Friday, March 13, 2009

Barapukuria Coal Mine: Committee for acquiring 3.5 sq km area

Staff Correspondent, NewAge, March 13, 2009

The committee, formed to assess compensation for the affected people at Barapukuria coal field in Dinajpur, is likely to recommend acquiring around 3-3.5 square kilometres of area for coal mining by resettling people so that land subsidence does not affect them.

An inter-ministerial meeting, headed by the prime minister’s adviser, Tawfiq-e-Elahi Chowdhury, on March 3 directed the seven-member committee to prepare a complete package programme for compensating people affected by land subsidence at the coal mine area and for future course of action including acquiring of land.
 The meeting also asked the committee to review the land acquiring procedures for Jamuna Bridge and proposed Padma bridge.

‘There is no other option for the government but to acquire 3-3.5 square kilometre area as land subsidence at Barapukuria coal mine area will continue if the government continues underground mining. Besides, the land acquiring will also be required if the government goes for open pit mining in future,’ said a source in the seven member-committee.

Affected people at Barapukuria have become agitated in recent times as huge land subsidence took place at 300 acres of land and subsequently many houses developed cracks in five villages.

‘It is obvious that there will be more land subsidence because of the underground mining. If people continue to live in the mining areas they might be at great risk because of subsidence and there might be protest,’ said the source.

He said that the people in the areas needed to be resettled with the payment of an international standard compensation to them.

The committee, headed by a joint-secretary of the energy division, however, is finding it difficult to assess the compensation for the affected and resettle them as huge field works were needed to do it. The committee was asked to submit its report in 10days.

‘All the committee members are government officials and they have their works at their respective organisations. It will entail an enormous work to determine the compensation for the people of the five villages. Moreover, people should be interviewed to know what they want,’ said a committee source.

The committee is likely to recommend a guideline for the government to appoint experts or surveyors to determine what the people in the area want.

‘Before assessing the compensation package, finding the actual number of people living in the area, and determination of the amount of arable and residential land, the number of houses, trees and the cost of crops are crucial. Besides, peoples’ views should be taken on where they want to go and what they want to do after relocation,’ said the source.

The committee members, however, could not confirm when they would submit the report to the government.

The Barapukuria coal field has a reserve of around 389 million tonnes and the authorities will extract 10-20 per cent coal from the underground mine in 30 years. The government, however, may go for the controversial open-pit mining method at the field.

Tuesday, March 10, 2009

Govt report which terms Phulbari deal illegal goes missing

Staff Correspondent, NewAge, March 10, 2009

The energy division has ‘lost’ the report of a government-formed expert committee which found that the Asia Energy’s agreement with the government for Phulbari coal field was illegal and an open pit mine at the field would not be viable, sources in the division said.

The division found the report missing from the file on Phulbari coal field a few days back when the Prime Minister’s Office asked the division to send a position paper on the Phulbari coal project and Asia Energy.

Sources in the division suspected that the report might have been intentionally taken away by some quarters loyal to the Asia Energy as the company would never get any chance to take the Phulbari coal field if the government implemented the recommendations of the committee.

The convenor of the 12-member committee, Professor Nurul Islam of BUET submitted the report to the then energy secretary, AMM Nasir Uddin on September 24, 2006, after scrutinising the Asia Energy’s development plan for operating an open pit mine at Phulbari coal field.

After the division found the report missing, Professor Islam provided the division with a copy of the report as per the request of the division, said energy officials.
 When contacted the energy secretary, Mohammad Mohsin told New Age on Monday that they had found the ‘original’ report of the committee missing from the file when they were preparing the position paper for the prime minister.

The then secretary Nasir Uddin received the report and the report was sent to the relevant desk. We suspect the report has been missing from the desk,’ he said.

‘Although the original copy was missing, there is a photocopy of the report. But the photocopy is very hazy. But luckily Professor Islam had a copy of the report,’ he said.

When Mohsin was asked if anyone had intentionally removed the report, he said, ‘It might have happened. We have warned the concerned desk to handle such files carefully.’

Professor Islam, however, expressed his disappointment over the issue. ‘We have prepared the report after going through thousands of pages of the development plant submitted by the Asia Energy. But for the last two years no action has been taken to implement the recommendations. Now we hear the report is missing. It is disappointing,’ he told New Age on Monday.
 He observed that the removal of the report might be part of a ploy to hide irregularities that had taken place in the contract with the Asia Energy and to award the Phulbari coal field to Asia Energy for operating open pit mine.

As per the committee report, Asia energy’s Phulbari coal field development scheme should not be approved on any count — legal, technological, financial, environmental and institutional.

