it very well that they will never come to state power. That is why they have taken negative stand on reasonable issues.

EP: Let us again discuss on election pledges of Awami League. Do you think it is possible for the government to realize the pledge?

HM: Look in 1996 when Awami League came to power the government also inherited similar crisis situation in energy sector. Concurrently with expediting ongoing projects government encouraged massive gas exploration initiatives. Moulvibazar gas field was discovered. World Class Bibiyana gas field was also discovered. Sangu offshore gas field was brought into production. BAPEX developed Salda Nadi Gas Field.

On the other hand new power plants were set up after finalizing IPP policy within very short time. Side by side private sector power plants were also set up. For these actions generation increased from effective capacity of 1,500 to 3,000 MW. Consequently first three years of BNP government did not witness any crisis although they failed to set up a new plant during that time.

Now when Awami League led government is again in power the installed capacity of power is 5,450 MW. Some of the aging plants are derated so the real installed capacity is now reduced to 4,950 MW. For ongoing maintenance 680 MW can not be generated. Gas supply crisis also impedes generation of about 500-700 MW. So the available effective generation capacity is now 3,600-3,800 MW. This is not much different to what Awami League government left behind in 2001.

During the last term of Awami League government there was no crisis of gas supply. There was demand supply balance… I mean security of supply in the national gas grid. But now when public and private sectors have plans to set up power plants having capacity of 3,000 MW Petrobangla can not guarantee gas supply to more than 1,000 MW generation. So power generation as per its declared vision is a great challenge for the government. So not only actions for increasing power generation but also actions to source fuel for power are also major challenge. Even a single day must not be wasted in hesitating and sitting on decisions.

In my opinion if the government sincerely intends to realize its election pledge in energy sector it must take decision for offshore exploration in the Bay of Bengal as soon as possible.

On the other hand, appropriate planning needs to be made reviewing the situation whether gas supply will be possible to all planned gas based power plants. If there is uncertainty these must be dual fuel plants.

As a geologist I am optimistic that more gas fields will be discovered in Bangladesh. But natural gas alone can not meet the requirement of power generation. We must diversify fuel option. We need coal. This is our only major viable option. Import of hydro electricity is another option. There is scope for nuclear power generation also. We have to work on renewable power generation. But renewable energy can not be a substitute for fossil fuel based power generation.

Government alone do not have resources or capacity for required power generation. We have to rely on private sector investment from both local and foreign sources. So we must identify areas of energy value chain for foreign direct investment keeping our national interest above everything.

EP: Will you elaborate your opinion on feasibility of alternative fuels other than coal that you have mentioned.

HM: There is very little scope to expand our own hydroelectricity generation. But hydroelectricity import is only possible through regional initiatives. It has to come from Nepal and Bhutan. Both the countries have enormous hydroelectricity generation potential. India is currently importing power from them.

Bangladesh has to take political decision and try to catalyze four nation joint initiative to import hydroelectricity. It is a long term option.

The government has taken some initiative for nuclear power generation. But environmentalists are divided in opinion on nuclear power generation. Government must keep this into consideration also.

EP: You have said that coal is the only feasible option. But we are locked in various debates regarding coal exploration. How exploration can start resolving the current impasse?

HM: Please remember Bangladesh has 2.5 billion tonnes of proven coal reserves. It is possible with available technology to extract at least 1 billion tonne. Exploration from the largest reserve Jamalganj is not commercially viable in traditional method. We are mining coal from Barapukuria by underground method. But due to wrong decision we can only extract about 5 million tonne by 2011. This underground mine will create massive depression and subsidence in the mine area. It can never be restored and rehabilitated. The subsidence process has already commenced. Due to wrong decision it will not be possible to even extract 20-25% coal in place. It will be unwise to set up any new coal fired power plant based on Barapukuria coal.

EP: So you are saying exploration of coal in Barapukuria by underground method is a wrong decision?

HM: Look I am a geologist. Bangladesh geology in the mine area does not support underground mining. If we like to mine commercially it has to be open cut method only for shallow coal mines. Water management is major challenge here. Open pit mining can support recovery of 90% coal in place. In 5-10 years most of the mine area can be restored to original state. Only the final pit about 20% can be converted to a sweet water lake. This will be a massive asset for Bangladesh, a major source of power generation and other use.

It should be mentioned here that 1,400 crore taka has already been spent to develop Barapukuria mine and 1,600 crore taka has been spent to set up mine mouth power plant. But due to inappropriate mining method the investment is under great risk. The property and assets of the people of the region are endangered.

EP: You are telling Bangladesh should follow open pit mining method to explore coal. But, the Oil, Coal and Port Protection Committee is opposed to it.

HM: Look the movement was not against open pit mining. The committee movement was basically due to lack of trust on the then government. Actually it was not mining method rather it was lack of trust on the 4 party alliance government which crystallized the movement.

EP: But it is being told resettlement is a huge problem in case of open pit mining. How do you think about it?

HM: There is international law. Bangladesh also has land acquisition rule. Our neighbour India has extensive experience of open pit mining. In Bangladesh about 3-3.5 lakh people may need to be rehabilitated from mining region for open pit mining for development of all the mines. For a democratic government it may not be a major challenge considering the overall national benefits that availability of huge coal resource and its manifold use would bring about good impacts.

EP: You are suggesting steps to start coal mining must be taken without wasting a day even. How it is possible? Where exploration should start at first?

HM: I believe action to set up coal based power plant installation must start if possible from today. To make coal based power available mining must start at Phulbari first. The reason behind this is that only Phulbari mine is now ready after discovery and other extensive studies.

I also believe that exploration of natural resource will invariably have environmental and social impacts. There will not be any exception here also. But all actions must be taken to mine coal making minimum impact on environment and protecting the rights of affected population.

EP: In that case which company will implement Phulbari Mining? The government has an agreement with Asia Energy.

HM: After signing an agreement there is no scope to disoblige it. It could be more appropriate if an agreement like PSC with provision for cost recovery and exploration-exploitation could be concluded. That would have better protected Bangladesh interest.

On the other hand it has to be decided upon discussion whether Asia Energy or government will carry out open pit mining at Phulabri. But we must keep in mind that extensive government support is a must for mining by Asia Energy or any other company at Phulbari.

EP: Then what you suggest to make the start?

HM: Decision should be taken by the government constituted high powered committee comprising of Asia Energy, agitating civil society representative right now on Phulbari mine development. If necessary the government may seek assistance from Australia, Germany and of India who have vast mining experience. These countries have extensive expertise and experience of coal mining.

Simultaneously the government must finalize the coal policy eliminating provision of coal export. There is no scope to waste time waiting for coal policy anymore.

EP: So are you talking about mining at Khalaspeer and Dighipara also?

HM: Not at all. I have talked about Phulbari only. The alliance government awarded the lease permission to a Bangladeshi-Chinese JV for Khalaspeer without inviting tender. This must be investigated. No initiative should be taken for mining before proper investigation. Petrobnangla has also signed MOU with a Korean Company for mining at Dighipara. It should also be investigated. Without tender no mining lease should be given to anyone anymore.

EP: What are your views on proposed tri-nation gas pipeline and other regional energy cooperation initiatives?

HM: It was a wrong decision for Bangladesh not to proceeding with the tri-nation gas pipeline initiative. Besides, Bangladesh must actively participate in other SAARC, BIMSTEC, Central Asian and Middle Eastern energy ring and grid projects. This must be done in view of our long-term energy security.

Date: 17 March 2009


Posted in Asia Energy, coal, phulbari | Tagged: | Leave a Comment »

“Social and Environmental Impacts of Mining-Australian Lessons on Mitigation”

Posted by phulbarinews on October 20, 2008

Khondkar Abdus Saleque

Recently the author had opportunity to read a report on Phulbari Open pit Coal Mining of Bangladesh, “Open Pit Mining for Coal: Horror Feeling Shrouds Northern Bangladesh.”  It will not be prudent to challenge the contents of the report. But there are ways to mitigate the social and environmental impacts associated with coal mining, any mining. Exploration and exploitation of any natural resource has some form of impacts. These need to be managed and mitigated. A country like Bangladesh with finite natural resources cannot have the luxury to keep its resources buried for ages and continue to suffer from energy crisis. Some sacrifices need to be made unfortunately for greater gains of community. Some decisions need to be taken from head keeping the heart open.

