Open pit mining method is most suitable for Bangladesh: Dr Raisuddin Ahmad

Abir Mahmud

Geologist of LionOre Australia Pty Ltd, one of the largest coalmines in Australia, Dr Raisuddin Ahmad has categorically termed Bangladesh's coal sector a very promising one to accelerate the country's national economy."Coal can be an useful and effective alternative source of energy to ensure the country's future energy security and help developing the national economy," Dr Raisuddin also a former fellow of Australia's number one ranking Australia National University said.But to utilize the country's coal reserve potentials a bold decision and its immediate implementation is necessary, Dr Raisuddin Ahmed told the Weekly Economic Times.Following are the excerpts of his interview given to the Weekly Economic Times when he visited Dhaka recently:
ET: Bangladesh has huge coal reserves. But the country is yet to tap its potentials. According to you what are the bottlenecks the country has 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 decision.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 and immediate rectification is a must if a wrong is committed.

ET: How you see the prospect of Bangladesh's coal sector and it can be utilised?

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.Despite having huge potentials Bangladesh has only one coal-fired power plant at Barapkuria, which is also struggling in coal production due to application of wrong mining method.

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

RA: Considering the geological structure and soil condition of Barapkuria coalmine I must say open pit mining method is most suitable for its mining

ET: And for Phulbari coalmine which mining method is appropriate?

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.The local people who will have to sacrifice their land for open-pit mining method must have to be properly compensated. Their lands must have to be returned to them or their successors after filling of lands.The mining should be done in phase by phase to ensure that huge numbers of local people need not to be rehabilitated at once.The local people must be given proper employment to maintain their livelihood with better status than before.

ET: Bangladesh has several coalmines. 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.Arrangements should also be there so that local expertise develop seeing and experiencing the works of foreign companies.

Weekly Economic Times

22/06/08

Link: http://www.weeklyeconomictimes.com/news-details.php?recordID=1172

Energy Ministry finalises coal policy, Inter-ministerial meeting on June 26

SHAHNAJ BEGUM

The energy ministry has finalised the coal policy recommending formation of "Khoni-Bangla", a management body to oversee the country's mineral resources including coal, hardrock, lime stone, silica sand and others, an authoritative source told The Independent yesterday.The energy ministry last week finalised the policy without making major changes in the draft policy prepared by country's renowned experts and sent copies to the ministries of forest and environment, law, land, finance, commerce, power, and NBR with a request letter to give their opinion and join the first interministerial meeting on June 26 following which it will be sent to chief adviser Dr Fakhruddin Ahmed for approval."The committee did not say anything about the coal extraction method. The issue should be coal field-specific. We simply brushed and trimmed it without touching the basic content of the draft except the land reclamation issue", a top official of the energy ministry told The Independent. It may be mentioned that the committee suggested to the government to examine the pros and corns of open-pit mining and that the government should go for open pit on a limited scale. The policy has not mentioned anything on it.It is learnt that the energy ministry in the policy suggested keeping the land reclamation issue under government's jurisdiction. However, the committee suggested to give the land to its owner. "20-30 years is a long time and the ownership may change in the meantime. Our observation is it would be a difficult task for government to identify the real owner. So we said that land would be kept under government jurisdiction and it would take decision," a top official of the energy ministry remarked. A 29-member standing committee 'titled: development committee', comprising government officials, experts, business leaders and members of civil society would act as the highest authority to give policy directives to 'Khoni-Bangla' from time to time. "Khoni Bangla", would work under the energy ministry and the Bureau of Mineral Development (BMD). It would be the authority to oversee coal exploration, marketing and investment through selecting method (open pit or underground mining) giving approval to Go-Private, Go-foreign and private -foreign ventures. The country has a known reserve of 2.7 billion metric tons of coal but there is yet no specific policy on coal development, although there are some rules and regulations to lease out coal fields to foreign companies.The main goal of the new policy is to ensure energy security by developing coal-fired power stations in the country. Though the country has five coal fields, four are commercially viable. The government in 2007 formed the eight-member committee comprising Abdul Matin Patwary, Vice Chancellor of Asia Pacific University (president), Prof. Nazrul Islam of University Grants Commission, Prof. Badrul Imam, Nazrul Islam of IIFC, Prof. Mostafizur Rahman, Muqbul-e-Elahi, Major General Ismail Farooq Chowdhury and Ataus Samad. The committee at its first meeting suggested inclusion of Prof Nurul Islam of BUET and M.A. Zaman (re-settlement expert) in the committee and invited other experts from time to time to know their views. The draft coal policy was prepared by the IIFC last year, which was amended six times. The policy suggested 6 per cent royalty for open-pit and 5 per cent for underground mining, but it suggested that fixing of royalty would be finalised by the government. Bangladesh Arbitration Act-2001 would be followed if any disputes arose.To discourage export, the policy said whatever method was adopted to develop a coal field it would produce only that much which would meet the local demand. It said coal is needed to ensure the country's energy security first. It may be mentioned that to ensure energy security for the next 50 years (at a rate of 8 per cent GDP growth), it needs to produce 41,599 MW of electricity by 2025. Aiming to slap conditions on coal export, the energy ministry upheld the committee's observation that the entire amount of the country's coal reserve is needed to produce electricity in future, as gas would be exhausted by 2015 if new discovery is not made. However, it allowed a limited export of coal after ensuring the country's 50 years' energy security and said only that portion of coal could be exported which has no market here, and in case of 'cooking' coal, it could be exported but after making it 'coke' (a raw material use in steel making).