The committee said the proposed open-pit mine of the company would bring environmental disaster in the area while the development scheme of the company proposed mining in an area of 6,500 hectares although as per the rules it should have proposed mining in an area of about 400 hectares.

The report said that Phulbari the agreement, which was originally signed with BHP in 1994 for three years, was handed over to the Asia Energy in 1998 in violation of the mining rules as the exploration licence with the BHP expired in 1997.

The company did not submit the guarantee money of about Tk 2,000 crore with the development scheme that the company submitted to the government in 2005 although as per the rules it was supposed to deposit three per cent of the development cost.

The UK-based company carried out a two-year feasibility study before submitting the development scheme in the middle of 2005 proposing open-pit mining in the field.

Three people were killed in Phulbari on August 26, 2006 when law enforcers opened fire on demonstrators protesting against the planned open-pit mining by Asia Energy and demanding ouster of the company from Bangladesh.

Friday, March 6, 2009

Barapukuria coal mine in trouble: 800 miners lose job, production stopped since Feb 18, villagers press for compensation

Kongkon Karmakar, Dinajpur and Sharier Khan in Dhaka, The Daily Star, March 6, 2009

Just when Barapukuria Coal Mine Company Ltd (BCMCL) was dreaming about making profit for the first time, its coal production became uncertain due to resistance against mining by villagers and retrenchment of at least 800 miners yesterday.

While villagers stopped the company from mining coal from a new area since February 18 demanding compensation for loss of arable land, the mine's Chinese operator CMC-XMC yesterday served notice to retrench 800 miners. The CMC-XMC paid the miners and told them not to attend work from today.

This prompted miners to protest and bring out a procession inside the mine against the CMC-XMC decision. Later, the BCMCL authorities quelled the agitating miners and requested CMC-XMC to extend their deadline for resuming coal mining to Sunday. Sources said CMC-XMC agreed with BCMCL.

The CMC-XMC had given a deadline that expired yesterday to BCMCL to resume coal extraction.

While the company incurred a loss of Tk 156 crore between 2005 and 2008 due to poor coal production and excessive production cost, its performance drastically changed from June-July last.

With an increased coal production, the BCMCL sold around 1.5 lakh tonnes of coal to private buyers--mostly brick kilns--at $110 per tonne. This sale alone fetched around $16 million till February giving the company the hope of making profit. The remaining coal, more than four lakh tonnes, is being sold at $70 per tonne to the Power Development Board (PDB) to run its 250 megawatt power plant at the mine site.

Now, as the mine could not continue coal production as per schedule, its Chinese operator is threatening to leave Bangladesh. The mine's inventory now has about one lakh tonnes of coal to cater the needs of PDB's power plant. This is not enough for the BCMCL to sell coal to the brick kilns and make enough money to pay damages to villagers.

Production in this first underground coalmine in Bangladesh is done in different parts and in different "Faces", each of which allows extraction of a few lakh tonnes of coal.

On February 18, the BCMCL finished coal extraction from Face-1104. It was preparing to begin coal production from Face-1114 from February 25.

Face-1114 is close to village Jhigadari.

As many parts of Kalupara and Moupukur villages have already subsided due to the mining, the villagers of Jhigadari resisted drilling of a borehole there for mining purpose. They said each time a borehole is drilled, the land around it subsided. This should not go on, they added.

The villagers want the BCMCL to pay damages to villagers of Kalupara and Moupukur first. If the payment is satisfactory, then they would allow mining under Jhigadari.

This situation developed after three minister-level leaders visited Barapukuria to discuss with locals how they want the compensation. They went there following reports of large-scale land subsidence. A committee was formed with representation from villages to determine the amount of damages.

The BCMCL, meanwhile, told villagers that since policymakers have already assured them of damages, it would be provided and the villagers should give the government a few months' time. They said the locals should not resist mining work.

"We told the villagers that if mining is resisted, the mine's Chinese operators will leave. The workers will be retrenched and it will cause unrest. The mine's structure will be damaged. The PDB will no longer be able to generate power. And eventually, the villagers will suffer tremendously during the irrigation period. The BCMCL's financial health will also suffer and may not be able to pay the compensations," said an official.

"But the villagers are sentimental and do not want to listen to anything," he added.

General Manager (mining) of BCMCL Md Mir Abdul Motin told The Daily Star that they formed a technical committee to resume coal production from Face-1114 without sealing off existing boreholes. They were optimistic about starting coal extraction from Sunday.

Sources said the BCMCL paid Tk 24.22 lakh as food-grain damages to owners of 60.76 acres of land that subsided since 2006.

BCMCL sources said a high-level meeting was held in Dhaka Tuesday. This meeting recommended paying villagers the damages and convincing them to cooperate with coal production. This decision has to be implemented quickly or it would become difficult to motivate locals to cooperate.