Bangladesh as we all know is on the grip of the worst ever energy crisis. For various reasons its predominantly monofuel energy generation, supply is on the verge of collapse.  Industrial growth has almost become stand still; authorities are struggling to meet the demand of existing consumers. Crisis still persists even after making various load management and adjustments. Government does not have many options. It is extremely difficult for a developing economy like Bangladesh to import all its energy needs from very expensive and competitive world energy market. Extensive exploration and development for Petroleum may discover a few more gas reserves or expand the existing reserves. But these may not be enough to ensure the long term energy security of a country which can achieve a double digit growth for several years if only smooth supply of energy could be ensured. Bangladesh is believed to have about 65-70 tcf equivalent very high quality (High heat content, low ash content) bituminous coal reserve in the northern part of the country. Some of the discovered mines are at relatively shallow depth.


The prevailing geology (water saturated Dupitilla Overburden above coal layer) makes these ideal for surface — open pit mining. The other traditional option underground mining may be risky, uneconomic and not viable. We all know that surface mining can produce 85-90% coal in place while underground mining can produce only 20-25%. Both options have extensive environmental and social impacts. Surface mining will obviously impact the people of the region. They will need to the relocated, adequately compensated, properly rehabilitated. Other environmental concerns and impacts are to be appropriately mitigated.  

Bangladesh, a resource constraint country has very limited capacity of its own to take up mining with its own technical and financial resource. What can Bangladesh do? Can it wait and let its economy suffer irreparable damage or should it start mining in the most appropriate and economic method to explore most of its coal addressing all environmental and social issues as far as practicable? Bangladesh is not the one and only country of the world where these kinds of issues exist which complicate decision-making. But the countries have taken initiative to mine and mine economically taking the most appropriate economic mining options addressing all social and environmental impacts. Environmental groups are stronger in other countries. But government is also pro active and very alert to the people’s well fare. Mining proceeds without much fuss and national economy benefits from appropriate mining methods. But in Bangladesh government remains perplexed, hesitates to take decision, national energy security continues to go from bad to worse. Why the government is not trying to learn? 

Many non-resident Bangladeshis are engaged in appropriate research in reputed universities on environmental and social impacts of mining; few Bangladeshi professionals are also working in similar active mines. Instead of hearing from horses mouth why Bangladesh Government is getting confused from various myths and propagandas of a motivated section of society when business community and local entrepreneurs are urging government to take immediate decision on coal mining? The author has talked with few line professionals and some researchers in Australia and is presenting the lessons learned about the impacts of mining and mitigation measures.

A unique readiness to develop and deploy new technologies has enabled Australian minerals industry to endure the tough times, reap the benefits of the current resources expansion, and confront the industry’s pressing environmental responsibilities. The Australian mineral industry does more than use of technology to mine smarter. It is a world leader in the actual development of new mining technologies aimed at improving the industry’s performance. Beyond the discovery of the more effective and efficient ways of finding and extracting minerals, this innovation results in better ways of reducing environmental impacts, more effective ways of rehabilitating areas disturbed by mining, safer an healthier ways of working in the mines and more efficient ways of marketing and exporting products and services.

Mining & Sustainability

Some people say that the concept of “sustainability is increasingly emptied by unsustainable activities such as mining. Mining provides number of goods but it is base on the extraction of non-renewable resources and is unsustainable. Despite opposition from anti-mining campaigners, mining has been officially declared as “sustainable” in the world summit on Sustainable development. Humanity definitely needs certain amount of minerals to satisfy basic needs and it is also equally true that over consumption in one part of humanity may cause adverse impact on the livelihoods and environments of the other humanity, at the receiving en of mining. What is required is a perfect balance. Mining is an activity that needs to very properly planned with all probable and possible impacts identified, evaluated and mitigation planned. Mining is an activity that needs strict monitoring and control at every stage. People living in mining areas should have the capacity to take fully –informed decisions on the permissions to mine in the territories or decide on how to carry out activity and ensure environmental conservation and social justice. 

What is Mining?

Mining refers to the discovery and extraction of n minerals, metal or non metal , lying under the surface of the earth .Metals are mixed with many other elements , but occasionally large quantities of certain metals concentrate in a relatively small area are as deposit. The impacts of mining are related to mining itself, which frequently involves or produces hazardous substances. 

Mines vary in size according to extraction/ production per day. The method of mining specific mineral depends on the type, size and depth of the deposits and economic and financial aspects of the undertaking. Underground mining used to be the most commonly use method to extract large deposit until the middle of the 20th century. Technological progress and development of larger and more powerful machinery after the Second World War promoted opencast mining. The underground mines generally have less visible impacts on the environment than opencast mines. There is less disturbance of the grounds surface but it can affect the water by contaminating with acids and metals and by intercepting aquifers. The workers are exposed to more hazardous situations than those working in opencast mines. Progressively underground mining is being abandoned due to problems of profitability. Presently 60% of the materials mine in the world is extracted by opencast method causing devastation of ecosystem. 

Opencast mines look like a series of terraces arrange in great deep wide pits in the mile of a desolated and stark landscape, lacking any living resources. Quarries are surface mines, very similar to open cast mines, resulting in a desolated landscape with deep trenches between wide steps. Chemicals are used in leach mining to dissolve the metals from the mineral containing it, obtaining a very high rate of recovery. The chemical contaminates the surface and ground water. 

Environment and social Impacts of Mining

Mining is short-term activities with long-term effects. It is carried out in various stages, deposit prospecting and exploration stage, mine development and preparation stage, mine exploration stage and treatment of mineral stage-each involving specific environmental impacts. Preparation of access routes, topographic and geological mapping, geophysical work, hydro-geological research, deforestation of the land and elimination of vegetation affecting the habitats of hundreds of endemic species, consequent erosion and silting of the land, reduction of water table, contamination of the air, water and the land by chemicals such as cyanides, concentrated acids and alkaline compounds and air pollution caused by dust, gases and toxic vapour can have diverse affect on the environment and health and social life of the local communities.

Sulphur dioxide released from the mine causes acid rain, carbon dioxide and methane released by burning fossil fuels are the two greenhouse effect gases causing climate change. The sound of the machinery and the blasting in mining conditions that may become unbearable for local people and the forest wildlife. 

The Impacts of Mining on Women:

Mining also has distinct impacts an added burden on women. The women are deprived of the access to the benefits of mining developments, especially money and employment. Women become marginalised as the traditional roles of food gatherer, water providers, care – givers and nurturer are very much affected. Many women are pushed to enter into informal economy to find additional sources of income as the adverse impact to the environment caused by large –scale mining decrease the productivity of the fields and poisoned wild foods, marine life and animals. Alcohol abuse, drug addiction, prostitution, gambling, incest and infidelity increase in many mining communities which worsen cases of family violence against women, active and often brutal discrimination of the women in the workplace that is sanctioned or ignored by judicial and political institution. 

Lessons To Be Learnt From Australia:

Mining of coal and other mineral resources are one of the major backbones of Australian economy. Australians are no less environmental conscious nation than any. This is a country where freedom of speech, independent press, very transparent policies, and equal rights are prevalent. So it should not be considered irrelevant if one prescribes to follow Australian way of addressing and mitigating the social and environmental impacts of mining. Bangladesh can be immensely benefitted if it learns from Australian experience and trains its mining professionals in Australian mining industry. 

Let us have an insight into the sustainable planning for managing the impacts of mining at Moranbah and Bowen basin in Queensland, Australia.

Coal Reserve in the Bowen Basin

•          The Bowen Basin coalfield is one of Australia’s primary coal mining areas.

•          Sufficient known reserves exist in the Bowen Basin for over 200 years at current extraction rates.

•          The coalfield has some 20 operational mines, with a further 10-15 under consideration or in the early development stage.

•          Future development activity over the next 5-10 years is likely to be concentrated in the Moranbah and Nebo areas. 

 Issues to be Managed

•          Expansion of mining operations

•          Increase in workforce to support expansion

•          Rapid increase in Moranbah’s population — permanent and transient

•          Accommodating the workforce/population growth

•          Constraints on town expansion — coal reserves

•          Balancing local and State interests – valuable coal resources versus town expansion

•          Immediate, short, medium and long term management issues.

