Global Coal Management Plc (formerly Asia Energy PLC)



Overview

GCM Resources plc (GCM) is a London-based resource exploration and development company. Its principal asset is its undeveloped coal deposit in the Phulbari region of Bangladesh, the development of which is awaiting approval from the Government of Bangladesh. It also has investments in other companies with mining interests. The company's shares are quoted on the Alternative Investment Market (AIM). (Ticker code: GCM).

The Phulbari Coal Project is a substantial, world class coal resource that will support a long life, low cost mining operation. It is the only such deposit in Bangladesh that has been subjected to a full Feasibility Study and Environmental and Social Impact Assessment prepared to international standards. In partnership with the Bangladesh Government, civil society and the community, GCM is committed to developing the Phulbari Coal Project to the highest social and environmental standards. By doing this, GCM seeks to maximise the benefits of the Project for both the Company’s shareholders and the people of Bangladesh.

The Company (GCM) under its former name, Asia Energy PLC, was incorporated in England and Wales as a public limited company on 26 September 2003. Asia Energy PLC was admitted to the Alternative Investment Market (AIM) of the London Stock Exchange on 19 April 2004. Through seed capital raising and the subsequent placement of shares, some £14 million was raised.

In November 2005, following submission to the Government of Bangladesh of the Phulbari Coal Project's Feasibility Study and Scheme of Development, the Company placed an additional 7 million shares and raised a further £33 million.

GCM actively reviews investment opportunities in order to broaden its global investment portfolio.

Coal Project facts

■ Energy security and diversity – The Project has a unique role to play in addressing the country’s electricity shortfall as its development will provide the basis for a step change in the country’s electricity generating capacity.
■Regional development – The Project will provide 17,000 jobs (direct and indirect). In addition the development of new industries using the industrial mineral co-products from the mine will create thousands of more jobs. The living conditions of all affected people will be improved and their livelihoods will be restored and in many cases improved. As a result of year round irrigation, improved water quality, improved inputs and improved farming practices it will be possible to produce three crops per year with higher yields than at present.
■Huge economic impact – Phulbari will contribute 1% to Bangladesh’s GDP each year and pay US$7.0 billion in taxes, royalties and service charges to the Government over the life of the Project. The replacement of high sulphur imported coals and other hydrocarbons will have a positive effect on balance of payments and air quality.

In partnership with the Bangladesh Government, civil society and the community, GCM is committed to developing the Phulbari Coal Project to the highest national and international social and environmental standards. By doing this, GCM seeks to maximise the benefits of the Project for both the company’s shareholders and the people of Bangladesh.

Background

Bangladesh is one of the most densely populated countries in the world with some 162 million people living in an area two thirds the size of the United Kingdom or about the size of New York State. Less than one third of its population live in cities while the majority live in rural areas relying on a predominantly subsistence lifestyle. GDP per capita is around US$1,700 (ppp) per annum compared with a world average of US$10,500. Less than half the population have access to electricity. Bangladesh is a country of enormous potential. It has the eighth largest work force in the world and is included in the “Next Eleven” countries that, after the BRICs (Brazil, Russia, India, and China), were identified by Goldman Sachs as having the potential to become the world’s largest economies in the 21st century. It has enjoyed more than 6% economic growth in real terms over the last five years as well as substantial improvements in measures of human development. For example, between 1980 and 2006 life expectancy has improved from 48 years to 63 years and literacy rates have improved from 29% to 53%.

Bangladesh is one of the most climate vulnerable countries in the world with a significant proportion of the population living in remote or ecologically fragile areas such as river islands or cyclone prone coastal areas. Two thirds of the country is less than five metres above sea level making it vulnerable to the predicted effects of climate change.

Although Bangladesh is vulnerable to the effects of climate change, it is not itself a significant emitter of carbon dioxide. Per capita carbon dioxide emissions (0.3t/capita) are substantially below other countries in the region (Pakistan 0.9t/capita, India 1.4t/capita, China 4.9t/capita) which themselves are substantially less than emissions from developed countries (UK 8.9t/capita, USA 18.9t/capita). Even with the addition of the 4,000MW of electricity capacity which Phulbari coal could support, Bangladesh would still be one of the lowest emitters of carbon dioxide in the world, substantially less per capita than its neighbouring countries.


http://www.gcmplc.com/

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Friday, May 18, 2007




R E G I O N: US senators urge early polls in Bangladesh


DHAKA: Fifteen US senators including Democratic presidential candidate Hillary Clinton have urged Bangladeshs army-backed interim government to end emergency rule and hold elections.

In a letter to Fakhruddin Ahmed, head of the interim authority, they called for an announcement within the next two months of a roadmap towards free and fair elections to be held as soon as possible. Bangladesh has been under a state of emergency since January 11, imposed in the wake of deadly violence between supporters of former prime ministers Begum Khaleda Zia and Sheikh Hasina.

An election planned for Jan 22 was cancelled and all political activity banned. We are troubled that the indoor ban on political activity was not lifted, as planned, on May 8, the senators said. Moreover, we are concerned by the lack of progress towards free and fair elections in Bangladesh. Fakhruddin has said he hopes to hold an election before the end of 2008, while the Election Commission said it would not be rushed by what other nations were saying.

Khaledas Bangladesh Nationalist party (BNP) and Hasinas Awami league are also demanding an early election and the immediate lifting of the ban on indoor political activity. The US senators lauded the efforts of the government to address corruption, saying that it was critically important that any anti-corruption campaign be implemented in conjunction with Bangladeshi law and international standards.

Security forces have detained more than 160 key political figures including Khaledas elder son and political heir apparent, Tareque Rahman, in an anti-corruption drive. Hasina is facing charges of extortion and murders linked to political violence in Dhaka last October, weeks after Khaleda ended her five-year term as prime minister.

Country is suffocating: Hasina told party leaders at her home on Thursday that freedoms were being stifled. No one has any political right today. People cannot speak their minds. The country is passing through a spell of suffocation, private news agency bdnews24.com quoted Hasina as saying. The government denies the country has been turned into a police state and says politicians are free to talk.

Khaleda cancelled a planned trip to Singapore on Wednesday, for a second time in three days, after charges were filed against Arafat. The case against Arafat was aimed to prevent Khaleda from going abroad, because they (the government) feel she could exert more pressure on the government from outside, a close Khaleda associate said.

Apparently the government has taken a lesson from Hasina, the associate said on Thursday, referring to wide media and diplomatic exposure the Awami League chief received while in London recently. Hasina was stranded there on her way back from a holiday in the United States after the government banned her from returning. Hasina came back on May 7 after authorities lifted the brief ban following intense local and international pressure. reuters

ADB And The Case Of
Phulbari Coal Project

By Anu Muhammad

19 May, 2007

ADB push for Phulbari Project

At a press conference on March 27, the Asian Development Bank (ADB) country director in Bangladesh, Hua Du, expressed the ADB's eagerness for the quick decisions in favour of big Indian corporate giant Tata's proposals related with gas and coal, and the British based company Asia Energy's (AEC) Phulbari Coal Project (PCP). Both are for open pit mining. 'Business is business', she said categorically (Holiday, April 1, 2007).