Besides, the payment of damages required huge capital.

The authorities are yet to make any assessment for damages but sources in the Barapukuria coalmine said whatever the damages are, at present the mine does not have enough money to pay the villagers without help from the government.

Source said Tuesday's meeting was headed by Adviser to the Prime Minister for Power, Energy and Mineral Resources Towfiq-e-Elahi Chowdhury. State Minister for Power and Energy Shamsul Haque, State Minister for Forest and Environment Mostafizur Rahman, Energy Secretary Mohammed Mohsin and senior officials of Barapukuria project were also present in the meeting to review the present crisis of BCMCL.

At the meeting, Towfiq-e-Elahi and Shamsul Haque directed the committee, which is preparing a list of the affected villagers, to submit its report immediately, sources said.

Mostafizur Rahman is scheduled to visit the coalmine site Saturday to talk with agitating villagers.

Thursday, March 5, 2009

Petrobangla's U-turn to get tied Polish loan for Dighipara coal

Sharier Khan, The Daily Star, March 5, 2009

In a self-contradictory move, Petrobangla has asked the government to obtain a Polish-tied aid credit to assign Polish company Kopex for a techno-economic feasibility study for development of coal deposit in Dighipara.

In a letter to the ministry on February 24, Petrobangla sought clearance for this credit deal saying if it is cleared, the exploration activities in 40-square-kilometre Dighipara coal deposit can be launched within 2009.

But on January 21 last year, on the basis of Petrobangla's opinion the government informed the Polish government that it could not accept the tied aid credit because as a licence holder of the Dighipara coal deposit, Petrobangla was set to find a strategic partner for exploration and later development of the deposit.

Petrobangla in 2005 estimated that such a study would require 18 months to complete at a cost of Tk 26.8 crore.

But it was Kopex that proposed this feasibility study. Serving as a consultant of the struggling and very poorly implemented Maddhyapara hard rock mine project, Kopex proposed to Petrobangla on May 17, 2007 that it was interested for this feasibility study.

As a follow-up, the government wrote to the Polish government and received a proposal of a tied aid credit on October 11, 2007.

Back then, Petrobangla was seeking the ministry's clearance of an Invitation for Expression of Interest (EOI) to find a strategic partner. It viewed the Kopex proposal as an independent move and it rejected the idea.

Till now Petrobangla has not published the Invitation for Expression of Interest to find its strategic partner because the ministry said it should be done after the government approved the draft coal policy.

The four-year-old draft is gathering dust due to political indecisions. However, other file work has meanwhile been completed.

On December 21 last year, the Bureau of Minerals Development (BMD) approved the Dighipara coal zone licence for Petrobangla and as per the licence, Petrobangla paid the government the annual fee for 2008 upon marking the licensed area.

Now instead of finding a strategic partner through an open tender, Petrobangla says, "It is the right time to conduct the Techno-Economic Feasibility Study." Petrobangla does not have the efficient manpower, technical manpower and financial strength for this study, it said in its February 24 letter.

The letter added the non-approval of the coal policy did not appear to hinder such a study as it would be carried out as per the terms and conditions of the BMD licence.

Petrobangla adds that the Polish government was still open for the tied aid credit and praised Poland as one of the top 10 countries of the world in coal production that had 400 years of experience.

In the early nineties, tied aid credits like supplier's credits in Maddhyapara and Barapukuria gave scopes of corruption. Both the Maddhyapara hard rock and Barapukuria coal mines have suffered many years of implementation delay and poor project designs.

Both of the companies failed to achieve the actual goal, inflicting heavy losses on the government. But at the same time, the local agents of the companies and the companies that developed these mines made profits.

The strategic partner is supposed to provide finances and technical expertise in exploring and later developing the coal deposit with Petrobangla.

The Geological Survey of Bangladesh (GSB) discovered high quality bituminous coal in Dighipara in Nababganj upazila of Dinajpur during its 1995-2004 exploration.

Through drilling only five boreholes in 1.25 sq km areas, GSB found coal in five layers having a thickness of 62 metres at depths ranging 323 metres to 408 metres.

It is primarily estimated to have a deposit of 100 million tonnes.

However, the deposit has the prospect of being spread in a five square-kilometre areas having 500 million tonnes of coal.

To confirm this prospect, Petrobangla would have to undertake detailed work programmes.

Petrobangla was given the licence when a number of international companies were seeking the same for Dighipara exploration and development.

Bangladesh will need 13 million tonnes of coal every year for the next 10 years to generate additional power to meet its rising demand, as the natural gas supplies to generate power will not be able to cater this need.