•          Mine expansion issues:

–         Environmental Impacts

•          Air quality

•          Noise

•          Water

•          Land disturbance

•          Mine rehabilitation

•          Mine subsidence

•          Methane gas emissions 

Managing the Issues

Ÿ         The Minister for Environment, Local Government, Planning and Women decided that the State will assist the Belyando Shire Council in resolving the issues associated with growth at Moranbah by:

–         establishing a Moranbah Growth Management Group (MGMG);  and

–         preparing a Mining Town Sustainable Management Framework.

The main task of the Moranbah Growth Management Group is to assist the Belyando Shire Council to prepare and achieve broad agreement to a Master Plan for short, medium and long-term options for sustainable management at Moranbah. 

•          Membership of the Group is to comprise

–         Jim Pearce, MP (Chair);

–         Belyando Shire Council;

–         Department of Local Government, Planning, Sport and Recreation;

–         BMA;

–         Anglo Coal;

–         Department of Natural Resources, Mines and Water;

–         The Office of the Coordinator-General; and

–         Others as required.

•          The Moranbah Growth Management Group will identify issues, policies and options, which may be taken to the Coal Industry Taskforce for consideration.  The Coal Industry Taskforce regularly reports to Cabinet Budget Review Committee on the progress of the Coal Infrastructure Program of Actions and will incorporate reporting on the Moranbah Growth Management Group into these reports.

Issues identified by MGMG

–         The need to identify options to manage immediate and short term growth

–         The timing and sequencing of development options to manage growth, which may also influence a correction in the housing market

–         The need to consider medium and long term issues to ensure sustainable management of Moranbah

–         Water supply

–         Management of the cumulative impacts of the current expansion of mining operations and any future plans to establish open cut mining operations in close proximity to Moranbah 

Sustainable Management in Mining Towns

Planning for Sustainable Communities

–         Managing the cumulative social, economic and environmental impacts

–         Managing cultural impacts

–         Managing the urban lifecycle – stages of growth (urbanization), decline (suburbanization), and rejuvenation (reverse urbanization)

–         Managing risks

–         Collaborative approach

–         Corporate Social Responsibility

–         Balancing a productive mining industry and sustainable and vibrant communities

–         Capacity for economic diversification 

Sustainable Management Outcome Statement

Protecting social, economic, cultural and environmental values and economic growth for the State for future generations in meeting community and mining industry interests. Through the State and local governments, the mining industry and communities are working collaboratively to support sustainable and vibrant communities and a productive mining industry.

Sustainable Management in Mining Towns

Planning for Sustainable Communities

–         Managing the cumulative social, economic and environmental impacts

–         Managing cultural impacts

–         Managing the urban lifecycle – stages of growth (urbanization), decline (suburbanization), and rejuvenation (reverse urbanization)

–         Managing risks

–         Collaborative approach

–         Corporate Social Responsibility

–         Balancing a productive mining industry and sustainable and vibrant communities

–         Capacity for economic diversification

In the past, Australian mining industry has had to overcome problems associated with harsh physical conditions and remote locations. Advanced technologies have been employed to reduce the high cost of operating in such adverse circumstances. A powerful motivating factor encouraging the use of new technologies has been the need to minimise the environmental impact of minerals industry activities. Such adoption and adaption of innovation has enabled the mining industry to survive decades of tough times, when it barely recovered the cost of investment capital. The industry has been able to employ technology to increase supplies even when prices were down, environmental and social stewardship responsibilities increased. 

Advanced Technology in Exploration

Air borne geophysical techniques are important in modern exploration. Remotely sensed data obtained from platforms in space and in air provide high-resolution images of the earth’s crust. When these are combined with other data in sophisticated imaging and modelling softwares, they enable the identification of targets for detailed ground investigation.

Innovative Technology for Extraction and Processing

In mining and mineral processing, Australia is leading the world in harnessing new technologies such as biotechnology, ICT and e-commerce.

Examples include
The continual refinement of mine shapes and designs using advanced computer-modelling software. Use of intelligent robotic ore loaders in mining processes. Australia is also a world leader in the development of a comprehensive industry wide policy to improve heath and safety, both mineral operation and surrounding communities. Projects have aimed to improve the safety of drilling equipment, examine wear and tear of plant and equipment, develop risk analysis methods for the running of mine side operation and employ behavioural studies to examine issues such as fatigue management and impact of shiftwork on sleep management.

Environment Impact Mitigation Measures

The Australian mining industry is committed to achieving continual improvement in its environment management performance. This is demonstrated through strategic leadership initiatives such as “Enduring value- the Australian Minerals Industry Framework for Sustainable Development”

Some of the key technologies assisting the industry to minimise resource use and mitigate contamination risks are:
Dust suppression and soil stabilising products, which save up to 80% of the water normally used while also reducing labour and equipment costs.
Oxygen probes develop by CSIRO, capable of assessing levels of gaseous or dissolve oxygen concentrations in soil, ground water, bioreactors and tailing storage facilities in order to monitor potentially toxic waste.
Bio -fixation treatment system, which remove most contaminants and pollutants from waste water, effluent or soil, minimising environmental impact and providing a low n-cost treatment for the removal of suspended solids, ammonia and nitrogen.
Gas, ground water, aquifer and subsidence management in mines
New technology for the revegetation and rehabilitation of mined environments, such as Ecosystem Function Analysis technique developed by CSIRO.

Bangladesh sooner or later will have to start coal exploration. Given the geological, geophysical reality of the mine belt underground mining at least in Barapukuria and Phulbari will never become economically viable. Pursing this will be waste of time, energy and money. The population directly impacted can be relocated, compensated and rehabilitated. There are proven technologies to address all the perceived environmental impacts. Bangaldesh must realise the domestic coal industry will take 20 years to develop skills and capacity to even plan, manage mining and operate. We have to engage major mining companies, which have greater skills, appropriate technologies and greater all-round capacities to address and mange all challenges of mining in Bangladesh.  Our policy must have adequate incentives to encourage major mining companies. Small companies with inadequate resources and technology will take us for rides like the Chinese company in Barapukuria .It will benefit a particular section of society to squeeze benefit. Delay in coal mining will frustrate our efforts to attain energy security. It will benefit the coal importers and smugglers and their beneficiaries who want our coal to remain buried. Will facilitate neighbouring country to continue dumping poor quality coal to pollute our environment. Will Bangladeshi patriotic politicians judge the situation in its truest perspective?


Date: 20 October 2008, Bangladesh

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

Coal for Regional Energy Security

Posted by phulbarinews on September 9, 2008

Khondkar Abdus Saleque


The 15th SAARC Summit held in the Sri Lankan capital Colombo in early August unfortunately did not achieve much headway towards progressing meaningfully on regional energy cooperation. It is a popular belief that regional energy grid, power polling are essential in attempting to achieve the sustainable energy security for one-fifth of the population of the world most of whom are living under poverty level in the region. The author has just received the Energy Security Quarterly report of USAID SARI/Energy prepared by Centre for Energy Economics of The University of Texas at Austin. The report has been available at a very critical time when the countries of the region are getting increasingly anxious for their long-term energy security. Some countries of the region especially Bangladesh is suffering from serious energy crisis. Not that it has any basic energy resource. It has substantial unexplored coal; it still has substantial unexplored Natural Gas. But for various constraints and impediments it cannot economically exploit its own resources for energy generation. Indian booming economic development also needs huge resource or access to secure and sustainable regional energy supply. So is the case with Pakistan. Bhutan and Nepal have enormous hydropower generation potential. Next-door neighbour Myanmar, breakaway Russian republics and Iran can be potential suppliers to the region. The geo-political regional tensions and lack of mutual respect of equal sovereign rights are among major deterrents. Lack of smooth and secured supply of energy is causing serious impediment in all countries of the region. Not that there are dearth of resources or technical capabilities. Somehow or other the strong political will and commitment to achieve the regional cooperation are missing. At this critical stage the report of USAID may act as guiding beacon for the countries of the region. The report may be accessible for fortunate few. For the general enthusiasts of the region the salient features of the report are discussed here with specific reference to Bangladesh situation.


Bangladesh desperately needs to generate at least 4000MW new power generation by 2012 and set up required transmission and distribution infrastructures to overcome the present deficit and retrieve the security of supply in power grid. With the uncertain mono-fuel gas based generation the only other feasible option is to go for coal-fired generation to get some large base load power plants to take the pressure away from natural gas. The leading coal using countries of the region India and Pakistan can be the example in this situation. Cooperation among the SAARC nations to explore and exploit the coal resources of the region may help overcome many unnecessary myths. Combined technical and financial capacity of the SAARC countries will be extremely useful in developing resources and infrastructures to share and exploit those in the most economic way.