It is important to note that about 70,000 people were gathered in Phulbari on 26 August 2006 to protest against the proposed open pit mining project. Law enforcers opened fire on them as they were returning home from the protest rally. Three persons were killed and hundreds wounded. Twenty of the wounded people were rendered permanent suffering, one is still in hospital with permanent disability. The action of the law enforcers, however, could not kill off the protest. More people took to the streets in a mass uprising. After days of relentless protest, participated by Bangalee, Adivasi (indigenous), women, men, senior and children, the government relented and entered into an agreement with the protestors represented by National Committee to Protect Oil, Gas Mineral resources, Port and Power.

That historic social contract clearly stated, among others,

1. 'Phulbari coal project will be scrapped and Asia energy will leave the country.'

2. 'No open pit mining will be allowed anywhere in the country'.

3. 'Steps will be taken for development and utilization of coal only after proper consultation with the people keeping national interest intact'.


Meanwhile, a committee of experts, formed by the government, submitted its report in which it observed that the Phulbari project should be cancelled in environmental, economic and legal grounds. However, as Hua Du's statement suggests, nothing can change the bank's mindset.


Why is the bank so enthusiastic to back Asia Energy on the one hand and remain indifferent to experts' opinion about, and the local peoples clear NO to, the project on the other? Why is profit for a company preferable to agencies like ADB even if it costs peoples lives, livelihood and environmental disaster although their written commitments say otherwise?

Bangladesh: Speedy Move to Finalize Energy Policy by Next Month [ Print ]
Gas sector
EB Report , published 18/5/2007

Page [ 1 ]

The draft energy policy will be placed before the advisory council meeting soon for seeking approval. The policy include with the coal guidelines. Under the technical assistance from UN agency United Nation Development Program the proposed draft has formulates.



"We will submit the draft energy policy before the advisory council within two or three weeks," said energy and power adviser Tapan Chodhury at the Meet the Press program organized by the Forum of Energy Reporters, Bangladesh (FERB), in the city on Friday.



Underlining the diversification of energy resources, the adviser said to enact the coal policy is crying need to ensure the countrys energy security in the coming years as the proven gas reserve is expected to deplete by 2012, which might endanger the energy security.

Power situation to improve by Sept 08
By Staff Reporter
Fri, 18 May 2007, 13:25:00

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Presenting a bleak picture of the country's power situation, Energy and Power Adviser Tapan Chowdhury yesterday said it would not be possible to generate any new electricity before September 2008.

The Adviser also said the country's power plants use huge quantity of gas to generate electricity.

"If the generation of electricity continues using gas, the existing gas reserves will be depleted by 2011," he also cautioned.

In such a situation, he said that the country's future option for alternative energy source would only be coal.

"If we don't have a new discovery of natural gas, then coal will be the only option," he told reporters at a Meet the Press programme.

Posted: Tue, May 22 2007. 12:10 PM IST
Money Matters

Coal is worlds fastest growing source of energy: ReportCoals share of total world energy may climb to 28% in 2030, from 26% in 2004

Coal is the worlds fastest-growing energy source as rising oil prices prompt users to switch fuels, the U.S. Energy Information Administration said.
Coals share of total world energy may climb to 28% in 2030, from 26% in 2004, the agency, part of the U.S. Energy Department, said in a report published yesterday. Consumption is growing an average of 2.2% a year. The fuel will overtake oil to become the largest source of carbon dioxide emissions by 2010, the report said.
With oil and natural gas prices expected to continue rising, coal is an attractive fuel for nations with access to ample coal resources, especially in coal-rich countries like China, India, and the United States, the report said. These three countries combined account for 86 percent of the increment in world coal demand by 2030.
Crude oil for June delivery traded at $66.35 (Rs2,695) a barrel on the New York Mercantile Exchange today and has more than doubled since the start of 2004. Prices of Newcastle coal have gained 33% in that period, according to McCloskey Group Ltd.
Petroleum and other liquid fuels will have a 34% share of global energy use in 2030, down from 38% in 2004.
Coal consumption will fall in Europe and Japan where natural gas and nuclear power are likely to continue providing significant amounts of electricity, the report said.

Bangladesh sees economic toll from political turmoil
Thu May 24, 2007 6:39 PM IST

By Serajul Islam Quadir

DHAKA (Reuters) - A drive to clean up Bangladeshi politics by the army-backed interim government could lay the groundwork for more sustained economic growth, but businessmen said it was also taking a toll on the economy in the short term.

Bangladesh has been under a state of emergency since Jan. 11, imposed in the wake of deadly violence between supporters of former prime ministers Begum Khaleda Zia and Sheikh Hasina.

An election planned for Jan. 22 was cancelled and all political activity banned as the government clamped down on corruption, detaining more than 160 key political figures in the process.

About $6 billion in foreign investment decisions are on hold until an elected government is in place, and the political uncertainty has slowed economic activity, businessmen said.

In addition, food prices are rising as Bangladeshis hoard supplies, partly because of the political uncertainty. The country has raised fuel prices, adding to inflation worries.

"We want to see corruption reduced and controlled, but at the same time we want to see the investment taking place," A. Gafur, executive director of American Chamber of Commerce in Bangladesh, said.

"The initiatives taken by the present government will in the long run help business and economy," Gafur told Reuters.

"People want to give time to this administration, but at the same time they do not want any waste of time."

The governor of Bangladesh's central bank, Salehuddin Ahmed, said on Wednesday the economy might miss some key economic targets.

He said economic growth might fall short of the 6.5 percent target in the current fiscal year to the end of June.

Inflation could also top a target of 6.95 percent this fiscal year and push into double-digits later unless the country organised more supply of staple food to alleviate price pressures.

Billions in investment proposals are on hold for projects in such sectors as energy, coal mining, fertiliser and steel.

"At the end of year 2007, Bangladesh may miss the target to secure $1 billion in foreign direct investment by up to 30 percent," said Mohammad Nazrul Islam, the head of the state-run Board of Investment (BOI).

S. Manzer Hussain, resident director of India's Tata Group, which has proposed investing $3 billion in the country, said the company was waiting for a return of an elected government before finalising a deal.

"We want to continue our discussion with the present government but prefer to get a decision from a political government," he said.

Britain's Asia Energy has a $3 billion investment proposal and the Abu Dhabi Group of United Arab Emirates has a $2 billion proposal, BOI's Nazrul said.

Fakhruddin Ahmed, a former central bank chief who heads the interim government, has said an elected government was possible before the end of 2008.

Still, Abu Ahmed, professor of economics at the Dhaka University, said Bangladeshis have hopes that the government's efforts will lead to a more prosperous future.

"Now the country is free from anti-economic growth activities, and people see light at the end of tunnel," he said

Dhabi Group keen to invest in energy sector
FE Report
5/26/2007

The United Arab Emirates (UAE)-based business house Abu Dhabi Group (also known as Dhabi Group) has expressed its interest to invest in Bangladesh's energy sector.
In this connection, a team led by Energy Consultant of the Dhabi Group Amjad Awan and Chief Executive Officer of Warid Telecom Muneer Farooqui met Executive Chairman of the Board of Investment (BoI) Nazrul Islam recently and handed over a formal letter, said a press release.
In the letter, the Group has requested the BoI and other government bodies to extend support for further investment in energy, hospitality and real estate sectors.
"Dhabi Group is encouraged and interested in bringing more private investment in Bangladesh and intends to pursue investment in energy sector, which would include power generation both gas and coal based, and service sector that will include hospitality and real estate businesses", the letter stated.
The team also discussed ways of further investments in energy sector, the prospect, and issues of bilateral interest, the release added.

