Bangladesh and coal

In its review of the mining industry of Bangladesh, the U.S. Geological Survey states that the country has "small reserves of coal, natural gas, and petroleum."

As of 2011, coal supplied only 2.5% of the electricity generated with gas accounting for almost 80%. In May 2011, the country's overall coal production was around 3,000 tons a day, from the lone operational state-owned Barapukuria coal mine in Dinajpur. The bulk of the coal from the mine is supplied to the existing Barapukuria Coal Power Plant which, while comprising two 125 megawatt generating units, is rated as having an installed capacity of 200 megawatts.

While current coal used for power generation is low, that could change significantly. With a low per capita electricity consumption, rapid economic growth stimulating a rapid increase in electricity demand and shortages of gas for power generation, the Bangladesh government is looking to domestic and imported coal to fuel a significant proportion of its ambitious power generation expansion plans. In its 2010-2011 annual report the Bangladesh Power Development Board flagged that the government wanted an additional 12,000 MW in capacity installed by the end of 2016, 24,000 MW by 2021 and 39,000 MW by 2030.

The state-owned company, Bangladesh Oil, Gas and Mineral Corporation, which is commonly known as Petrobangla, is involved in oil and gas exploration, production, and distribution. It is also "involved in the exploration for and production of such minerals as coal, granite, and limestone for the manufacture of cement", the USGS reports.

National coal mining policy
As of 2011, the government has a plan to generate over 10,000 mw of electricity from coal-based power plants by 2021 and 20,000mw by 2030 under its proposed coal sector master plan. The plan calls for over 50,000 tons of coal a day for generation of electricity by 2015, which would double by 2021. Of the targeted electricity, 11,250 MW would come from plants burning coal from domestic mines, while the rest would be generated at the plants run by imported coal. As of 2011, the country's overall coal production is around 3,000 tons a day from the Barapukuria coal mine in Dinajpur. The government claims the country has coal reserves estimated at around 3.0 billion tons in five mines, including Barapukuria, and is looking to mine the other four.

A subcommittee formed to develop a coal mining city selected four potential areas in Dinajpur: Parbatipur, Nawabganj, Birampur and one other. The government is working to develop the mining city for coal mining, coal mine reclamation, and relocation of the local people that would be affected.

The first draft of the national coal policy was prepared during the regime of previous government in December 2005. The incumbent Awami League-led government finalised a new draft of the national coal policy in 2010, which proposed waiver of corporate tax for contractors or licensees to encourage coal mine exploration, development and marketing, as well as a rebate of import duty, tax and value added tax (VAT) on the import of machinery for use in coal mining. National coal mining plans have been widely opposed by local residents, particularly those who would be displaced by the mines.

On May 30, 2011, New Age reported that the Bangladesh government had started to try to build public opinion in favour of open pit coal mining extraction from the deposits located in the northern districts, in particular the Phulbari coalmine. The government had also started developing a mining town in Dinajpur close to the coal deposits in Phulbari and Barapukuria - the Phulbari, Barapukuria and Dighipara coal deposits are in Dinajpur. Initially, the proposed area of the new town would be 30–100 acres of land, with the government expecting that it will grow in size as economic activities expand.

A subcommittee of the convening committee, formed to choose a site for the proposed mining town, selected four places in Dinajpur, including Parbatipur, Nawabganj and Birampur. An official said that the subcommittee had decided to develop the mining town in Dinajpur because of the "need" to tap the coal deposits of the Phulbari, Barapukuria, Dighipara and Khalashpur, and the Madhyapara hard rock mine. According to the state-run oil, gas and mineral resources corporation Petrobangla, there are five deposits of about 2,500 million tonnes of high-quality coal in the three northern districts.

Mines
For a map of proposed and existing mines, see the bottom of this page.

Barapukuria coal mine
Petrobangla’s coal mining subsidiary is Barapukuria Coal Mining Co. Ltd (BCMCL) owns an underground coal mine at Barapuluria in the Dinajpur District. While initially designed to produce 1 million tonnes a year from a longwall mining operation," the mine has encountered strong community opposition, dissatisfaction of the workforce with the company and limited production. Approximately 70% of the output from the mine is supplied to the existing Barapukuria Coal Power Plant.