Bangladesh despite of its miserable energy supply situation so far failed to explore and exploit its significant coal resource due to absence of appropriate strategy, lack of in-house expertise both technical and managerial and for aggressive attitude of ill motivated theoreticians. For its mere survival in the very competitive energy market Bangladesh will have to start coal mining in the most economic way in not too distant future. The just published USAID Quarterly report can be a useful guide to Bangladeshi policy makers.


Coal as major source of Energy Generation

There is no denial that fossil fuels will continue to dominate energy sectors of the world although the environmentalists consider fossil fuel is the major culprit for greenhouse gas emissions causing global warming. Coal as the most abundantly available a widely preferred fuel for power generation it is perhaps at the centre of the balancing act. Coal-fired power plants are the largest source of GHG emissions. South Asia like other region of the world has the same situation. The largest Country of the region India still generates 50% of its power from coal. Other countries like Pakistan and Bangladesh have significant coal resource also. These together can contribute significantly for the regional energy security if developed commercially. Integrating electricity grids in the region can further mitigate risk associated with depending on a single fuel or imported fuels, while balancing various generation sources in the region, including coal, hydro, natural gas, wind and other renewable. The report indicate that the coal sector in the region has very limited private sector investment, lacks certain regulations an standards, and presents environmental challenges. The report also considered that new investment along coal value chain as well as the best practice mitigation of environmental impacts is urgently required in order for coal to meet growing demand of electricity in the region.


Coal Industry Trends

28% of primary energy needs are met from coal. Electricity sector alone accounts for about two thirds of total coal consumption, generating more than 40% of electricity consumed in the world. Remaining coal consumption is mainly in other industrial sector such as steel production. It has however very limited domestic and commercial use.


Coal for Energy Security

Coal is the major contributor for energy generation even in countries which have significant other resources. Canada and Mexico generates about 15-20% of its electricity from coal. In OECD Europe the share in fuel mix is about 30%. The most industrially developed USA Coal contributes about 50%. The recent global surge of oil and natural gas price underline the critical contribution of coal in generation portfolio. Japan having very limited coal resources of its own relies mostly on imported coal for generation of about 25% of its power demand. In Europe even there has been renewed interest in coal despite of efforts to control Green House Gas Emissions. Italy will increase its reliance from 14% to 33 % over the next 5 years. German Government is setting up 26 new coal plants abandoning nuclear power. USA however had to abandon 75 of its planned 150 new coal plants failing to get regulatory approval. USA is more inclined to nuclear plant while it opposes such moves in other countries a double standard.

USAID report identified three major reasons for resurgence of coal. These are

1. Coal resources are relatively abundant and distributed around the world.

2. Coal fired power plants meet base load requirements of electricity system.

3. Coal prices have relatively low and stable.


Coal resources are relatively abundant and distributed around the world: World’s recoverable coal reserve now is about a trillion tons. It is expected to last about 150 years compared to 40years for oil and 60 years for natural gas. Most of the countries have some coal reserves but 70 countries have recoverable reserve with ongoing production.


The following table shows the top 10 producers and exporters in 2006. China is expected to become net importer soon. Experts feel that if this transition follows a path similar to China’s transition into a net oil importer, international coal trade will increase significantly along with price of coal, until exporters catch up with increased demand.


Coal fired power plants meet base load requirements of electricity systems: Coal plants cannot be ramped up and own much, which means it cannot follow electricity load. The capital costs are relatively high but the operation costs are very low. Coal plants produce the cheapest and most reliable electricity. They can run constantly at high capacity to meet the base load needs of electricity systems. The coal plants may loose some competitive edge in future when regulation may add carbon emissions costs.


Levelised Costs of Different Generation Technology at 10% discount.


Natural Gas



Micro Hydro











Inv 50%

Inv 20%

Inv 70%





O&M 15%

O&M 7%

O&M 20%

O&M 13-40%



$30-70per MWh

Fuel 35%

Fuel 73%

Fuel 10%






Coal prices have relatively low and stable: Since early 2007, the price of Coal caught up with that of oil and surpassed that of natural gas. But the recent surge probably reflects a temporary adjustment in the coal market as the supply infrastructure (mines, railroads, ports and ships) tries to keep up with rapidly rising demand and perhaps more importantly, the impact of some natural disasters (flooding in the mines of Australia in early 2008). Even then coal remains cheaper than oil and natural gas on a heat content basis, even when adjusted efficiency differences between coals fired and combine cycle gasfired generation. Russian gas to Europe reached $11-12/MMBtu while Japan paid more for LNG since the price is linked to that of oil. In 2006 & 2007, Spain and South Korea paid $15-20 /MMBtu for LNG cargoes on spot basis.


Major Producers





Export %

Major Importers



























South Africa















76 %
















Coal Scenario of South Asia

India is the major producer and user of coal. It ranks fourth with 10% of worlds total reserve after USA (27%), Russia (17%) and China (12%). Present prove reserve of Pakistan, Bangladesh, Afghanistan and Nepal are very negligible in the context of world’s reserve together representing only 1%. But the production also is negligible. India has mostly anthracite and bituminous coal, Pakistan has mostly lignite. Bangladesh mines small quantity of bituminous coal from the lone underground Barapukuria mine and use it for mine mouth power plant while lower quality coal is imported from India for brickfields and use in steel re-rolling mills. All coal-consuming countries in South Asia are net importers as the following table will evidence.


In South Asia exploration activities are mostly done by state owned companies. Coal resources have not been appraised independently. The resources should be reassessed and reserve classification system at par with international practise must be done. Geological Survey of Bangladesh is working on establishing a detailed reserve classification approach, which may require international support. Such a resource assessment will also help identify the potential for Coal Bed Methane production.


Despite of present uncertainty about the reserves coal resources of Bangladesh, Pakistan and Afghanistan can be significant and could substantially add to power generation fuel mix if necessary investments are made in exploration and development. Low mine mouth cost of coal in the region (less than $10/ton in Sindh in Pakistan an $13-20/ton in India compared to about $25/ton in Indonesia) renders domestic coal very attractive compared to imported coal for power generation. Bangladeshi policy makers must note this. Indonesia has higher royalty compared to India and Pakistan that makes Indonesian coal more expensive even in their own country.


Domestic coal use for power generation in India costs $36 to $48/ton while imported coal can be as high as $ 160/ton including Cost, Insurance and Freight (CIF). Most coals now mine in the region has a calorific value of about 16MMBtus per ton while imported coal typically has 20-24 MMBtus per ton. Even after adjusting for heat content, imported steam coal is much more expensive than domestic coal.


Afghanistan, Bhutan and Nepal produce coal of higher heat content, similar to imports, but much lower in quantity than the total regional needs. Bangladesh is believed to have higher heat content and lower ash coal. Transportation from Bhutan, Nepal and Afghanistan to Pakistan and India due to transportation constraints may offset the price advantage.


Trade Infrastructure

Coal accounts for about 28% of the world’s primary energy needs. It is second to oil, which supplies over one third of the worlds energy needs. But coal trade is not in similar proportions. Natural Gas trading due to rising activity of LNG is trading higher than coal now. Coal trading is now about 16% compared to about 29% of natural gas and 60% of oil. These reflect the historical preference of producing countries using coal domestically and the smaller need for importing or exporting coal as many countries have some production. As bulk commodity, transportation of coal over long distance is relatively more costly. Railways, barges, ports and ships necessary to complete coal supply chain are capital intensive investments require long term certainty about market viability.



Coal in South Asia (thousand tons) 2005/06








Sri Lanka








Net Import






Reserve (% of world)







Production (% of world)








R/P (years)


2 x 700






Imports (% of cons)








Global coal trade is projected to increase from 815Mt in 2006 to more than 1,150Mt in 2030. In South Asia strategic investments in rail and barge capacity within and across countries can encourage investment in coal exploration and development across the region. Traditionally, interstate trade in South Asia is limited to export of rather insignificant volumes of coal from India to Bangladesh. Nepal, Bhutan, Pakistan and India import coking coal via marine terminals from abroad primarily for metallurgical sector. India has decentralised export of coal, Nepal imports coal strictly through the Royal Government. India levied a hefty 26.33% export duty; Afghanistan has banned coal imports from Pakistan.