From Phulbari to Coal Policy
Nuruddin Mahmud Kamal
5/31/2007

THE quest by the country's professional organisations to find a new and viable energy source-coal, has already proved itself. But a presumption that in-country resource cannot be mobilised for development is unacceptable. Some of our policy makers almost always prefer foreign investors participation in the energy sector. The scenario should change now for the greater benefit of the nation.
It is now known that the Ministry of Energy unwittingly bought ideas from some companies and their associates about anti-people draft coal policy (DCP) formulated by a private sector organisation, financed by the World Bank, called the Infrastructure Investment Facilities (IIFC). Indeed, in the past two years since December 2005, as many as six versions of the draft policy has been made each time with the inclusion of new contentious clauses that would favour a foreign investor. In essence, the draft coal policy is clearly export motivated and export biased. The anxiety of people accelerated in March 2007 shows a coal reserve of 1460 million tonne, white one previous version of May 2006 stated that with a reserve of 2700 million tonne of coal, the energy demand of Bangladesh will be much relieved. How, has not been discussed. However, the most critical factor in this case is the percentage of recoverable reserves and the method of mining. More importantly, unlike gas, mining of coal is fraught with serious dangers and challenges regarding the devastation that open pit coal mining can cause to the large site areas.
One may also be tempted to argue that these statistics about the reserves are part of a number game. These numbers are not backed by any empirical research, nor by an international certification(s). Worse still is that the proposed coal policy is a stand-alone type. No coal demand-supply forecast has been reflected even in the most recent DCP published in March 2007, nor has it been integrated with either with the National Energy Policy, 1995 (updated in 2004), or with the Gas Sector Master Plan, 2006. Consequently, it is unknown at this stage to what extent, the coal would provide an alternative to or supplement or complement natural gas for generation of electricity. This is not a dilemma, but a matter of calculation based on the estimated demand-supply of energy. The draft policy did not even care to reflect the outcome of a study, if there existed any.
Notwithstanding, what the happy-go-juicy Ministry of Energy has emphasised on is that with a view to ensuring the energy security of Bangladesh, almost eighty per cent of the coal produced would be exported! The story is that the draft policy has indicated that the production of coal would commence from July 2007 based on open-cut-mining. But no where in the document, the estimation of in-situ reserve or even the recoverable reserve has been shown. Nevertheless, it stated the reserve to production ratio is to be fixed at a minimum of 50-years. Based on that assumption as stated in the draft policy, within the next 10 years, from July 2007, 20 million tonnes per annum coal would be produced. Thereafter, in the next 10 years the production will be increased to 40 million tonnes per year, perhaps up to 2027 or may be up to 2030.
But for whom such a highly magnified coal production seems necessary? Certainly not for Bangladesh. For whom then? Incidentally, for generation of say 5000 MW of electricity one would require only 2.8 million (two point eight) tonnes of coal per year, based on Barapukuria 250 MW mine-mouth power plant. Now, multiply that number with any thousand megawatt capacity the country needs in the next 30 years. For generation and supply of 5000 MW electricity, one would need 14 to 15 million tonnes of coal per year, for 30 years the figure could be around 420 million tonnes. Do we posses this amount of proven and recoverable reserve of coal for meeting our future energy demand? If we do, would we have exportable surplus? Incidentally, the value of coal for 1460 million tonnes (as stated in the DCP) may be estimated at US$ 84 billion @ US$ 60 per tonne though the international market price is showing an ascending trend.
There is one other aspect. The proposed Phulbari project is being sponsored by an internationally unknown company -- the Asia Energy Company (AEC) --now appears to have changed its signboard like a defaulter in petty business under the country's trade licence. Interesting though, the AEC's proposal envisages an annual production of 15 million tonne, about 12 million tonnes of coal to be exported annually out of their estimated total reserve of 572 million tonnes at Phulbari. In simple arithmetic, within a span of 30 years, AEC plans to produce between 85 to 90 per cent of the said reserve and export eighty percent, perhaps to India. The under discussion draft coal policy has learned the trick from the AEC's Phulbari Proposal to formulate a nae scheme for Bangladesh. Apparently, Tata has also indicated to follow the same footprint, however through a new route.
Some curious citizens would like to know further : where did the draft coal policy originate from? It is not a Sherlock Holmes detective story, rather a simple deduction. When Asia Energy Company failed to pursuade the people to agree on their terms, the company turned toward its mentor-promoter the former energy adviser. He entered through the 'Exit' gate in the darkness and tried to call the shot. It was too late for both AEC and Tata. No wonder they all disappeared in late 2006. They have reappeared again in 2007.
Meanwhile, it become apparent that there would be a case of violation of the country's Constitution with reference to Article 7(1)(2) and Article 143, if the coal policy is approved as proposed. I humbly submit that I am no expert on Constitution nor the Acts/Laws emanated from them. But as a conscientious citizen, I suspect that the supremacy of the Constitution may be jeopardised if the authorities ignore the provisions of Article 7(1): "All powers of the Republic belong to the people and their exercise on behalf of the people shall be effected only under, and by the authority of the constitution". In the same manner, Article 7(2) states, "This constitution is, as the solemn expression of the will of the people, the supreme low of the Republic, and if any other law is inconsistent with the constitution that other law shall, to the extent of inconsistency be void." Article 143 states, "There shall vest in the Republic, in addition to any other land or property lawfully vested -- (a) all minerals and other things of value underlying any land of Bangladesh, b) all lands, minerals and other things of value underlying the ocean within the territorial waters, or the ocean over the continental shelf of Bangladesh etc.
In this perspective, it is inconceivable that people were not even consulted with regard to the transfer of "ownership" of mineral right and property. It is a shame that the politico-bureaucracy of the country never considered it necessary to discuss the provisions of law with the people in so far it relates to Phulbari coal mining proposal, and open-cut mining in particular. Consequent the local people violently protested, some even got killed. Yet, the previous political government pursued the issue. The bureaucracy as usual was busy in complicating the matter. They are doing the same thing even now.
Many coal mining countries in the world have their our coal mine Act. In this part of the world, the first coal Mine Act was formulated in the British India in 1900 that was updated in 1923 as the Indian Mine Act, 1923. This was followed, as a standard practice, by Mine Regulation 1926. After partition of India in 1947, the 1923 Act and Rules (1926) were amended. The Minerals Rules 1968 (of Pakistan) and subsequent amendments in November 1989 and 1995 respectively (in Bangladesh) were effected upon. Mine Rules and Regulations, made under the provision of Act were intended to operate within the framework of the same Mine Act. One very important institution built under law was the 'Inspectorate of Mines' to regularly monitor the activities of the mines. Unfortunately, neither a Mine Act exists in Bangladesh, nor an inspectorate of Mines. Yet the present bureaucracy wants a coal policy approved soon. There are many other nitty-gritty details, even many missing issues without which a policy normally can not be considered. Then, why the proposal is being pushed ahead for approval?
Coal, as we all know, is a dirty fossil fuel. It has become dirtier because of involvement of a debatable company -- Asia Energy. Now Tata is also trying to sneak in under similar conditions. With the change of a corrupt political regime, these cunning companies were manoeuvring alongside the bureaucracy to have the polluted sixth version (March 2007) approved by the CTG. This version also has not incorporated any clause about liabilities and penalties on the investors, be that local or foreign. The people already gained many nightmare experience in the energy sector in the past several years that has resulted in huge ecological and financial loss of the country's resources.
The royalty issue aside, the government should have considered profit or production sharing, joint venture or even a service contract for coal production, however keeping in view the concept of ownership of the mineral with the people. Otherwise, it will be violation of the supreme law of the country. Not a word of caution, but a suggestion, we would urge upon the Energy Advisor not to pursuer such foreign investor-driven Energy Policy in 2007. The proposed coal policy be made public. Let me reiterate : the proposed policy can not be decided in isolation, in secrecy and with foreign companies demands on mind. Instead, the coal policy has to be an integral part of a comprehensive energy strategy, and there exists one updated energy policy anyway.
(The writer is former Chairman of Bangladesh Power Development Board)

















