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Bangladesh’s own coal, extracted from its lone coal mine in Dinajpur, is costlier than the imported one, up to 77 per cent in some cases, due to arbitrary energy pricing by the past Awami League regime, which was ousted amid a mass uprising in July-August in the past year.

The current price of the locally extracted coal, $176 a tonne, excluding value-added tax and the taxes, was set on January 5, 2023 with retrospective effect from exactly a year ago.

The coal is used for power generation by the government. Power price increased more than a dozen times during 15 years of the AL regime due largely to increased fuel costs.

People were struggling hard to cope with soaring living costs when the coal price was raised by more than 35 per cent compared with the previous price of $130 which had been in force since 2015, citing the fuel’s production cost increase and the need for investing in exploratory activities and land acquisition purposes.

Though the coal price exceeded $400 a tonne in early 2022 on the international market, it has been about a year the price dropped to about $150 a tonne.

The current price of a tonne of the best quality coal bought from Indonesia is $127.72. Bangladesh imports most of its coal for power production from Indonesia. The coal Bangladesh usually imports is currently in the price range of $72.24 to $92.87, excluding transport and handling costs.

‘The predatory local coal price is the upshot of monopolistic energy administration,’ said professor M Shamsul Alam, energy adviser at the Consumers Association of Bangladesh.

The coal price increase was proposed by state-owned Barapukuria Coal Mining Company Limited. The proposal was invariably found correct in a verification done by another state-owned company Bangladesh Power Development Board, the buyer of local coal. Finally, the proposal was approved with slight changes by an executive order by the Ministry of Power, Energy and Mineral Resources.

While ordinary people continued to bleed financially, the coal price hike immediately increased the profits of the BCMCL, winning its employees hefty annual bonus and the government increased income.

‘There was no real verification of the proposal. There is no way of knowing if the price hike was actually needed,’ said Shamsul.

The BCMCL had initially sought a 62 per cent rise in the coal price, setting the price at $210 a tonne.

With the costs of production estimated at $138 a  tonne, the BCMCL incorporated in the proposed price almost $50 as the costs of future land acquisition and exploration. The proposed price also included 15 per cent profits after paying VAT and the other taxes. The approved price considered all the expenses.

Bangladesh Energy Regulatory Commission officials observed that land acquisition and exploration expenses should have covered by the company’s profits.

It was typical of the past AL government to frequently raise energy prices, necessitated by a flawed energy policy that energy experts found excessively beneficial to the private investors, all of them being AL favourites. Soon after assuming power, the AL had enacted an indemnity law to award power and energy projects without tender and being challenged in court.

The interim government led by Muhammad Yunus scrapped the law after taking office on August 8, 2024.

The power sector had undergone an aggressive expansion throughout the AL regime between 2009 and 2024, leading to a massive overcapacity problem. The BPDB’s comprehensive losses stood at Tk 8,764 crore at the end of the past financial year.

The BPDB buys the entire production at the coal mine to generate electricity at the Barapukuria thermal power plant, which is often partially used due to lack of fuel supply.

Shaiful Islam Sarkar, managing director of the BCMCL, justified the price hike with the need to increase profits to pay taxes and dividend to the government and incentivise the BCMCL officials and workers, who are risking their lives by choosing to work in a coal mine.

‘Our coal, with the calorific value of 6,137 kcal/kg and 0.53 per cent sulphur content, is still undervalued. We can easily sell it for $230 a tonne should export be allowed,’ he said.

Shaiful justified the price increase with its increased expense in a number of sectors — repair and maintenance, spare parts import and employing a foreign workforce of 300 people, including 40 officers.

The BCMCL has a workforce of 250 people, who mostly do not work inside the mine. The 1,100 mine workers are on the CMC’s payroll. The main work of the coal mine, from designing the coal extraction plan to supervising workers, are done by Chinese workers under contract with the China National Machinery Import and Export Company.

After the coal field was discovered in 1985, the BCMCL extended its contract with the CMC to develop the mine and then extract coal through 2027.

The BCMCL started extracting coal in 2005, lifting 13.02 million tonnes by June 2022. Of the extracted coal, 9.54 million tonnes were used in the 525MW coal power plant while 3.35 million tonnes were supplied to the local industry.

Coal sales to local buyers have remained suspended since 2018 after the discovery that over 1.43 lakh tonnes of coal went missing between 2006 and 2018.

The BCMCL had profited over Tk 144 crore in 2021-22. In the year, when the price hike benefit was partially enjoyed, the BCMCL workers’ profit participation fund received over Tk 7.6 crore. In VAT and taxes, over Tk 233 crore was paid in the same year.

In the following financial year of 2022-23, enjoying full price hike benefits, the payment to the government exchequer in the VAT and other taxes rose to over Tk 422 crore. The profits of BCMCL more than doubled to Tk 300 crore compared with those in the previous year, while the contribution to the WPPF almost tripled to over Tk 22.21 crore.

At the end of the past financial year, the BCMCL profits soared to Tk 418 crore with the WPPF contribution rising to Tk 29 crore. The payment to the government exchequer rose to nearly Tk 709 crore.

‘People always feel proud about a profitable public company,’ said BCMCL managing director Md Shaiful Islam Sarkar.

BCMCL officials said that over 62 per cent of the production costs was gone to pay the CMC. The BCMCL was supposed to develop mining capacity working with the CMC, eventually overtaking the full responsibility of the operation of the mine. But that has not happened in 20 years since the extraction of coal began.

‘Coal mining is not rocket science. Neighbouring India operates its own coal mines,’ said energy expert Badrul Imam, who is an honorary professor of geology at the Dhaka University.

‘Operating the coal mine on our own could have reduced the coal price,’ said Badrul, also a director on the board of directors of the BCMCL.