Coal Trade

Asian countries import about 55% of worlds steam coal .It may still climb to 61% in 2030.China which used to be self sufficient may soon become net importer mainly from Australia. Indian demand is projected to shoot double between 2005-2030. Australia and Indonesia would export most of the coal for China and India. Indonesia exports three quarters of its 129Mt production. Its unique location and existence of a large number of experienced competitive mine operators make the country a perfect source of coal for neighbouring Asian Countries. Bangladeshi think tank often brings Indonesia as reference when they talk about coal exploration and exploitation. Will Bangladesh ever attain the situation of Indonesia? Can Bangladesh be compared with it in any way? So any reference to Indonesia while discussing the coal mining issues is not only irrelevant and but also is intellectual dishonesty. But Bangladesh may learn lesson how Indonesia managed to attract major coal mining companies to invest in mining there.


Japan, Korea, Malaysia and the Philippines are long time customer of Indonesia and soon India will also be its major importer. So obviously export is a major incentive. As Indonesian export potential is expected to grow further companies of different countries are taking position in the country. Tata Power Company bought stakes in Indonesian companies, Aumin Kaltim Prima Coal for $1.3 billion in early 2007.


On the other hand Tata proposed US$3 billion investment in power, steel, and Fertilizer and coal sector of Bangladesh hibernated for many years for Government indecision before being withdrawn. In not too distant future Bangladesh may need to import coal from Tata was allow to own Coal mine in Indonesia while Bangladesh found all possible excuses to frustrate Tata investment . Who knows whether Bangladesh deliberately kept gas exploration suspended over the last 5 years so that it does not prove enough gas facilitating commitment for Tata proposed industries?


Tata also proposed for open cut mining of Barapukuria mine and use the coal for power generation in their proposed power plant and steel mill in Bangladesh. Now Bangladesh is caught in its own trap. It does not have enough gas available in national grid to meet its own requirement. Proper utilization of coal still remains matter well into the future. In Bangla there is a proverb which means, “Stoping someone’s beginning cutting ones own nose”


Sri Lanka and Pakistan will also rely on coal from Indonesia.


Australia is also major player in the world coal trading. It exported 231 Mt in 2006.In 2006-07 India alone imported 21Mt coal from Australia. Many private companies operate mines and export from Australia.BHP billion has formed alliance with Arutmin in Indonesia to market Artumin’s production internationally, and owns operation in South Africa, South America and North America. BHP Billiton Energy Coal South Africa Ltd, one of the largest energy coal exporters in the world. BHP Billiton, Anglo Coal, Xstra and Rio Tinto are the four large companies which lea coal export operations from Australia and South Africa, two largest source of coal for South Asia other than Indonesia.


Coal and Environment

Environmental impact of coal mining operations has become a serious concern in South Asia. In Bangladesh, the development of Phulbari coal mine having an estimated coal reserve of 572Mt, using open-pit mining method is facing opposition from a section of civil society groups on the grounds of resettlement issues and negative environmental impacts. Artisan mines in the region lack proper maintenance, often operate unofficially without control of authorities, and damage the surrounding water and ecological resources.


On the other hand increased availability of high quality coal could have net positive environmental impacts if it replaces fuels that are more damaging to the environment. Brick manufacturers in the region use wood or used tires as fuel whenever coal is unavailable or prices are uneconomic, leading to deforestation and increased emissions. Brick kilns equipped with higher performance furnace s, scrubbers and good quality coal would not only prevent further deforestation but also reduce emissions. Brick kilns around the world have successfully transformed from burning wood, tires and other products with efficient technology to cleaner burning fuels and furnaces. Bangladesh has been pursuing a strategy of replacing other fuels with natural gas in kilns but limitation on pipeline networks, gas demand supply imbalance and requirement of gas for other users has hindered this effort. Bangladesh now imports inferior quality coal from India. There have been allegations of smuggling of substantial quantity of poor quality of coal also from across the border. This coal syndicate is extremely influential. Utilisation of this coal in uncontrolled way is also contributing to environmental degradation in Bangladesh.


Coal mine, brick kiln and similar energy intensive operations must be properly monitored The Government may mandated coal mine operators to submit environmental performance mitigation bonds that would be gradually paid back throughout the development of a project. Bhutan introduced such measure in 2002, Indian Bureau of Mines has recently developed liability bonds a legal guarantee of a mine operator to comply with the approved mine closure plans. More efforts of similar kind should help improve environmental stewardship is well monitored.


In addition, best environmental practices in pre-combustion, combustion and post-combustion periods can reduce environmental impacts significantly. Pre-combustion, coal may need to be cleaned of impurities, which will not only increase market value of coal but also improve its combustion efficiency and hence reduce emissions. This is called coal beneficiation, targeting sulphur and ash reduction. In addition to conventional method of physical and chemical cleaning, biological cleaning is now emerging. Organic sulphur is removed by chemical cleaning techniques such as molten – caustic leaching. Biological cleaning uses bacteria that “eat” the sulphur out of coal. Scientists are experimenting with fungi and are trying to duplicate the enzyme inside of the bacteria that eat the sulphur. If successful, these enzymes can speed the cleaning process when injected into coal directly.


During and post-combustion, there are two basic approaches to using coal in a more environmentally friendly manner.


·      To reduce emissions by either reducing the formation of pollutants such as nitrous oxides (NOx) or cleaning the flue gases or both;

·      To increase the thermal efficiency of generation facilities (either by using a higher grade coal or technology & design improvements) so that les coal is used to generate the same amount of power.


Combined approach would yield better results. Some of the technologies include pulverized coal combustion, atmospheric pressure fluidized bed combustion, cyclone fired wet bottom boilers, and integrated gasification combined cycle (IGCC) with carbon capture and storage. Many other methods are more regulatory in nature such as requiring sorbent injection for sulphur oxide (SO2) emissions reduction and particulates removal from flue gases; yet others require combining power generation with heat uses such as cogeneration in industrial facilities or for district heating.


Bangladesh will definitely start exploration and exploitation in more appropriate way in not so distant future. Considering its already vulnerable state of adverse impact due to global heating from Green House Gas emission it must adopt very careful an calculative approach of coal burning.


Coal Potential in South Asia

India traditionally relied on domestic and imported coal for its energy generation. It has huge reserve and it is also the third largest producer and consumer of coal in the world. But recent surge of Indian economic development even coal cannot keep pace with its expanding energy demand. India does not have substantial oil and natural gas reserve. Bangladesh and Pakistan have also started considering giving more emphasis on the development of their own coal resource for long-term energy security.


Bangladesh however is caught in the quagmire of confusion and indecision. It has about 75 Tcf equivalent high quality coal in place. Some section of civil society consider that for ensuring 50 years energy security there is no scope of considering export of coal. Off course question of export can only come if there is enough surplus after meeting the country’s present and emerging demand. The country is suffering from chronic energy crisis. There is massive deficit of electricity. Bangladesh desperately need generation of at least 5000 MW new generation by 2012 and then on about 1000 MW must be added to fuel its growing economy. Bangladesh does not have oil. Its major resource natural gas resource is not huge. Moreover, years of non-action in exploration and development have brought proven gas resource to the verge of depletion. In this situation coal is the only viable option. Some of the coal reserve is also relatively shallow. Open pit mining can help recover 85-90% of the coal in place. But some people want government to ban the open pit mining. The other method underground mining is neither safe nor economic. More expensive mining wills yield only 20-25% of the coal in place. Bangladesh also does not have technical or financial capability to mine itself. It has to rely on foreign major coal mining companies. But some Bangladeshis do not welcome foreign investment. Off course certain FDI in energy sector in Bangladesh had bitter experience.


In this situation if Bangladesh cannot formulate investment friendly coal policy it cannot mine its coal for its energy security. It is relatively easy to deliver appealing statements and shed crocodiles’ tears for others. But real professional life is very different extremely challenging. The gentlemen who do not want economic method of coal mining and do not want Bangladesh explore its resources in the off shore are acting as agents of the foreign force who does not want Bangladesh to achieve financial autarky. Some people are playing with the sentiment of the people of the coal region. For the greater benefit of the nation government must remain very firm and do whatever is required to explore maximum coal economically adopting state of the art technology and off course maintaining strict control on environment and safety issues. The affected people must also be properly compensated, relocated and rehabilitated. Some evil motivated elements have misguide the innocent people of the region that coal mining will make them loose everything, they wont have place to live and the area will be turned into desert.