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Govt may adopt modified NEP before approving coal policy
M Azizur Rahman
6/1/2007

The government now prefers adoption of a modified National Energy Policy (NEP) before approving the proposed National Coal Policy (NCP) to utilise the country's energy potentials and ensure energy security in the coming years.

The Energy and Mineral Resources Division (EMRD) of the Ministry of Power, Energy and Mineral Resources (MPEMR) has already obtained a draft NEP prepared with the assistance of the United Nations Development Programme (UNDP), a senior EMRD official told the FE.

"The new NEP will be treated as the guideline for utilisation of the country's energy resources, including that of coal, in a planned way," said the EMRD official. The NCP that outlines future consumption of the country's huge coal reserves will be adopted after making the NEP effective, he said.
The EMRD has already completed scrutiny of the draft NEP, which is expected to be approved within a month.

If approved by the Advisory Council, the new NEP will replace the existing NEP adopted in 1996. Sources said the new NEP is targeted to ensure energy consumption for sustainable economic growth so that the country's energy resources are utilised properly and the economic development activities of different sectors are not constrained by energy shortage.

It has also outlined a target to ensure optimum development of all the indigenous energy sources and sustainable operation of the energy utilities.
The updated NEP is set to ensure rational use of energy sources and encourage public and private sector participation in the development and management of the energy sector.

The energy policy will also ensure reliable supply of energy to the people at a reasonable and affordable price and develop a regional energy market for rational exchange of commercial energy to ensure energy security.
Despite having multiple sources of energy such as coal, bio-gas, solar-energy, wind-energy, hydro-power and renewable energy, the country is now dependent on natural gas as the main indigenous non-renewable primary energy resource.
Natural gas is the main source of commercial energy and plays an active role towards economic growth of the country and it accounts for about 70 per cent of the country's commercial energy supply.

Due to over-dependence on natural gas, the country's gas reserve is depleting fast, the EMRD sources said.
According to the EMRD, the country's present proven reserve of gas is 8.39 trillion cubic feet (TCF) as 6.8 TCF has already been extracted over the past 50 years from the original reserve of 15.19 TCF in its 22 gas fields.
If proven and probable reserves of around 14.4 TCF are taken together, the country's gas stock will be emptied by 2015, the report pointed out.
The country will need a further 24 trillion cubic feet (TCF) of gas and investment worth US $ 7.7 billion in the next 18 years up to 2025 to achieve an average annual economic growth at seven per cent, said a senior EMRD official.

The modified NEP will help reduce over-dependence on natural gas for commercial use.

Besides, according to Geological Society of Bangladesh (GSB), the country has high quality coal reserves of over 2.7 billion tonnes, equivalent to 70 TCF of gas, which is five times more than the country's proven gas reserve of 14 TCF.
But due to inadequate policy measures, the government is now forced to import coal from neighbouring country to run the lone coal-fired power plant at Barapukuria in Dinajpur.

Further progress:

Energy division plans to form
advisory body on coal policy
Staff Correspondent
The Mineral Resources and Energy Division plans to form an advisory committee to scrutinise and appraise the draft coal policy to avert controversy over the coal export issue and mining method that. The controversy has been raging for two years, delaying the finalisation of the policy.
Energy adviser Tapan Chowdhury has short-listed eight respected people of the civil society including academics, professionals and journalist as members of the committee.
Sources in the division, however, said that the only two academics and professionals among the eight people have experience in dealing with coal-related issues and the rest of them have little or no experience.
Noted energy expert, Professor Nurul Islam of the Bangladesh University of Engineering and Technology, who submitted a number of recommendations on the coal policy, most of which were adopted in the draft, was not included in the list.
Tapan told New Age on Thursday that they were yet to finalise the list of the committees members. We will soon finalise the names and will invite them to be a part of the committee on coal policy.
When asked why they had not included Professor Islam, he replied, He has already given his recommendations, many of which were incorporated in the policy.
The energy divisions committee on review of draft coal policy, headed by additional secretary Wahidunnabi Chowdhury, continued to be reluctant to include a recommendation of Professor Islam that the government take up a pilot project on the environmentally disastrous open-pit method of mining.
Professor Islam recommended that the proposal Coal Bangla, an organisation like Petrobangla, should take up a pilot project with government funds to extract coal by applying the open-pit method to find out whether the method is viable in a geographically small country like Bangladesh which cannot afford to lose productive farmland. The open-pit method will displace more than a hundred thousand poor people and make farmland that yields three harvests a year agriculturally useless, according to certain well-informed people.
He recommended that the foreign companies be allowed to extract coal by using the open-pit method if the project is successful.
Till the pilot project is completed, foreign companies should only be allowed to extract coal by using the underground mining method, he recommended.
Energy officials, however, were reluctant to include the provision for a pilot project with government fund as they claimed that the government would not be able to provide the huge investment that is needed for operating an open-pit mine.
A number of foreign companies, including Asia Energy and the Tata Group, want to extract coal in Phulbaria and Barapukuria by using the open-pit method of mining, which many energy experts believe will destroy the environment and make fertile land totally unproductive.
The division has so far included about 90 per cent of the recommendations made by Professor Islam in the draft coal policy.

UPDATED: 21:35, June 07, 2007
Bangladesh to realize self-sufficient on power by 2010



The Bangladeshi government has set a target to generate sufficient electricity by 2010 to reach a level where there will be no load-sheding in the country.

Finance Advisor of caretaker government MD. Azizul Islam said this when announcing fiscal year of 2007-08 budget Thursday.

Islam said although the demand for electricity increased manifold during the past few years, generation did not increase correspondingly.

When the summer comes starting from March, Bangladesh has been facing serious shortage of power. In the capital Dhaka, many places have a load-shedding of around five hours a day. In the districts, load-shedding hours are even more.

The Energy and Power Advisor Tapan Chowdhury said earlier there will be no new electricity generation before September 2008.