The 2,500-acre underground mine includes 650 acres of agricultural land on the surface. The International Accountability Project reports that mining operations at Barapukuria have destroyed roughly 300 acres of land, impacting about 2,500 people in seven villages, as land subsidence of over one meter in depth has destroyed crops and lands and damaged homes. People in 15 villages have also reportedly lost their access to water, as huge quantities of water pumped out for the Barapukuria mine caused a rapid drop in water levels. The mine has been the subject of substantial community opposition and the subject of ongoing protests.

The mine was initially developed and operated under a six year agreement with a consortium comprising the China National Machinery Import and Export Corporation (CMC) and Xuzhou Coal Mining Group Company. However, ahead of the the August 2011 expiry of the agreement the Barapukuria Coal Mining Company sought expressions of interest from mining companies for the further expansion of the mine. While Peabody expressed interest in the project the sole bidder on the contract was the existing operator, a consortium comprising and CMC. BCMC entered into a new contract for a further six years with the expectation that output from the mine - running at approximately 800,000 tonnes in 2011 - would double the following year.

In its 2011 annual report BCMC stated that in the new contract a target annual production of 5.5 million tonnes of coal a year has been assumed. Part of the output from the proposed expansion would be for the proposed Barapukuria 3rd Unit, a 250 megawatt expansion of the existing Barapukuria Coal Power Plant.

For further details see Barapukuria coal mine.

The proposed Phulbari Coal Project
A London-headquartered company, GCM Resources (which is also referred to in some reports as Global Coal Management), has also proposed the development of the Phulbari Coal Project. On its website, GCM states that the Asia Energy Corporation (Bangladesh) Pty Ltd, a wholly owned subsidiary of GCM Resources plc, has a contract with the Government of Bangladesh 'for exploration and mining of coal in Northern Bangladesh'."

Many in Bangladesh oppose the Phulbari Coal project. According to Asia Energy, 40,000 people would be involuntarily resettled by the project, although activists say the number of people evicted is likely to be ten times more. The mine and associated infrastructure will use up 10,000 hectares of primarily fertile agricultural land. The project would also divert a river for the water needed, pumping out 800 million litres of water daily, and lowering the groundwater in an area covering 500 square kilometers. Dynamite explosion, environmentalists say, would cause noise and dust pollution, increased by the trucks and trains that will haul away the coal to the port in Sundarban. Asia Energy plans to create a huge lake after the project is over, but activists predict that the water is likely to be toxic.

The project was stalled, in the planning phase, when emergency rule was imposed in Bangladesh in January 2007, after widespread protests against the mine. However, following national elections in December 2008, a new administration is actively reconsidering the mine. It has also been revealed that a leaked December 2010 US diplomatic cable revealed that US Ambassador to Bangladesh James Moriarty had urged the prime minister’s energy advisor to authorize coal mining, saying the “open-pit mining seemed the best way forward.” For further details on the controversy over the mine see Phulbari Coal Project.

Citizens groups campaigning on coal mining

 * International Accountability Project
 * Mangrove Action Project
 * Phulbari Resistance
 * Phulbari Resistance, Facebook group
 * Society for Environment and Human Development (SEHD)

Existing coal plants
The only coal-fired power station currently operating in Bangladesh is the 250 megawatt Barapukuria Coal Power Plant which is owned an operated by the Bangladesh Power Development Board (BPDB).

Power generation plans
In November 2010 Reuters reported that the Bangladesh Power Development Board (BPDB) had announced the aim of generate 9,000 megawatts of electricity by 2015. The country currently produces approximately 4,000 MW of electricity a day "against peak hourly demand of over 6,000 MW."

The BPDB called for tender bids on a number of new power plants including two coal-fired plants. One is a 300MW coal plant to be built near Chittagong port. The tender closes at the end of January 2011. The board has also sought tenders for a 650MW coal plant to be built near Mawa. Both projects are proposed to be constructed on a build, own and operate basis for 25 years.