The Government of Bangladesh must make sure that these unnecessary panics are well taken care off. This present uncertain situation of energy cannot be overcome unless the government takes appropriate action to start coal mining. The cost of in action is far greater than the cost of action. In Bangladesh only the 250 MW mine mouth plant at Barapukuria is operating since January 2006.


Both Bangladesh and Pakistan relies mostly on natural gas for meeting growing energy demand. But delays in new exploration and development investment and depletion of existing fields limits the growth potential of natural gas. Until coal and natural gas reserves (including coal bed methane) are assessed and those found to be economically prospective are developed, coal imports using existing infrastructure offer a short-term panacea to the regions energy shortage.


India and China jointly account for 72% of the forecasted increase in worlds coal demand from 2004 to 2030.Almost 70% of the growth in India will be used for generating power. Both Pakistan and Bangladesh also project coal deficit in the mid-run, although primarily of coking coal which is used in metallurgical and cement sectors.


Coal to diminish power deficit: pricing of coal and electricity

Most of the countries in South Asia recognize the potentially crucial role for coal as relatively low cost fuel for power generation. India has encouraged captive mining associated with power generation for decades. Bangladesh started production from its first coal fire power plant mine mouth of its lone active coal mine at Baprapukuria in 2006.A new mine at Phulbari may start development despite local an environmental opposition. The raft coal policy of Bangladesh among others provides export after meeting 50 years of meeting the domestic demand. Pakistan has started to pay increase attention for accelerated development and utilization of coal resources. Further investment in coal sector in these countries may depend on changes in administered pricing mechanisms for coal and electricity.


Coal pricing policies in the region has undergone some changes in recent years. Coal India Ltd is allowed to set prices of coal for all power generators and 75% of other industries – 25% of coal use by the industrial sector can be acquired through auctions, tenders and imports. Only coking coal is allowed to follow an import parity pricing regime. The raft Bangladesh Coal Policy provides a pricing regime linked to international price for export purposes as well as domestic consumption except for mandatory mine mouth power generation.


Electricity tariffs in most of the South Asian countries are set of approved by authorities after a competitive biding process. In Pakistan, the National Power Regulatory Authority has recently set the levelized tariff for domestic coal fire generation based in Sind province at $0.078055 per kWh for long term energy supplies, while in India the latest domestic coal plant was approve with the levelized tariff of $0.0498882 per kWh. The difference between the two tariffs is large and could possibly be use to the disparity between the administered price of coal in India and the market price of coal from private mines in Pakistan.


The tariff in India is competitive with gas fired plants. Central Electricity Regulatory Authority of India has recently reconfirmed a tariff of $0.05745 per kWh for Agartala Gas Power Station, commissioned in 1999. In contrast a levelized tariff of $0.0574772 per kWh was approved for 4,000 MW supercritical power plant in the Gujarat province develops by Tata Power Company Ltd. The higher tariff is considered justified because the project is to be fuelled by imported coal and has higher capital costs due to use of modern and efficient technology.


Infrastructure constraints

Railroad system is the major means of coal transportation in South Asia. Intrastate and especially interstate railroad system require upgrades and expansions. Coal transportation in India by rail has been steadily decreasing over the last few years. The railroad system is overloaded and accommodation of additional coal freights might represent challenge. Already due to insufficient capacity at some parts, coal is being transported by the more time consuming and expensive rail-cum-sea route. Bangladesh Rail, while moving approximately 3.5 Mt of freight per year over its entire network has significant spare capacity. With certain improvements necessary for coal transportation and rehabilitation of certain parts of the rail system of the country could import more coal or when situation will permit transport domestic coal into different parts of the country.


River systems in India and Bangladesh are conducive to extensive coal transportation. Bangladesh when the situation will arise may barge all its coal for export to marine terminals without straining rail system. Bangladesh recognized the challenge and proposed a comprehensive coal relate infrastructure study and plans to develop a Coal Zone in the northern part of the country. In Bangladesh, the lack of sufficient domestic production and absence of marine coal terminal made government rely on the only available import route, which is by rail from India. Some coal is also imported by road. Coal imported from India, contains significantly higher level of sulphur than that allowed by government. This is ridiculous that Bangladeshi environmentalists never raised any objection against it. Coal mafias must be very smart.


Bringing in new blood

State owned companies dominate the coal industry in South Asia.CIL is the major player in India with almost82% of the total domestic production. Another SOE Singareni Collieries Company Ltd accounts for 8% another public company, NLC is responsible for about 3%. Despite partial liberalization of the coal sector from the mid-1970s, there was no significant private participation until recently. The share of private sector increase from 3% in 1996 to about 6%.Private coal developments are primarily captive, that is , tied back to back legal and commercial obligations by the end user with priority given to power and steel sectors.


In Bangladesh, the state owned Petrobangla’s coal subsidiary dominates the sector, operating the major Barapukuria underground mine with annual production of about one Mt per year. While encouraging new coal development, the raft coal policy in Bangladesh contemplates export only after 50 years of supplies have been guaranteed for the country. International developers are not very keen to risk investment in Bangladesh for many reasons. Bangladesh has not demonstrated any skill so far in organising and managing coal exploration and operation so far. It is very unlikely that any major international coal mining company will be interested to risk investment in Bangladesh if there are no attractive incentives for them in the coal policy.

Pakistan coal sector is forme mostly by private companies although the public sector is involved through federal and regional development corporations. The state owned Pakistan Mineral Development Corporation accounts for about 10% of coal production in the country but block 1 of Thar coal field, the largest coal field in the country is to be developed by Hasan Associates of Karachi, while exploration license for block 2 was granted to Associated Group of Lahore. Pakistan Government recently decided to unbundle coal mining and power generation in the Thar basin creating the Coal Mining Company. In Afghanistan, about 20% of coal production falls on state -controlled North Coal Department. Coal Industry in Bhutan is privatised. In the above scenario the proposed draft policy provision of creating a new Khonibangla to take up all future coal mining having joint venture with private company may not be the correct strategy. Bangladesh does not have any in-house mining capacity. No major coal mining will be interested to form joint venture with a new company in a country having no mining tradition but having too many theoreticians to crate impediments and confusions.


Technological challenges

Indian coal sector in the recent past has increasingly relied on open pit mining due to certain set backs in underground mining. Low productivity and reserve recovery in production of coal from underground mines can be explained by the inadequate exploration and geotechnical investigations of coal horizons, roof and floor rocks and partly due to the foreign equipment supplier not matching the equipment with ground conditions”.


The raft coal policy of Bangladesh allows for open-pit mining but spells out prerequirements before operations can start including environmental and socio- economic impact assessment and mitigation strategies. Open pit mining is generally more cost effective, reduces health and safety risks to mine personnel and carries fewer technical risks. In Afghanistan, the large number of small artisanal mines that use primitive technologies and equipment due to lack of adequate investment and regulation reduces productivity and increases environmental impact of coal mining operations.


Limited exploration efforts

Pakistan has plans to increase coal production from less than 4 Mt to 20Mt by 2015.Bangladesh must also increase production from current about one Mt to 20Mt within the next decade. But if the present confusion and inaction persists and it can not adopt an investment friendly workable exploration strategy Bangladesh energy crisis may further deepen. In India, exploration has been almost exclusively carried out by the Central Mine Planning & Design Institute Limited (CMPDI), an affiliate of CIL. Private companies have been denied any participation in exploration efforts .As such private sector coal exploration experience is absent. The Geological Survey of Bangladesh has ha limited success in exploration efforts. Like India Bangladesh does not have any private sector experience of exploration. But India has very strong public sector with very strong professional groups. Bangladesh does not have that capacity even. Although Pakistan allowed private companies to operate, its coal resource remains underdeveloped. Afghanistan registered some success with development of coal resources, with international aid.


Countries of the region realized the impediments. There has been recent push for policy change. Newly rafted coal legislations in the region recognize the nee to attract international companies not only in terms of financial resources but also for skilled and experienced manpower, modern technologies and environmental best practices they can offer. India allows 100% foreign equity in captive coal mining but restricts participation of foreign companies in noncaptive projects. Recently CMPDI was approved to provide exploration services to private companies on contract basis.