Global Coal Management PLC
08 June 2007

Global Coal Management Plc



Further investment in GVM Metals Limited


Global Coal Management plc announces that on 07 June 2007 it acquired a
further 3,100,000 shares in GVM Metals Limited at a cost of 930,000 and that it
now holds an interest of 20,300,000 shares, 10.33% of the issued share capital
of GVM Metals Limited.



08 June 2007

Sat. June 09, 2007

Draft Bangladesh Coal Policy
Some observations
Engr. A. K. M. Shamsuddin

Minimum Work Obligations under "Exploration Licence" and "Mining Lease" need to be specified in the draft Bangladesh Coal Policy. Findings from Work Obligations under Exploration Licence may also be specified there. These are vital issues and should be included in the draft coal policy which will work as guidelines for the licensee and lessee.
Minimum work obligations under "Licence" for coal exploration may cover the following work components:


1) Topographical survey of the licensed area; 2) Seismic survey covering the licensed area; 3) Exploration drilling covering the coal basin area; 4) Hydrogeological testing of the boreholes; 5) Pump tests of the boreholes; 6) Geological logging, Geo-physical logging of the boreholes and core recovery; 7) Chemical analysis of coal samples and Geo-Technical information of rock; 8) Proper and effective sealing of the boreholes on completion of drilling and other tests.

9) Initial Environmental Examinations (IEE) and Environmental Impact Assessment (EIA) due to coal exploration work i.e. seismic survey and drilling.

After above field work for coal exploration the licensee should recommend the minimum following information in their "Exploration Report" for the consideration of Bureau of Mineral Development (BMD): 1) In-situ geological coal reserve in the coal basin; 2) Measured or proven coal reserve and measured or proven area of the coal basin; 3) Indicated or probable coal reserve and indicated or probable coal basin area; 4) Mineable coal reserve; 5) Outline of the mine plan; 6) Outline of the mining methods; 7) Probable list of equipment and materials for mining; 8) Financial analysis of mining the coal reserve; 9) IEE/EIA report on coal exploration.


Scope of works or minimum work obligations under "Lease" for coal mine development and operation may cover the following work component: There are two parts of work under "Mining Lease" (a) Mine Construction and Development, (b) Mine Operation and Maintenance, which contain:


Mine Construction and Development: 1) Initial Environmental Impact Assessment (EIA) due to mine development and operation; 2) Initial Social Impact Assessment (SIA) of leased area; 3) Rehabilitation and resettlement issues in the leased area; 4) Mine design and planning; 5) Detail EIA and SIA of the leased area. [It may be mentioned here that EIA and SIA of the leased area can be done effectively and judiciously only after the design of the mine and the mine plan. After completion of the mine design and mine plan a clear and vivid picture of geology and geo-technical issues of the underground mine or surface mine can be assessed and EIA and SIA can be conducted accordingly]; 6) Shaft sinking; 7) Pit-bottom development, roadway development, coal face development, etc.; 8) Subsidence effect.

Mine Operation and Maintenance: 1) Coal extraction technology from coalface; 2) Strata control, roof control, water control; 3) Coal transportation system from mine to power plant; 4) Mitigation plan of environmental impacts; 5) Mine Environmental Management Plan (EMP); 6) Mine ventilation and safety; 7) Control of air-borne coal dust and spontaneous combustion; 8) Components of mine rescue team and duties and responsibilities of the rescue team; 9) Emergency Response Plan (ERP).

It is very important to specify the above minimum work programme under "Exploration License" and "Mining Lease" in the draft coal policy. Details of these work obligations under "Exploration Licence" and "Mining Lease" and findings from Exploration Licence may be described under existing Bangladesh Mines and Mineral Rules. Present Mines and Minerals Rules do not contain those.

Specific condition for an applicant of "Mining Lease": An applicant for mining lease should complete the coal exploration work under exploration license before applying for mining lease. Or, in other words, provision may be made in the coal policy for a mining leasee to undertake the coal exploration work during the first three years (maximum) of mining lease. After acceptance the coal exploration work by Bureau of Mineral Development (BMD) the leasee can start work under mining licence. It means that work under exploration licence and submission of coal exploration report to BMD is obligatory for undertaking work under mining lease. The above points may be considered for incorporation in the draft coal policy.

Amendment of Clause 2.2 (GA) and Annexure-KA of reserve table: In the clause 2.2(GA) of the latest draft coal policy it has been mentioned that 60 million tons of coal can be extracted from both Dighipara and Khalashpir underground coalmines. But the techno-economic feasibility report on Khalashpir coal deposit submitted to BMD on August 23, 2006 reveals proven reserve of 297.57 million tons in three seams and a total reserve of 523.49 million tons spreading in eight coal seams covering an area of 7.5 sq. km. This is the outcome of high resolution of 2D and 3D seismic survey over an area of 12.25 sq. km. and drilling of 17 boreholes (14 holes by Hosaf and 3 holes by GSB) at Khalashpir coal basin. In the Khalashpir coal feasibility report it has been further shown that 92.20 million tons of coal could be produced from seam I, II and IV during 30 years. The rest of the coal can be produced in future as per requirement of the country. Accordingly the Clause 2.2(GA) and Annexure-KA need to be amended.

Reserve of peat coal: Peat coal has been discovered in Khulna, Faridpur and Madaripur in 1957. A study made by UNDP in 1983-84 revealed the existence of 400 million tons of peat coal in different areas of Bangladesh. Petrobangla under a study with the assistance of CIDA in 1986 discovered 61.27 million tons of proven reserve of peat coal in Dakatia and Kala Mouza in Khulna and Chanda-Baghia area in Madaripur at a depth ranging from 2.0m to 4.0m from surface. Since it is near surface deposit 55.00 million tons of peat coal can be extracted considering as 90 per cent recovery. Though the heating value of peat coal is about 6,370 Btu/lb and moisture content is very high (70% to 80%), these peat coals can be used in small-scale power plants (10-20MW) and brickfields. The above findings may be reflected in the respective clauses and tables of the draft coal policy since reserve of peat coal has not been shown in the reserve table under Annexure-KA.


Clause 3.4.3 (coal briquette): Preparation of briquette should be done from peat coal only.


Coal bed methane: No study about the contents/assessment of coal bed methane has been done in any coalfields of Bangladesh. Therefore contents of methane is to be assessed first before undertaking any programme for the extraction of coal bed methane. This type of study may be conducted in Jamalganj coalfield. Great depth, high temperature, high-grade coal, high thickness of coal seams are some of the features for finding coal bed methane. Jamalganj coal field has got all these potentialities. This may be incorporated in the respective clauses of draft coal policy.


The findings and conclusions of the above observations are for the consideration of the appropriate authority responsible for finalisation of draft Bangladesh Coal Policy.

published 9/6/2007

Page [ 1 ]

Dhaka, June 9 - After the Indian industrial giant Tata Group, the UK-based Indian giant Mittal Group is also keen to invest in Bangladesh. A high level delegation of the Mittal Group, led by its Managing Director VK Mittal, arrives here tomorrow (Sunday) on a two-day visit to formally place a US$ 2.8 billion investment offer to the caretaker government.



The Mittal delegation will fly to Dhaka on a private aircraft Sunday afternoon and leave the capital on Monday afternoon.