The Independent

20/06/08

Link:http://www.theindependent-bd.com/details.php?nid=86951

Govt alone won't go for big investment in power generation, says Tamim

Star Business Report


The government says its involvement in future power generation will be on the basis of a public-private partnership.

The government alone will not go for big investment in power generation system anymore, said the special assistant to the chief adviser for the power and energy ministry. "What we change in the power sector is that government is not going to invest in a big way in power generation anymore. All government involvement in the future will be a public-private partnership," Professor M Tamim told a discussion in Dhaka yesterday.The discussion on Need of Energy Producers and Government Perspective was organised by the International Business Forum of Bangladesh (IBFB) at a city hotel. Tamim said formulation of an energy policy is now under process, which will lift the universal subsidy that benefits the consumers who do not need it. "It's the state's responsibility to provide power to the poor. But today, everybody is not poor. The people who can afford do not deserve subsidy and that has to be lifted. This type of consumers has to be separated. We are in the process of doing it," he said, adding that merchant power plant by both local and foreign entrepreneurs will be allowed under the new policy. "The free market economy allows such a power plant concept. Anybody can generate power. But the government will neither ensure fuel nor purchase that power," Tamim categorically said, urging the entrepreneurs to find market and fix the price of their produce. "If you find anybody to purchase your electricity at the rate of Tk10, please go ahead, produce electricity and make business of Tk4 out of Tk10. I have no problem. But don't ask me for fuel, because government cannot provide fuel or gas," he said. To mitigate the power crisis, the present government has decided to replace the country's oldest inefficient power plants, the special assistant said.He assured the local entrepreneurs that they would be awarded the task of rehabilitating any power plant that falls inefficient. "The local entrepreneurs can bid on the basis of price. If anyone likes to replace the Ashuganj power plant, a 20 percent efficient one, the government will ensure gas supply and also purchase the electricity produced there,” Tamim went on, pointing it out that the equity share between the government and the private sector would be on 49-51 percent basis. Mahmudul Islam Chowdhury, president of IBFB, Jalal Ahmed, chairman of Petrobangla, M S Islam head of international cooperation of Grameen Shakti, Steve Wilson, president of Chevron Bangladesh, and Ajay Nambiar, director (commercial) of Cairn Energy Bangladesh, also spoke on the occasion. They laid emphasis on new investment on energy sector, suggesting a search for alternative energy to mitigate the increasing demand.

The Daily Star
19/06/08
Link:http://thedailystar.net/story.php?nid=41776

If not coal, what?