A new Mineral Policy in India was recently approved and a Commercial mining bill was introduced to the parliament to amend the Coal Mines (Nationalization) Act of 1973. The new legislation provides for auctioning of the coal fields instead of current practice of allotting them to companies. In 2006, 15 blocks with total reserves of 3.6 billion tons have been allocated to private parties in power sector and 23 more blocks with total reserves of 3.6 billion tons to private parties in other sectors.


Bangladesh is also currently reviewing draft coal policy that allows for open cast mining and coal exports. New provisions, such as mandatory requirement for coalmine operators to build mine mouth power plants, are aimed at mitigating the electricity deficit in the country. A flexible approach can be recommended as mine operators are not traditionally in business of building and running power plants; associated frameworks for coalfired generation investment may be needed.


In Pakistan, the National Minerals Policy was introduced in 1995, which contains favourable fiscal conditions for potential investors. The government has also established a Mineral Investment Facilitation Board and established provincial Departments of Mines and Minerals in order to facilitate license issuance and lease granting. Private sector is already operating largest fields in Pakistan.


Regional Electricity Trade

Increasing coal fired generation capacity in South Asia, along with generation based on natural gas, hydro, and renewable such as wind and solar would contribute significantly to meeting growing energy demands in the region and improving the quality of life of the citizens of South Asian Countries. These benefits can be enhanced via increased trade of electricity through an integrated grid, or power pooling. Coal as relatively cheap base load generating fuel, can provide an anchor for regional electricity trade over this integrated grid relatively.


Power Pooling

Power pooling is coordination of activities of neighbouring power grid operators in order to increase reliability of power supply and reduce costs. The degree of grid integration and the number and type of players in power sector will determine how deep a pool will be. Power pool usually evolve from infrequent bilateral exchanges of electricity between utilities via few interconnecting transmission lines to central exchanges where many players (generators, consumers and traders) schedule power at varying prices throughout the day benefiting from a highly integrated grid that facilitates flow of electricity from and to many points on the system. Typically open access to the grid is required for enhancing trade and a regional regulator can ensure access and monitor other pool activities for fair and efficient operations.


The first power pool was created in North America in 1927. The North America now has three major reliability regions (highly integrate grids) covering multiple states in the U.S. and provinces in Canada as well as some trade with Mexico. The North American Electric Reliability Corporation (NERC) is responsible for ensuring reliable operation of the transmission system in North America in close cooperation with utilities and regulators.


Another major regional initiative is the NordPool which was established in 1993, the first multinational exchange for trading electric power. Currently , there are several other regional other regional initiatives including the following ; Southern and West African Power Pools ( SAPP and WAPP), Energy Community of South East Europe, Greater Mekong Subregion Power Trade Organization in Southeast Asia, Central American Electrical Inter Connection System ( Known with its Spanish acronym, SIEPAC), South American Regional Energy Integration Commission.


Benefits of Power Pooling

Fundamentally, power pools offer several interrelate and mutually reinforcing benefits;


·      Increasing reliability (sharing reserves, emergency assistance, joint planning of generation mix and transmission expansion).

·      Increasing efficiency and hence reducing costs (reducing the nee for individual reserve margins, balancing peak loads across regions, relating transmission and distribution losses).

·      Investment costs and hence the long term price of electricity (economies of scale with access to larger market, lower reserve margin needs).

·      Environmental benefits (increased efficiency reducing emissions, easier investment conditions for renewables)


Potential for Power Pooling in South Asia

South Asian Countries can also benefit from a regional electricity pool. Per capita consumption of electricity in the region is significantly below the world average of roughly 2,400kWh. Electricity shortage as demonstrated by frequent blackouts and load shedding are anaemic in the region. The Central Electricity Authority of India estimated energy deficits in 2007 at 9.6%. The situation is not different in Bangladesh and Pakistan, where load shedding is the only way the system can be balanced due to shortage of generation capacity. A significant handicap is the large amount of system losses, official transmission and distribution losses for Bangladesh, India and Pakistan are about 25% of generation as compared to 5-6% in civilized countries. Although investment in new generation capacity is needed to keep up with growing demand, reducing these losses will help increase access to electricity in the short run and reduce the need for new generation. Creating an integrated grid and operating efficiently would help reduction of losses.


Electricity South Asia

In most countries in South Asia, electricity electricity generation is predominantly mono fuel based. Bhutan and Nepal depends almost exclusively on hydro, Afghanistan also have same situation, Hydro also plays major role in Sri Lanka and Pakistan. Sri Lanka depends on oil for about 60% of its need , depending on seasonal availability of Hydro capacity. Bangladesh depends about 90% of its need on natural gas. India uses coal for almost 50% of its generation. Natural gas also plays a very important role in Pakistan.


Electricity is already traded in the region on bilateral basis. Afghanistan imported more than a quarter of its consumption from Iran, Turkmenistan, Uzbekistan and Tajikistan. India provide grant assistance to Bhutan for building 1416MW of hydro facilities, out of which it imported 5.7Twh.There is also two way trade between India an Nepal, the later importing 266Gwh and exporting 101GWh.


The trade can be enhanced further with regional grid. In addition to Bhutan and Nepal, neighbouring countries such as Tajikistan and Kyrgyzstan have hydro potentials that surpass their domestic needs significantly. India, Pakistan and Bangladesh can develop further thermal capacity, mostly based on natural gas, if more investment in domestic resources takes place, an international gas pipelines and LNG import terminals are built connecting resources in the region as well as other parts of the world with consumers. Regionally produced and imported high quality coal can further diversify fuel portfolio in the region. The hydro-thermal mix at regional level would enhance system reliability (balancing seasonal fluctuations in water levels), increase electricity availability, reduce the need for oil imports and generate revenues for Hydro exporting countries, Bhutan and Nepal.



Electricity South Asia










Annual Consumption per Capita (kWh)









System Loss (%)









Net Imports










Role of Coal and Interregional Electricity Trade in Energy Security

Energy security in South Asia can be significantly enhance is domestic coal resources can be developed, coal imports can be increased and a regional power pool can facilitate electricity trade supported by a diverse generation portfolio of coal, hydro, natural gas and renewable. Coal will allow countries to diversify away from imported oil and natural gas, provide a power generation fuel, the price of which has historically been more stable. However, best environmental practices in coal mining, transportation and combustion should be adopted. A regional power pool, which can use cheap hydro resources and stable coal generation to meet the base load, would make power available to more consumers around South Asia in amore reliable way and at a lower cost.


The quarterly report of USAID most of which is included in this write up can be used as a guide for the policy makers to make comprehensive mid and long term plan for developing domestic resources in more economic and environment friendly way. Regional forum must more meaningfully work out power pool. Countries of the region must combine their technical expertise and skill to assist less fortunate countries to explore and exploit their resources, diversify fuel mix and finally countries must work together to set up power pool for energy security of the region.



Date: 01 September 2008, Bangladesh

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Draft coal policy likely to get final seal in Oct

Posted by phulbarinews on September 8, 2008

Abir Mahmud

The much talked about national coal policy is set to be approved in early October as the energy ministry has planned to place the draft of the policy to the council of advisers again. “We are now working on incorporating observations over royalty rate, land reclamation and environmental issues, which were the much discussed about during a discussion of the council of advisers over the draft coal policy and,” energy secretary Mohammad Mohsin said.

He said the draft of the policy would be sent to the council of advisers by early October next for approval. The council of advisers last month sent back the draft coal policy to the energy ministry for further scrutiny of the issues related to royalty rate, mined land reclamation and environmental issues. During the meeting, headed by the chief adviser, Fakhruddin Ahmed, at the Chittagong circuit house, the advisors discussed the policy draft for hours and of the opinion for some changes to the draft policy. They were, however, unanimous over that a coal policy was needed to immediately develop the country’s coal reserves and mitigate the mounting energy crisis.

Sources said, investments worth several billion US dollars have long been hanging over the draft national coal policy that got its current shape following several changes carried by the previous successive governments, energy ministry officials said. UK-based Asia Energy, South Korean Luxon Global and US-based Global Vulcan Energy are among the foreign companies now eyeing closely over the national coal policy to initiate their project works of coalmine development and setting up coal-fired power plants, they said.

Indian business conglomerate Tata group, that had investment proposals worth US$ 3.0 billion including development of a coalmine and setting up a coal-fired power plant, recently pulled back after waiting for over two years due to indecisiveness of the government, it was alleged. The foreign investment proposals still pending with the Board of Investment (BoI) include include $2.5 billion from the Asia Energy, $ 1.6 billion from the Vulcan Energy, $1.5 billion from Luxon Global, a senior BoI official said.