The Mittal Group is one of the largest business conglomerates in both India and United Kingdom (UK) with US$ 28 billion investment in 27 countries across four continents - Europe, Asia, Africa and America.



The Group has already expressed its keen interest to invest in different sectors in Bangladesh through its local agent GRH Bangladesh Limited, which is now arranging the visit of the industrial giants top executives.



The sectors included in the UK-based Indian business groups investment plan are energy, power generation, coal-mine development, and production of ethylene dichloride, caustic soda, LPG (C3) LPG (C4) and hydrogen.



The investment in energy sector, particularly in gas exploration and power generation, would get top priority if the group is given a chance to invest in Bangladesh, Syed G Dastagir Nishad, chairman of GRH Limited, the local agent of Mittal Group, told UNB.



He said the Mittal Group is set to sign a memorandum of understanding (MoU) with the Board of Investment (BoI) seeking to materialize its investment plan and explore business in Bangladesh.



During its stay in the capital, delegation chief VK Mittal, who leads the Global Oil and Energy of the Mittal Group, is expected to call on President Iajuddin Ahmed, Chief Adviser Fakhruddin Ahmed, Army Chief General Moeen U Ahmed, Energy Adviser Tapan Chowdhury and some influential policymakers of the government.



The Mittal delegation will be accompanied by the groups director for international business affairs Javed Pasha, a former minister of Pakistan.



After its merger with Europes top steel manufacturer Arcelor, the Mittal Groups ArcelorMittal became the world's number one steel producer with 320,000 employees in more than 60 countries.



ArcelorMittal has led the consolidation of the world steel industry and today ranks as the only truly global steel maker with plants in 27 countries.



ArcelorMittal is also a leader in all major global markets in varied fields, including automotive, construction, household appliances and packaging.



Its industrial presence in Europe, Asia, Africa and America gives the Group exposure to all the key steel markets, from emerging to mature.



ArcelorMittal key pro forma financials for 2006 show combined revenues of USUS$ 88.6 billion. Its production was equivalent to around 10 percent of world steel output.



It is currently listed under the legal entity Mittal Steel NV on the stock exchanges of New York, Amsterdam, Paris, Brussels, Luxembourg and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia.

published 19/6/2007

Page [ 1 ]

By Tanim Ahemed

UNOCAL discovered the Bibiyana gas-field in 1998. This field about 180 miles northeast of Dhaka has a reserve of 2.4 trillion cubic feet of gas and has only begun to supply gas to the national grid recently, augmenting the total gas supply to bring at a par with gas demand. The time between discovery and meaningful production of the field (about 25 miles from the national gas grid) was much longer than needed because Bangladesh refused to export gas through pipeline to India. Pending the governments agreement for exporting this gas, Unocal, which was the operator at that time, refused to develop the field. In fact, the agreement between the operator and the government was only signed in November 2004, six years after discovery.

Unocals plan to export Bibiyana gas was not mere wishful desire, although export through pipeline was, and remains, prohibited by the production sharing contracts. The company even submitted a pipeline development plan to Petrobangla in October 2001. The proposal was to build a 30-inch diameter, 847-mile pipeline, with an initial capacity of 500 million cubic feet of gas per day, from Bibiyana to Delhi. The Unocal press release of October 30, 2001, reads: The Market Feasibility and Commercialisation Plan included a comprehensive review of LNG and other options available for commercialisation of Bibiyana field and concluded that an export pipeline to markets in India results in the highest value for Bibiyana gas for Bangladesh.

Among the significant benefits to Bangladesh that the press release harped on were an estimated $3.7 billion in total revenues over the 20-year project life ($185 million per year), $500 to $700 million in immediate foreign direct investment, additional foreign exchange, social benefits, construction and operations jobs, besides promotion of additional exploration and expansion of domestic gas pipeline infrastructure.

At that time there was much hype over whether to export natural gas. While some quarters favoured gas exports, critics to this proposal pointed out that this was a valuable resource that the country would have much use for in future. The decision not to export gas has proved right. The use of natural gas is becoming widespread and surely adding to the over six per cent GDP growth of the country. The suggested benefits to the economy that the Unocal press release exhorted now seem to have verged on the ridiculous.

The current situation regarding coal has stark similarities to the deliberations over natural gas. The proponents and opponents of coal exports and open pit mining seem to be repeating their arguments based on the same rationale of a decade ago.


Now it is coal

The coal issue came to the forefront only recently and especially after the much-hyped $3-billion investment proposal by the Indian conglomerate Tata. Tata wanted to set up a coal-based power plant in Barapukuria, which it wanted to develop by open pit mining and export the excess coal, since the production capacity of the mine would be far more than Bangladesh could consume. Around the same time there was another proposal for an open pit coalmine to be developed in Phulbari by the UK-based Asia Energy. While the Tata proposal was delayed and finally suspended till the next elections Asia Energy faced a much greater debacle. Asia Energy had also proposed to export coal for a six per cent royalty on the value of the coal extracted. Their bid for open pit mine, which would require eviction of some 1,00,000 people, including thousands of indigenous peoples, was convincingly rejected through a peoples movement at Phulbari, which culminated in bloody violence in August 2006. The government signed an agreement with the people pledging to prohibit open pit mining. Since then, and particularly since the military-backed interim government came to power, there seems to be a movement regarding coal particularly as regards formulating a coal policy that many quarters fear would favour foreign companies.

According to contested estimates, there are some 2,700 million tonnes of coal deposits in Bangladesh. The first draft of the coal policy, prepared by the Infrastructure Investment Facilitation Centre, says Bangladesh has an estimated mine-able reserves of 1400 [million tonnes] equivalent to some 37 trillion cubic feet of gas. It would be worth a staggering (at $70 per tonne, given that it is high quality coal) Tk 6,86,000 crore. But this would only be possible with open pit mining, which the draft favours. The only alternative, therefore, is to go for large-scale opencast mine with high annual outputs. Opencast mines damage a large land surface area, displace people from their ancestral homesteads and cause agricultural losses. But the value of the coal assets under the ground is high, compared to the resettlement expenses of local population, the price of crops, impact to environment, etc, the draft said. Such a conclusion warrants studies and comparative analysis, of at least one coal mine, to be substantiated. The policy does not provide one.

In the next paragraph of its vision statement, it says that Bangladeshs coal would have a good international market as steam coal and that modern technology would allow companies to exhaust all deposits within the next 30 years. It is, therefore, necessary that yearly production target for each such mine would have to be set in such a way that the coal is utilised for both domestic and export uses, signifying the need for some export controls. But there is no point allowing export of a non-renewable energy source when it is guaranteed that Bangladesh does not have enough in the first place.

The policy states that given the extent of local coal use, foreign investors should be allowed to export double the amount of domestic consumption for the first 10 years and equal to the amount of domestic consumption in the following years. This is exactly what Asia Energy had proposed for Phulbari when critics pointed out that only a few countries export coal, and that too, not exceeding five per cent of their entire coal production. The similarity of the two is not coincidental. Certain quarters, especially those opposed to export and open pit mining, suspect that the companies interested in coal mining may have intervened in the policymaking process and manipulated with its contents.

