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.
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.
Source: Weekly Economic Times, Bangladesh
Date: 07/09/08
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