Reuters reported that BPDB officials stated that in the near future they would call for bids for "10 new power plants to add another 4,000 megawatts of electricity to the national grid."

As of May 2011, the government has said it plans to generate over 10,000 mw of electricity from coal-based power plants by 2021 and 20,000mw by 2030 under its proposed coal sector master plan. Of the targeted electricity, 11,250 MW would come from plants burning coal from domestic mines, while the rest would be generated at the plants run by imported coal.

In August 2011, the Asian Development Bank (ADB) approved a loan of $300 million for the country's energy sector. The loan will fund the replacement of five aging generation units at Ashuganj power station, along with wind, solar, and diesel projects.

Bangladesh signs deal for imported electricity, joint venture, and power plants with India
In March 2011, it was announced that Bangladesh will sign a power purchase agreement with India to import 250 MW of power, as well as a separate deal for the two countries to form a joint venture company - between Bangladesh's Power Development Board and India's National Thermal Power Corporation - to set up a 1320 MW power plant at Rampal in Khulna in Bangladesh. NTPC already conducted the feasibility study to install the plant in Khulna, as well as another 1320 MW plant in Chittagong in Bangladesh.

Bangladesh was in discussion with Indonesia over lease of coalmine sites to feed the Khulna and Chittagong plants, which would require three million tonnes of coal annually. Seven other countries — Australia, South Africa, China, Canada, Vietnam, Kazakhstan and Poland – have yet to respond to the proposal as of May 2011. A joint study team planned to carry out a massive dredging through the Mongla Port so that vessels carrying capacity up to 20,000 tonnes could enter the port. The Mongla Port Authority later objected to allowing the use of its jetty to unload imported coal, saying they do not have the required infrastructure.

Bangladesh said it will import electricity subject to completion of the 120-kilometer joint gridline between Bharamara in Bangladesh and Baharam pur in India. Bangladesh placed an offer to India to import a further 250 MW power from a plant coming up in Tripura.

On July 7, 2011, India Foreign Minister SM Krishna said the country will sell 500 megawatts of electricity to Bangladesh and half of it will be available by the end of 2012 or early 2013, and he confirmed that India also agreed to install the 1,300 MW Khulna plant. Bangladesh Foreign Minister Dipu Moni said Bangladesh aims to nearly triple power generation to 15,357 megawatts (MW) by the end of 2015, and that the plan includes imports of 1,000 MW of power from India, Nepal and Bhutan.

On August 21, 2011, a Bangladesh Power Development Board official said the source of the coal for the Khulna plant had not yet been secured, but that “with help from the World Bank, we will appoint a consultant to help us find a source, and secure a deal with it.” Construction of the plant will be completed within around three years of awarding the contact for it.

Public opposition to joint venture Khulna plant
Environmental experts have expressed concerns that the proposed plant at Rampal might destroy Sundarban, one of the world’s largest mangrove forests, nine kilometres from the plant. About 2.5 million people depend on the Sundarban region, such as wood-cutters, fishermen, and honey hunters. An official said the Power Development Board would submit an environment impact assessment report to the Bangladesh environment department. In July 2011, the BNP acting secretary-general Mirza Fakhrul Islam Alamgir asked the government to shelve the proposed coal project at Rampal in Bagerhat, fearing that it might harm the Sundarbans. He also expressed solidarity with the locals who had been protesting the government move to set up the 1300MW plant at Satmari Katakhali of the upazila in collaboration with NTPC, which will use Indian coal that contains high sulphur.

Six plants proposed
In April 2011, Bangladesh Economy reported that the country's Power Development Board (PDB) had initiated a process to install six coal-fired power plants through private entrepreneurs to produce 1800 MW of electricity in Bangladesh. The projects would be implemented either under BOO (build-own-operate) basis or joint venture partnership, with plans for significant financing from financial Institutions. The estimated investment requirement for the plants is around Taka 21,000 crore ($3 billion US). Power ministry sources said the owner of the power plants would import the coal and ensure its transportation to the plants.