The discussion currently focuses on these two issues export and method of mining which would largely decide the extent of commercial profit for private investors. As is generally the case for large commercial ventures, the financial aspect is exaggerated while the human aspect is underplayed along with the environmental concerns. It is, of course, the right stance for an investor but should not be the stance of a government, elected or not.


A few considerations

The export issue hinges on the provision for open pit method. This is cheaper than underground mining and allows far higher recovery of coal. Production at such a mine would be far more than what Bangladesh could consume. The central issue is to decide how much foreign direct investment coal mining should cost the government. Investment in mineral extraction is by nature, and almost by definition, predatory. However, before approving a certain investment proposal the government should weigh the benefits against the costs. The benefits, as for any investment, include potential employment generation, a possibility of better distribution of wealth if the company is willing to float shares, transfer of replicable technology and increase of foreign exchange reserves. On the other side, the costs in this case include, resettlement, building infrastructure for the coal to be transported from the mine to a port, environmental hazards and whether outflows of foreign exchange in profit repatriation outweigh the initial inflow. It would be up to the government how much to value the lives and livelihoods of several thousand indigenous peoples. It would also be a matter of choice whether to calculate the value of land at current levels or at levels that they might reach in 30 years, or the value of crops lost along with the extent of employment it generated. It would be very likely that after the mine is abandoned the soil would become infertile altogether, where the locals currently produce between two and three crops a year.

A decision to export coal should also depend on Bangladeshs future energy demands. This could be estimated with the projected growth of the economy in general. The estimates provided in the policy drafts presume a maximum growth rate of seven per cent and predict requirement of an additional 26 trillion cubic feet of gas till 2025, equivalent to almost a billion tonnes of coal. What would happen afterwards is not indicated by any estimation. It would not have been too difficult to imagine, however, if the government had decided to export gas back in 2001 when Unocal pressed for it and quarters sided with its view of maximising commercialisation of energy source. Even then few had predicted that the economy would ever show the possibility of growing at an average of six per cent. This growth will hopefully increase as the country realises its potential to the fullest. When making these estimates, projections should presume the maximum possible growth and energy demand for reasonably long period, at least 50 years.

On the other hand, immediate development of the coalmines and exports would add to the foreign reserve and generate some employment Asia Energy predicted generation of 1,100 permanent and 2,200 temporary jobs. Asia Energy claimed that its activities would affect some 17,000 hectares of land. The pit would reportedly be the size of the entire Sylhet city. A provision for open pit mining must then offset the costs of what all that is currently in place on the ground and prove to be significantly more than that. Asia Energy claimed that its venture would result in some 20,000 additional jobs. However, it would have led to about 1,00,000 people losing their land. The mine would have also led to a depletion of water tables in about 300 square kilometres, affecting agricultural employment and produce of a much larger area.

Typically open pit mines are located away from human settlement. Bangladesh has a population density of some 1,079 people per square kilometre, while Australia has three per square kilometre, Germany 237, India 363, China 139, Indonesia 120 and the United States 32. Although agriculture remains sensitive and crucial, these economies have a matured industrial and services sector that could easily make up for the losses of crops or agricultural employment, if any at all. These countries are also much larger than Bangladesh in landmass, which would mean that several thousand hectares would not be a significant area.

A BBC report on July 12, 2006 states: Studies in open-pit mining in other countries, and particularly one from Pennsylvania in the United States, found that one river 160 kilometres from the pit was still poisoned three decades later. Among other harmful effects is the production of sulphuric acid from exposed coal surfaces when they come into contact with water and air. As water drains from the mine, the acid moves into waterways. It pollutes the soil as well as streams by acidifying and killing fish, plants, and aquatic animals. Apparently by the late 1930s, it was estimated that American coalmines produced about 2.3 million tonnes of sulphuric acid annually.


and one small concern

According to article 143 of the constitution, taken together with article seven, all mineral resources belong to the republic, and in turn all powers of the republic belong to the people. The government is, therefore, only acting on behalf of the people as far as coal is concerned. The deposits of 1.4 billion tonnes of coal worth at least Tk 6,86,000 crore translate into roughly Tk 47,000 for every Bangladeshi citizen. But the people, who are really the true sovereigns of the republic, do not know the fate of their property and the terms under which it would be leased out. Between the first draft, dated December 1, 2005, and the fifth draft, dated May 30, 2006, only the first two are available on the internet but the subsequent drafts have been kept strictly secret. The only means to gather information has been through occasional reports in the popular media.

Although the energy adviser to the government, Tapan Chowdhury, has mentioned the possibility of consultations with the private sector, there have been no visible efforts of the government to ensure that the concerns of all quarters of the people have been accommodated. Neither has there been any effort to explain the governments stance regarding controversial issues and the rationale for such a stance to the general populace. After all, it is their property that the state is handling and the people, therefore, have the right to know. The secrecy, as it typically does, is only fuelling further confusion and doubts in the minds of the people. Especially given the fact that the current government is not an elected one nor was it mandated by the people to govern them and their interests the relevant authorities should have been all the more forthcoming about the process and fate of coal policy only to have acted responsibly, if not to quell misgivings.


In the name of energy security

All the five drafts of the coal policy exhort energy security. The fifth was apparently referred to Nurul Islam, head of the Institute of Appropriate Technology at the Bangladesh University of Engineering and Technology. He was asked to submit his views, in complete confidence, to the Prime Ministers Office, when the BNP-led government was still in office. But it is apparent from his comments and observations that the essence of the subsequent drafts has not changed.

Although the drafts exhort Bangladeshs energy security as the prime concern for all coal-related activities, the term itself has not been included in the list of definitions. Thus, it is quite up to the interpretation of the reader. Energy security should ideally mean a reasonable access to energy for a sustained period of time. The period of time as suggested by Nurul in his observations and apparently accepted by Tapan is 50 years. A report in New Age, on February 28, quoted Tapan as saying, First we will ensure that the coal reserve meets our local demand for 50 years, and then we will think of exporting surplus coal. There will be no provision that will allow export of coal without meeting our local demand.

But even the fifth version of the coal policy does not explore ways to ensure that coal deposits last till 2025 and beyond although it mentions that production and exploration plans should be put in place to ensure energy security till 2050. Funnily the policy states that in case there are indications that coal deposits would be depleted before the timeframe, the Geological Survey of Bangladesh should encourage to undertake further exploration for discovering appropriate deposits. If it were indeed the case that exploration resulted in further discovery of energy sources, then all the countries of the world would conduct exploration through private agencies and become energy secure for however long they desired.

Furthermore, the fifth version also stated that in order to ensure energy security, Bangladesh must enhance coal production capacity to 20 million tonnes per year within 10 years and then to 40 million tonnes within 20 years. It also states that for the first 10 years power generation should be some 2,000MW and in the next 10 it should go up to 5,000MW with the extracted coal. Provided that production of each megawatt of power requires about 2,600 tonnes of coal per year, 2,000MW could be produced with about 5.2 million tonnes and 5,000MW with 13 million tonnes. It means the coal policy advocates for producing almost four times more than required for the first 10 years and about three times more than requirement in the following 10. And the only way to extract that much coal is through an open pit, which must be done for the sake of energy security according to the coal policy.