FORREST COOKSON

The widespread attack by foreign NGOs against use of coal and the Phulbari Coal Project in particular is highly irresponsible. The basis of the attacks are five assertions repeated over and over:1. Open cast coal mines are bad.2. Coal mines cause a lot of dislocation of people.3. Mines will destroy valuable farm land that should be kept in agriculture.4. Private foreign investors exploit Bangladesh so should not be allowed.5. ADB should not participate in coal projects.These websites call for people to tell the ADB not to support the Project. Note that the Bangladesh government has not yet made a decision on the use of coal but these NGOs are trying to pressure ADB to reject participation, before the government’s views are known! This attack partially worked as ADB has now put aside its monitoring of the Phulbari Coal Project until the government decides what it wants! The ADB has not dropped its potential participation but is, properly waiting the government’s decision. In the meantime the NGOs are trying to build up international groups to oppose support by ADB for coal development in Bangladesh. The Bangladesh government should certainly listen to interested parties, but as a sovereign nation the leaders must decide what is best for Bangladesh. Neither the donors nor the NGOs have a right to try to force the government to act as they wish.The difficulty with these attacks by the NGOs is that they completely ignore the most important question: “How will Bangladesh fuel its electricity needs?” The answers to this question floating around are:1. Use natural gas instead of coal – but, of course, there is an acute shortage of gas that will take at least ten years to solve. The pressures by NGOs to stop mining of coal have already caused a two year delay in achieving any significant step towards developing Bangladesh’s coal sector. While there is potential for more gas in Bangladesh it has not yet been discovered. Until a hole is drilled and commercial gas quantity proven, it is prudent to diversify the sources of fuel for power plants. Furthermore, the best way to run the power system is to put the base load on to coal fired plants and handle the peaking demands using gas.2. Let Bangladeshis develop the coal resources without foreign participation: In Bangladesh there is very limited availability of experienced technical staff in designing and operating large coal mines (open cast or underground). The capital requirements for such mines are immense. Proponents of this idea know very well this is not feasible but it appeals to Bangalee nationalism. Of course in time Bangladeshi citizens will play a greater and greater role in the provision of skilled staff and capital for developing the coal sector but it will take a long time. The belief that there is staff and capital sitting around ready to implement coal projects is simply wrong. This path will slowdown the development of coal fired plants by at least a decade. If enforced for both coal and gas it is two decades!3. Develop nuclear power: This can only be achieved with use of foreign capital and technicians. Furthermore to build up to 8000 MWs will take 10 nuclear power plants. This cannot be done in 15 years. Using nuclear power will result in very intrusive safeguards and provide years of argument over the environmental impact. It is important to go forward with nuclear power but it cannot solve the problems of the next 10 to 15 years.4. Renewable energy: It is a particularly silly idea to think all of Bangladesh’s additional energy requirements can be met by renewable sources. Renewable energy is very expensive and its use in Bangladesh in solar form is heavily subsidised. Wind power potential is limited and wind power remains much more expensive than hydrocarbon based electricity. Just as for nuclear power renewable energy use should be encouraged but only hydrocarbon based power will provide needed electricity for the next 10 to 15 years. All these approaches proposed by foreign NGOs are simply wrong for Bangladesh! It is outrageous that these organisations should be undermining Bangladesh’s development efforts. Their position is “It is better to be poor than to develop the coal resources.”The position is so simple: Economic growth needs cheap electrical energy available only from use of coal and gas. Renewable energy is too expensive for mass use. The opposition by JACSES (Japan) or AID Watch (Australia) to development of energy in Bangladesh is a deeply immoral act. People sitting in developed countries using electricity at a high rate generated by coal, gas and nuclear plants are preaching to Bangladesh not to produce electricity with the coal and gas Bangladesh has! Let these people come and live in Bangladesh for five years without electricity at the income level of the median rural household. Perhaps they would then understand the urgency of expanding the power sector and accelerating economic growth. Expanding electricity availability for rural households is one of the most important tasks to be achieved; it is unfortunate that these foreign NGOs, judged by their actions, are working to keep this from happening.No doubt greater use of gas and coal will have some negative input on the environment. Should Bangladesh sacrifice its economic growth to reduce this adverse impact? Bangladesh does far less damage to the environment than either Australia or Japan. Let these NGOs clean up their own houses.Turning now to the objections.Open cast coal mines are bad: There is no alternative to the open cast mine. The technical problems [water regime, acceptable environment recovery] are manageable according to the world class mine design engineers engaged by Asia Energy. The government must insure that the vendor takes care of the environment. Rather than attacking open cast mines one should ask “How can we achieve this while protecting the affected population and the environment?” Open cast mines are necessary to build up Bangladesh power sector; otherwise not enough coal is available from underground mines. The target is 12 million mt per annum for power; this can never be achieved with underground mines. In any event expert opinion is that the coal deposits are only marginally suitable for underground mining.Coal mines cause a lot of dislocated of people: The critics miss the point, Asia Energy has to agree to resettle all affected persons in such a way that people are better off financially than before the resettlement. It does not matter who is right about the number. The government must make agreements with the coal companies to insure this happens. Difficulties are not a reason not to do the project, but rather a reason to be particularly careful and to work to overcome difficulties. The government must insure that resettlement is done according to its rules protecting the financial position of these affected. The NGOs efforts to drive out ADB will adversely effect the poor in the project area. The hypocrisy is breath taking. The coal projects will use up valuable farm land that should be kept in agriculture: This is true but the project will make an enormous contribution to the economy. Land is lost to agriculture continuously and if Bangladesh is ever to become a middle income country it has to maximise return to the land through industrial development. The future of Bangladesh does not rest with rice farming but through industrial development.Private foreign investors exploit Bangladesh, so should not be allowed: Many believe this and hence argue such investment should be banned. But others say: Environmental NGOs are bad and should be banned. This is the level of this argument! Noise not fact. Self righteous behaviour is best replaced with some humility and doubt. Of course foreign investors are trying to make money! The question is the word “exploit.” The earnings are large became the investments are large. Private foreign investment in the Bangladesh energy sector has been beneficial for both the nation and the investor. It has provided gas at less than $1 per thousand cubic feet and electricity at less than 3 ¢ US per kwh. For all the accusations and claims the Bangladesh government through good management and encouraging competition did very well using foreign investors in gas and electricity.ADB should not participate in coal projects: I do not know if the government will approve the Phulbari Coal Project. But if the government does Asia Energy faces no difficulty in financing the project from private sources or sovereign wealth funds. The government should welcome ADB participation to strengthen achievement of high standards for resettlement and environmental management.Anyone genuinely interested in the Bangladesh peoples’ welfare wants the power and influence of the ADB on the side of the people. Indeed the implementation of large coal projects in Dinajpur will accelerate the growth of this part of Bangladesh raising incomes, providing employment and attracting people from surrounding areas. Asia Energy does not need ADB for financing the Project; it is the Bangladesh government that can use ADB to strengthen its hand! Open debate about the pros and cons of energy projects and strategy is of great benefit to Bangladesh. But for NGOs to interfere in the relationship of ADB and the government seems questionable behaviour. This argument needs to be based on truth and analysis not misrepresentations and unsubstantiated claims.

