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$15b investment from unnamed mining co guaranteed

The interim government in Bangladesh is weighing the option of open-pit coal mining, reviving a controversy settled almost two decades ago with the sacrifice of three lives in a rare protest in Phulbari of Dinajpur. 

The protest prompted the then government, led by Bangladesh Nationalist Party, to sign an agreement with the protesters, led by the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port.

Scrapping the mining project and cancelling the work permit of Asia Energy, the UK-based company involved in the open-pit mining project, were two of the six points on which the agreement was reached in August 2006. 

Asia Energy was later renamed—Global Coal Management Resources. 

The Hydrocarbon Unit of the power and energy ministry on February 27 hosted a discussion attended by energy experts, geologists and consumer rights activists with a presentation that categorically promoted open-pit coal mining, particularly in Phulbari.

‘Open-pit mining is not possible in Bangladesh due to its high population density and land scarcity,’ said energy expert Badrul Imam who teaches geology at Dhaka University.

An area double the size of the mine must be there to dump dug-out earth, he explained, adding that the withdrawal of groundwater to facilitate mining will also create water crisis in the area.

The proposition made by the government in the presentation of the Hydrocarbon Unit about restoring land in the mine area with its fertility is also considered far-fetched and impossible by energy experts.

At least 15 villages near the Barapukuria coal mine, Bangladesh’s only active coal mine, where underground mining is in progress, lost their access to water.

The interim government is in favour of open-pit mining in Barapukuria as well.

In February 2012, concerned by a move by the past Awami League government in favour of open-pit coal mining at Phulbari, a group of experts from the United Nations noted that the move would displace an estimated 50,000–1,30,000 people and affect 2,20,000 others by drying up wells.

Awami League was in the opposition during the 2006 unrest and proactively supported the protesters, promising not to allow open-pit coal mining ever in Bangladesh. 

The project would destroy some 12,000 hectares of productive agricultural land, waterways supporting 1,000 fisheries, and nearly 50,000 fruit trees, as the mine is located in Bangladesh’s most fertile agricultural land, the UN experts had noted.

The International Accountability Project earlier estimated that 800 million litres of groundwater would need to be lifted to maintain dry condition in the mine, which has deposits at the depth between 150 and 260 metres.

The International Accountability Project also cited the departure of the Australia-based mining giant BHP Billiton from the mine after concluding that the depth of the coal deposits would make mining activity so destructive that it would not be feasible to comply with Australia’s environmental standards or those of any country worldwide.

‘One thing we must remember is that the interim government does not have the authority to decide on an issue like open-pit extraction,’ said Kazi Matin Uddin Ahmed, who teaches geology at Dhaka University and attended the meeting.

The interim government, which replaced the autocratic rule of Sheikh Hasina, is in power to help organise the national election and lacks any mandate to consider doing something regarding the management of natural resources, energy experts observe.

‘The presentation could easily replace the one that the Asia Energy had presented decades ago,’ said professor M Shamsul Alam, energy adviser, Consumers Association of Bangladesh.

‘The government is favouring open-pit coal mining, saying that it intends to start the discussion, making things easier for the next government,’ said Shamsul Alam, who also attended the government discussion.

The Hydrocarbon Unit completed the presentation, made by its director Arup Kumar Biswas, in 17 slides concluding that open-pit coal mining is the only feasible way for coal extraction in Phulbari.

Starting with the recent rise in global coal consumption, particularly in Asia, the presentation argued that coal would remain a major energy source through 2040.

The presentation gave a wrong estimate of the country’s current coal-based installed power generation capacity, inflating the actual capacity by over 2,500MW, while saying that open-pit mining would meet an estimated annual demand of up to 30 million tonnes, saving $4 billion.

Stating that the country’s minable coal deposit is 834 million tonnes, the presentation listed the benefits of open-pit coal mining through comparisons with underground mining and boasted technological advances.

According to the presentation, open-pit mining lowers health risks, reduces mining time while ensuring maximum output, and results in the extraction of co-products.

The Hydrocarbon Unit assured in the presentation of partially refuelling the aquifer, restoring 5,192 hectares of land, half of it agricultural land, to its previous fertile condition and giving farmers their livelihood back within three to five years after the end of mining.

The presentation was also flooded with many economic benefits of open-pit mining in Phulbari, such as the extraction of coal worth $83 billion over 30 years, an income of $16 billion in royalty and taxes, and an extra income of $17 billion from co-products.

The presentation also guaranteed in the presentation a $15 billion investment in working capital and operation from the mining company. The Hydrocarbon Unit, however, did not say who the investor could be.

Power and energy adviser Muhammad Fouzul Kabir Khan could not be reached for comments over phone. Energy secretary Mohammad Saiful Islam did not answer his phone either.

A search online revealed that the GCM Resources was actively pursuing the Phulbari open-pit coal mine project.

The Global Energy Monitor Wiki, an online database of energy projects around the world, shows that Phulbari mine is still a property of the GCM Resources. It has also listed significant developments until 2022 regarding the GCM’s striking a deal with others, mainly from China, to develop the Phulbari coal mine.