According to the PDB, a 600 MW capacity power plant would be installed at coastal areas or near the deep-sea areas. Another 600 MW plant would be installed at Mawoa near Dhaka. Four power plants, each having 150 MW capacity, would be installed at Khulna and Chittagong areas to "feed the commercial cities at proper manner," Chairman PDB ASM Alamgir Kabir said, adding: "Right now our main objective is to install six plants -- two at Khulna, two at Mongla and one each at Mawoa and Chittagong areas -- where we have infrastructure facilities to handle the imported coal."

The PDB had completed the initial work of installing four power plants at Khulna and Chittagong, and site and soil investigation, hydrological and geological studies and Environmental Impact Assessment (EIA) studies were planned.

In May 2011, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) AK Azad said there was a proposal to set up a coal-based power plant near Mongla and a memorandum of understanding had been signed with India to that effect. Azad said the project "should be implemented soon by overcoming bureaucratic bottlenecks as the World Bank will provide loans at a lower rate."

One coal plant, three oil plants approved
On Sep. 8, 2011, the cabinet committee approved four power plant projects with a total capacity of 735MW in the private sector on a build-own-operate basis. According to the proposals of the Power Division, a 522MW coal-fired power plant will be set up in Munshiganj by 2015, while three furnace oil-run power plants – a 108MW plant in Keraniganj, a 52.50MW one at Homna in Comilla, and a 52.50MW plant at Kathpatti of Munshiganj – will be built within 12 months. The Consortium of Longking-Orion Joint Venture will set up the 522MW coal plant, from which the state-owned Power Development Board will purchase electricity at Tk 4.09 per kilowatt-hour (unit) for 25 years.

Proposed coal plant with China in Chittagong
On Dec. 4, 2011, a top China official said Bangladesh and China are set to sign a memorandum of understanding (MoU) to build a 1,320 megawatts (mw) coal-fired power plant in Chittagong under a joint venture. Chairman of the state-owned Bangladesh Power Development Board (BPDB) said the plant would be be built by the BPDB and China Hudian Hong Kong Company. Both the firms will decide on share of stakes of respective firms, timeframe and costs to implement the power plant under the joint venture. The power plant will run initially on imported coal, and will consume local coal to generate electricity in future subject to its availability.

Underground coal gasification
The U.S.-based Clean Coal Limited has proposed to produce 5,000 megawatts power by using underground coal gasification (UCG) technology at the country’s deepest coalfield, Jamalganj. The government also a plan to install four mega power plants with imported coal, 1200MW at Meghnagat, 1800MW at Zajira and New Meghnagat, 2400MW at Moheskhali and Matarbari in Chittagong.

Solar Power
On May 16, 2011, Reuters reported that only 45 percent of Bangladesh's 150 million people have access to power, but that solar power is in place in nearly a million homes in rural Bangladesh. The World Bank had provided $130 million in 2009 financing to support the government's efforts to meet 10 percent of the country's total power demand from renewable energy sources by 2020. Renewable energy contributes less than 1 percent to overall power generation.

Gas and oil
See Bangladesh and gas and oil

Related SourceWatch articles

 * Global use and production of coal
 * India and coal

External resources

 * International Energy Agency, "Coal in Bangladesh in 2006", International Energy Agency website, accessed August 2009.
 * U.S. Geological Survey, "The Mineral Industry of Bangladesh", reports 1994-2007,
 * Chin S. Kuo, The Mineral Industry of Bangladesh: 2007, U.S. Department of the Interior, U.S. Geological Survey, December 2008.
 * Mark Muller, It's Not Only About Coal Mining: Coal-Bed Methane (CBM) and Underground Coal Gasification (UCG) Potential in Bangladesh", Mines and Communities, March 17, 2009.
 * "Coal sector", Energy Bangla.com, archive of stories.
 * "JS panel suggests speedy approval of coal policy", Energy Bangla, July 23, 2009.
 * Esther Tanquintic-Misa, "Bangladesh Prepares International Tenders for 4 Coal-Fired Power Plants", International Business Times, January 18, 2012.
 * Mahfuzul Haque, "Beginning of an end?", New Age Xtra (India), February 14, 2012.
 * A K Azad, Secretary Power Division, "Bangladesh’s Power Sector: Investment Opportunities", July 19, 2011.