The Independent

15.06.08

http://theindependent-bd.com/archive.details.php?nd=2008-06-15&nid=86328

Govt to adopt coal policy soon

BUSINESS REPORT

The government is expecting to finalise the long-awaited policy soon to extract the huge coal reserves to supplement fast depleting gas resources, a senior energy official said yesterday."To meet the energy demand we will have to use the coal resources," said M. Tamim, Chief Adviser's Special Assistant for Power, Energy and Mineral Resources."I ask all to leave it (issue of coal extraction) to the experts, have trust in them," he said, responding to critics who oppose any deal with foreign companies to run the coal fields."Everything will be done on the basis of accountability and transparency," Tamim told a seminar on "Energy security and Development."Bangladesh, with its 150 million population, faces a serious energy crisis, with lack of gas to produce electricity. The crisis is set to worsen by 2011 when its proven and recoverable gas reserves could run out.As a result, attention is increasingly turning to the country's vast coal resource."The draft of the coal policy is soon to be placed before a cabinet meeting for approval," Tamim said.The country now extract coal from just one of five fields with 2.55 billion tonnes, with technical assistance from a Chinese firm.Energy officials say Bangladesh should adopt the coal policy quickly, to allow foreign firms to work on two large coal fields in the country's north at an early date.The projects worth a total US$6 billion have been put forward by Indian conglomerate Tata Group and Asia Energy Corporation (Bangladesh), a sister firm of UK-based GCM Resources PLC.Both are pending as environment assessment and rights groups have continued to protest to force the government not to allow foreign investors in the coal sector.The government, however, says it would carefully consider all issues and concerns before handing them over to any investor and that the coal policy will have provisions to protect local interests.