In the draft national coal policy it was recommended that no foreign companies would be permitted to develop coalmine independently. Foreign companies would be allowed to develop country’s coalmines under a joint venture with local coalmining company, it noted. Like elsewhere in the world coalmines in Bangladesh can be developed by either open pit or underground method. But the mining method should be determined on the basis of geological structure and reserve potentials, draft policy suggested. A Coal Sector Development Committee comprising professionals from all walks would be constituted for smooth operation of coalmines and relevant activities.

The committee would fix the royalty rate of different coalmines considering mine-specific geological structures instead of the existing mining rules where the royalty rate has been fixed at 6.0 per cent for open-pit mines and 5 per cent for underground mines. Awarding of licences for coal explorations from any coalmines through open tenders, whereas the existing rules say that the licences would be awarded on first-come-first-served basis, the draft policy recommended.

The country’s existing Land Acquisition Act to acquire required land and compensate the displaced people from the mining sites to ensure smooth development of coalmines and its subsequent utilisation, it noted. The globally accepted guidelines of ‘equator principles,’ should be adopted to ensure adequate management of environmental and social issues relating to coalmines, the draft policy said. The draft policy said there would be no option of coal export other than ‘cocking coal’ in the coal policy. Setting up coal-fired power plant at the mine mouth would be made mandatory for developing any coalmine it recommended further.

During the meeting of the council of advisers some felt that there should have some guideline before the proposed committee for fixing royalty rate.Some also opined that mined land should be returned to owners while others felt returning the land to the owners would be a complex and huge task. They were also of the opinion to ensure environmental safeguard out of coalmining.


Date: 07 September 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.




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.




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.



Date: 15-21 August 2008, Bangladesh

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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.


Date: 13 August 2008, Bangladesh

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Govt.’s indecision is the main problem for coal extraction

Posted by phulbarinews on July 27, 2008

Sanchita Seetu

The main problem for coal extraction is the indecision of the govt. The speakers took part in the debate over coal extraction and said there is no alternative of coal extraction and the govt. need to take decision immediately in this regard. But, few of them opined to approve the coal policy first. Dr. Badrul Imam, Prof of Geology at Dhaka University said all the issues like investment proposal, royalty, private-public partnership etc are incorporated in the coal policy, so the coal policy should be finalized first. The other issues, not included in the policy can be resolved through discussion. Mr. Kamrul Islam Siddique, former Chairman of PDB said there are three investment proposals for coal mine development have been awaited for govt.’s approval. These proposals should be approved reviewing the existing Environment Act and Minerals Rules without any delay. Dr. Izaz Hossain, Professor of Chemical Engineering at BUET said a small but economically viable pilot project which is acceptable to all can be started after govt.’s approval; and large scale mining will be commenced minimizing the difficulties arises in the pilot project. The country’s coal reserve can be used to generate electricity of 20,000-MW over a period of next 20 to 30 years. Therefore, coal needs to be extracted depending not on gas only.

SM Mahfuzur Rahman, Prof. of Economics at Dhaka University said the crisis for gas is alarmingly increasing day by day, and it may happen that coal will to be extracted using candle light. Renewable energy is not sufficient to meet the energy crisis. Dr. M Tamim, Special Assistant to CA for Power, Energy and Mineral Resources said the coal policy has been sent to the Advisory Council, and the present investment proposals will be approved by open tendering process following approval of the Advisory Council.

Edited by: M A Hossain


Date: 27 July 2008, Bangladesh

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Open Pit Mining Method is Most Suitable Option for Bangladesh

Posted by phulbarinews on July 23, 2008

Dr Raisuddin Ahmad

Senior geologist of LionOre Australia Pty Ltd, Dr Raisuddin Ahmad, has termed Bangladesh’s coal sector a very promising one to accelerate the country’s national economy. Dr. Rais has been working in ‘Black Swan Nickle,’ mine in Carlgorlley, Australia, one of the deepest nickel mine in the world. Born in Narsingdi, Bangladesh, Dr. Rais has obtained his higher degree in geology and mineral industry in Bangladesh, USA and Australia. He was involved in teaching profession for long in Australia. Dr Raisuddin is also a former fellow of Australia’s number one ranking National University said, “Coal can be a useful and effective alternative source of energy to ensure the country’s future energy security and help developing the national economy.”

“But to utilize the country’s coal reserve potentials a bold decision and its immediate implementation are necessary,” Dr Raisuddin Ahmed further stated to Energy & Power Editor Mollah Amzad Hossain during his recent visit to Bangladesh. Following are the excerpts.

EP: Bangladesh has huge coal reserves. But the country is yet to tap its potentials. According to you what are the bottlenecks the country faces and how it can be overcome?

RA: Bangladesh is now facing multifaceted problems like lack of necessary and realistic vision, policy-related complexities and weakness in taking appropriate and timely decisions. Overcoming these bottlenecks is intricate but not impossible. Firstly the government’s vision needs to be changed. The government should be open, free from political confrontation and come out of conservative approach. Appropriate decision should be taken without fear and adequate measures should be taken for its quick implementation. The government must have to maintain strong monitoring especially in the case of social and environmental issues associated with coalmine development and immediate rectification is a must if a wrong is committed. An independent monitoring system can be considered involving eminent scientists, academicians of the country.

EP: How you see the prospect of coal sector in Bangladesh and how it can be utilized?

RA: Coal sector in Bangladesh is very promising. The government must not do any further delay in taking decision on coal sector development. Bangladesh is already lagging behind in utilizing coal resources. The global practice is that around 70-80 per cent of coal is used in coal-fired power plant in the coal-rich countries like USA, China, Germany and Australia. Despite having huge potentials Bangladesh has only one 250 MW coal-fired power plant, which is also struggling for regular supply shortages of coal due to application of wrong mining method in Barapukuria coalmine. The gas reserve of the country is depleting quickly with growing demand and Bangladesh doesn’t have any alternative other than immediate extraction and uses of its coal resources. The preferred option for Bangladesh would be to use coal for base load power generation and save valuable gas resource for other productive uses.

EP: By the way you mentioned about Barapukuria coal mine, what should be the appropriate mining method in Barapukuria?

RA: Geologic reality and economic consideration should come first for selecting mining method. It is very much site specific. In Bangladesh, the main challenge for underground mining is to maintain the subsurface water bearing Dupi Tila layer overlying the coal seams. It is also a challenge for open pit mining. Thick coal seam and unconsolidated overburden materials are also factors in safe and economic mining of the coal resource. Considering the overall geological structure and soil condition of Barapukuria coalmine I must say open pit mining method is most suitable for its mining.

EP: There is a controversy regarding selecting mining method for Phulbari Coal Field. Which method you suggest appropriate for Phulbari?

RA: As the geological structure and soil condition of Phulbari is similar to that of Barapukuria, the open-pit mining method would be a suitable option for getting the maximum benefit out of it. But the authorities concerned must have to be careful about pollution, degradation of environment to maintain a natural equilibrium. Mine dewatering will have significant impacts on underground water regime in the area. But there are well-tested mitigation measures in the world to minimize the impacts of dewatering. RWE Mine, Germany is a great example of efficient subsurface water management. Bangladesh must have to implement those mitigation measures and experiences to ensure availability of water to the affected communities. The local people who will loss their land and other assets for open-pit mining must have to be properly compensated. After coal extraction, the affected lands must have to be reclaimed and rehabilitated for productive uses and should consider returning back to the owner or their successors. The mining should be done in phases to ensure that huge numbers of local people do not need to be rehabilitated at once. The local people must be given proper employment and other opportunities to maintain their livelihood with better status than before.

EP: Bangladesh has several coalfields. According to you how Bangladesh can go ahead to develop those.

RA: As currently Bangladesh has no expertise in coalmining, initially one or two coalmines should be developed with assistance from foreign companies. Foreign companies can develop Bangladesh coalmines under contracts. The remaining coalmines should be kept for local companies to develop. Manpower should be developed through necessary training. Provision should be kept in the contract with foreign companies to ensure employment of maximum number of Bangladeshi nationals. Arrangements should also be there so that local expertise develop seeing and experiencing the works of foreign companies.


Date: 16 July 2008, Bangladesh

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