Draft coal policy for Mine Bangla: Proposal goes to cabinet today

Sharier Khan, The Daily Star, August 13, 2008. Dhaka, Bangladesh

The eighth draft coal policy that emphasises immediate government-led action in coal sector to meet the country’s surging energy demand is likely to be placed before the caretaker government’s cabinet today.

The draft proposes to set up a “mine Bangla” in line with Petrobangla by 2010 to spearhead different mining schemes. This government body will take strategic partners from private sector through open tenders for quick development of the schemes.

Other proposals include compulsory release of 20 percent shares of a mining venture to the local market as per the laws of the Securities Exchange Commission. When selling back, shareowners will be only able to sell those to the government at market price.

“Because of excessive revisions and inputs from a wide number of people, the draft policy now sounds more like a law than a policy,” says a source. “And this was exactly the observation of the law ministry about the policy when the energy ministry sent the draft to the law ministry a few months back.”

The draft policy tries to touch almost all aspects of coal development. “That is why the law ministry observed that instead of such a policy, the government should work on several laws instead of just one,” the source adds.

The coal policy was first drafted in December 2005. The seventh draft was prepared by a committee to review the draft policy. Headed by former VC of Buet Prof Abdul Matin Patwari, the 10-member committee submitted its report to the energy ministry in December last year.

The ministry itself has also modified some of the contents. Only recently, the ministry has forwarded the draft to the Cabinet Division for approval by the cabinet.

Under this policy, private companies will not have sole ownership over any coal mining deal and must come as partners with a national coalmining company.

The draft restricts export of coal to be used as fuel, allowing exports of higher grade coking coal. 

It lays out a detailed plan on how the government should handle rehabilitation and resettlement of communities that will be displaced by a mining project. The Patwari committee had suggested that the land acquired by a project be returned to the original owner upon completion of the project.

The land and the law ministries however deleted this part as it conflicts with the laws of the land. “Once the government acquires a piece of land, it can’t be returned to the original owner. The government can however restore the land and allow its agricultural use,” says a source.

The policy does not restrict open pit mining, as was initially demanded by some pressure groups. Instead, it identifies mining method as a technical issue, which should be decided on the basis of individual cases and technical viability.

The policy prioritises private partnership that puts highest emphasis on coal-fired power projects.

A 29-member committee led by the energy ministry will review coal sector master plan, royalty, the sector’s development issues from time to time and give decisions.

By 2010, the government must frame a coal sector master plan, identify coal zones, review coal industry infrastructures and initiate restructuring measures. 

It will also restructure the Bureau of Minerals Development and Geological Survey of Bangladesh and chalk measures to protect the environment and develop the legal frameworks for it.

The government will also have to chalk out a security measure for mines and a plan to reclaim land.

The draft recommends that the government decide on implementing an open pit mine as a “test case” in the northern part of the Barapukuria underground mine. If such a venture is “commercially successful”, the government will review all technical aspects and take follow-up measures.

“There has been no study by any group about such an open pit mine in Barapukuria. How can this committee suggest this? Besides, who would invest for a test case if there is no guarantee of any profit?” asks another source. 

“Again, technically you also need bigger land for an open pit mine. The Barapukuria mine area has a power plant and other structures. Then is this a feasible idea or just an undue idea?” the source quips.

The draft policy says till 2025 if Bangladesh’s GDP remains as low as 5.5 percent, the country will need to add 19,000 megawatt additional power. On the other hand, if the GDP is as high as 8 percent, additional 41,000 MW power will be needed. 

But at the same time, Petrobangla says production of gas, which has been the key source for power generation, will start to decline from 2011. This is where the country’s coal should play a role.

It adds that to meet its power demands in a GDP growth rate scenario of 5.5 percent, Bangladesh will need 136 million tonnes of coal till 2025. If the GDP rate is 8 percent, then Bangladesh will need 450 million tonnes coal.

The draft says the country’s existing four discovered coal fields of Barapukuria, Phulbari, Khalashpir and Dighipara can cater this need till 2030 or so.

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