Source : The New Nation

02/06/08

http://nation.ittefaq.com/issues/2008/06/02/news0263.htm

Use 2.5b tonne coal for energy security

Recommends UNDP-Bangladesh report
Sharier Khan
A UNDP-Bangladesh report recommends increasing the use of coal resources to avert a deep energy crisis that would affect economic growth in near future."The estimated resources of 2.5 billion tonnes of coal in Bangladesh are equivalent to 65 trillion cubic feet of gas which could assure energy security in the medium and long-term," says the report titled "Sustainable Energy Development in Bangladesh -- Coal as an alternative energy resource.""More extensive exploration in northwest Bangladesh could augment the coal resource base significantly," it adds, urging the government to approve both the draft coal policy and investment for exploration of coal through geophysical surveys and 3-D modelling.But the way forward with coal has to deal with both technical geological issues as well as resistance from the civil society, says the report prepared by Ajoy K Ghose and Chowdhury Quamruzzaman. The nation has to overcome its inaction and the "not-in-my-backyard" attitude regarding coal, it observes."With access to world best practices in environmental technology for reducing ecological footprint and supported by political will, the road blocks should not be insurmountable and coal could provide the much-needed energy security for the nation," says the report finalised last month."Where coal cannot be physically extracted, recovery of coal bed methane and underground coal gasification deserve to be considered as energy options," the report recommends.The report briefly reviews the five coal deposits of Jamalganj, Barapukuria, Phulbari, Dighipara and Khalaspir and observes that in all cases, there are some common issues -- high population density, rich agricultural land, pristine environment and a near-moribund economy.It notes that Bangladesh's population is set to grow to 180 million in 2025. The nation needs to sustain a 7.8 percent economic growth to eradicate poverty and meet the economic and human development goals. The energy challenge is thus fundamental. The nation has a per capita electricity consumption of about 167 kWh per year, probably one of the lowest in the world. The inventory of energy resources is not substantial and natural gas resources are fast depleting in absence of any new major discoveries in recent past. The report recommends an agenda for actions for the government including giving a "go ahead" of the Phulbari project that has a proven reserve of 572 million tonnes coal."The government has to initiate steps for speedy acquisition of land [for Phulbari], launch advertisement advocacy for assuaging the sentiments of project affected people so that the development and execution of the project could be facilitated. Phulbari is the crown jewel in coal inventory of Bangladesh and its development would help transform the economy of the nation," it says.On Barapukuria underground mine, it says, "Review and reconsideration of the mining strategy at Barapukuria coalmine where underground mining by multiple slice long wall from roof downward is destined to lead huge losses of coal reserves. The feasibility of changeover to open-cut mining also needs to be studied in depth."Barapukuria has a reserve of 390 million tonnes, but its underground mining method will recover only 10 percent coal in 30 years.The report suggests promoting development of coal deposits at Khalaspir and Dighipara, either in the private or joint sector. "Appraisal of coal bed methane resources at Jamalganj needs to be conducted on priority basis. If CBM resources are not promising, a pilot plant trial/ demonstration of underground coal gasification at Jamalganj needs to be undertaken," it adds.The report also suggests initiating a mining degree programme at Buet or Ruet to bridge the critical gap in manpower for coal development. Simultaneously, an industrial training institute should be set up to meet the need of supervisory manpower in coalmines.Jamalganj coal deposit was discovered in 1962 at a depth ranging between 640 metres to 1,158 metres with a proven reserve of 1,053 million tonnes. Only 10 wells have been drilled for this deep coal zone.Phulbari deposit discovered in 1997 has been thoroughly studied by Asia Energy through drilling 108 wells. It has 572 million tonnes coal at a depth of 150 metres to 240 metres.Discovered in 1985, Barapukuria deposit has proven 303 million tonnes and proven and probable 390 million tonnes coal at depth ranging between 118 metres and 509 metres. Thirty-one wells were drilled in this zone for understanding the deposit. The mine started commercial operation two years ago -- eight years behind schedule.Khalaspir zone was discovered in 1989, and its exploration licence was secretly awarded in 2003 by the past four-party alliance government to Moazzem Hossain of Hosaf Group who is now wanted in an anti-corruption case. In total, 14 wells were drilled and coal was found at a depth of 257 to 483 metres. The proven reserve is 143 million tonnes, while the proven-probable reserve is 685 million tonnes.Discovered in 1994, Dighipara zone has been awarded to Petrobangla for exploration. Only five wells were drilled and coal was found at a depth of 328-407 metres with a proven reserve of 150 million tonnes and a proven-probable reserve of 600 million tonnes.
Source: The Daily Star, Dhaka, 01 June 2008 http://thedailystar.net/story.php?nid=39177

Govt steps on Phulbari open-pit mine after finalisation of coal policy

Special assistant to the chief adviser, M Tamim, on Thursday said that the government would take ‘steps’ on Asia Energy’s proposal for an open pit coal mine project at Phulbari after finalisation of the coal policy. He said this in a meeting with Asia Energy chief executive officer, Gary Lye and executive director of Asia Energy Bangladesh Private Limited, Nazrul Islam. Gary Lye told New Age that they had a fruitful discussion with Tamim. ‘We look forward to seeing the coal policy finalised and we will continue to work with government of Bangladesh to help progress Bangladesh’s coal sector development and the Phulbari coal project.' When asked about the report of a technical committee that found Asia Energy’s agreement with the government illegal and Phulbari coal field not viable for open pit mining, Tamim said, ‘The government will look into the report, once the Asia Energy issue comes up after finalisation of the coal policy.’Tamim said that at present the government was not considering any company’s project. ‘The decision on any coal mine project will be based on the coal policy,’ he said. Sources in the government, however, told New Age that the interim government was unlikely to take any decision on Asia Energy’s proposal even if the coal policy was approved.

New Age
23/05/08
http://www.newagebd.com/