The projected production of 20 million tonnes to begin with and presuming the entire coal deposit is recoverable, Bangladesh would begin to produce 1.4 per cent of its entire deposit, although in contrast, India produces only 0.58 per cent of its reserves, the United States 0.013 per cent and China produces 0.25 per cent of its reserves.

The policy draft also deliberates on the functions of the state as regards coal exploration. The state is relegated to a supervisory role and extraction is left open to the private operator, a move that presupposes a policy decision that the state will not have any operations of its own.


As it stands

According to a report in New Age on May 12, a provision for export has been included in the policy stipulating that companies may export double the amount of coal to be consumed at the mine mouth power plant for the first ten years. For subsequent years the company would be allowed to export coal equal to the consumption of the power plant. This recommendation, reportedly made by Nurul Islam, limits the amount of coal exports to some extent since previously the amount of coal to be exported would depend on the total domestic consumption of coal. Nurul Islam had initially opposed the bid for coal exports.

He had also opposed open pit coal mining considering the population density, possible environmental hazard and the deterioration of fertile land. He had initially recommended an outright ban on open pit mining until the government itself carried out a pilot to ascertain its suitability. However, the policy leaves the mining method upon the discretion of the mining company.

The policy is currently being scrutinised by a committee headed by Wahidunnabi Chowdhury, an additional secretary of the Energy Division. Since there is disagreement among the committee members over the mining method, as the report stated, there is a possibility that the method would be left to a special committee that would decide on the method on a case by case basis.

Another report in New Age, published on June 11, stated that the government had appointed an eight-member committee to finalise the draft. This committee does not include Nurul Islam, although he has been instrumental in formulating the policy as it currently stands. The committee will reportedly be headed by Abdul Matin Patwary, vice-chancellor of the Asia Pacific University and former vice chancellor of the Bangladesh University of Engineering and Technology. The other members are the University Grants Commission chairman, Nazrul Islam, journalist Ataus Samad, Badrul Imam, professor of geology of Dhaka University, Dr Mustafizur Rahman, economist and research director of the Centre for Policy Dialogue, Petrobangla director (mines and minerals) Md Maqbul-E-Elahi, Infrastructure Investment Facilitation Centre executive director Nazrul Islam, and a representative of the army.

The composition of the committee will certainly raise questions as to what criteria had been set for the committee members and how each might contribute to the draft policy. The army might feel that it should have a representative on the committee because eventually they would be the ones to be blamed. But then exclusion of farmers, who are the largest employers of the country or garment workers who earn the prized foreign exchange cannot be justified, more so because every citizen has a share of that coal and may very well demand to have a part in the decision-making process, especially since the military-backed regime does not have the mandate to govern them.

The committee that would decide on the coal policy should keep that in mind. Each of the members must act with complete faith and sincerity with a single end welfare of the people in mind. The responsibility to ensure that people get their fair share also lies with this committee. Its decision must not leave any doubts in the peoples mind as far as their welfare is concerned.

The countdown has started !! Can the govnt really forfeit billions in tax revenue from these projects? Personally, I HOPE NOT !!


Decisions on investment by Tata, Asian Energy, Mittal Group by July 15

UNB, Dhaka

Executive chairman of the Board of Investment (BoI) Nazrul Islam Tuesday said the government would give its final decisions on the stalled investment offers placed by international investment groups like Tata, Asian Energy and Mittal Global Oil and Energy by July 15. "No further delay the government will give its decisions by July 15 on the investment proposals of Tata, Asian Energy and Mittal Group," he told reporters after his meeting with a visiting investment delegation from Singapore at the BoI office.
Sources at the BoI said there is a move by the government investment promotion agency to have concrete decisions on the pending investment offers made by the foreign investors.
Among the interested investors, Indian Industrial giant Tata Group placed an offer to invest US$ 3 billion while UK-based Asia Energy made an investment offer of US$ 2 billion to develop open-cast coal nine and set up a power plant. Mittal Group came up with a US$ 2.9 billion investment offer in energy sector.
"Our top officials are working on the issue and holding meetings almost everyday at the Chief Advisor's Office That's why we're expecting a breakthrough regarding the pending investment offers," said a top official.
Meanwhile, the delegation of Singapore's Textile and Fashion Federation (TaFf), which came here on a four-day visit, expressed keen interest to investment in the country's textile and clothing sector.
"We've keen interest to invest in Bangladesh's textile and clothing sector, we're exploring investment potentials...the business cost and labour price are very low here," said Benny Pua, head of the TaFf delegation and managing director of Unitex of Singapore.
Unfortunately, there was a power outage for over an hour when the business delegation was in the meeting, disrupting the lift service at the Jibon Bima Bhaban that houses the BoI office.
The BoI chief said the government gives importance to the investment offer from Singapore since the Southeast Asian country has been the third largest investor in Bangladesh.
About his recent visit to Germany, the BoI Executive Chairman said visited an open-cast coal mine in Colon of the European country to have experience about open-cast coal mining.
He said the coal mine in Colon set up a 5,000 MW power plant which proves the usefulness of coal in power generation. Bangladesh can also do that as it is experiencing huge power shortage.
He, however, said experts could give a better
answer whether open-cast coal mine is feasible for Bangladesh.

Thu, Jun 21 2007. 1:43 PM IST

Tata investment plan may finally get Bangladesh nod Posted:

New Delhi: The Tata Groups $3-billion investment plan, which has been lying in limbo for the past two years, may finally see the light of day in that country. The Bangaldesh government has indicated its willingness to reconsider the proposal and has said it will take a final decision on the issue on 15 July.
S. Nazrul Islam, chairman, Bangladesh Board of Investment, told the New Nation on 21 June that there would be no further delays and that apart from the Tata Groups proposals, the government would also decide on proposals forwarded by the Promod Mittal group and Asian Energy.
The Tatas had first indicated interest in investing up to $3 billion in Bangladeshs steel, power and fertilizer sectors in 2005.
Peeved at the prolonged delays, the Tata Group had early this year announced the suspension of its operations in Bangladesh, saying the government would have to decide on its investment as it was scouting for opportunities in other countries as well.
According to reports, the Bangladesh governments hard line on foreign investments has impacted inflows from abroad. Net foreign investment in the country fell 16.5% during July-March in 2006-07 fiscal to $385 million against $505 million during the corresponding period a year ago.
Other proposals that were kept on the backburner included UK-based Asian Energys plans for coal mining and setting up of power plant at the cost of $2 billion and the Promod Mittal-promoted Global Steel proposal to invest $2.9 billion in the countrys Bangladeshs energy sector. Promod Mittal is the brother of steel magnate L.N. Mittal.

118/120 COULD BE THE LAST TIME we see this !! come July who knows 5.00 + ??That is if they say YES !!!! here's hoping :)

smiler o, thanks for posting the info, it's good to have the background.

Am I right in saying that GCM are already 'contracted' to undertake the project and that they are awaiting Government approval for the Environmental studies to be ratified. They could in theory use a 'No' decision to claim damages/compensation should it all go pearshaped.

Suppose it's all about 'political will' in the end and it looks to me like the clock is ticking towards the energy end game for the country.

Darradev, I remain hopefull, I have been buying on the dips over the last 9 months but it will be an interesting few weeks ahead !