Government offered 30 percent of Phulbari coal mine stake by GCM

The Financial Express July 7, 2012

The London-based GCM Resources Plc has offered a 30 per cent stake to the government of Bangladesh (GoB) in the company, for open-pit commercial exploration of Phulbari coal mine, sources at the relevant ministry said on Friday.

“Such offers from big enterprises are not uncommon, and relevant authorities are found to accept them if experts find it feasible,” a senior official at the ministry of power, energy and mineral resources (MoPEMR) told the FE without giving details.

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Pitfalls of open-pit mining

The GCM Resources, formerly Asia Energy PLC, initiated recently talks in Bangladesh with a new approach to deal with the government on matters relating to exploration of coal at Phulbari, after a new management took charge of the energy firm.

However, a panel of United Nations special envoys expressed concern early this year that plans for an open-pit coal mine in Phulbari could displace more than 200,000 people. This concern is mostly in line with the assessment by local environment and rights’ groups.

The UN experts said the mine would destroy as much as 12,000 hectares of agricultural land. The mine would extract more than 570 million tonnes of coal during the next 36 years.

But officials at MoPEMR said each and everyone to be affected would be duly compensated for, and rehabilitated under adequate safeguard measures.

The energy authorities in Bangladesh have recently opted for exploration of coal as primary fuel in generation of electricity as the recent oil-fired quick and rental plants have proved themselves to be much costly.

Meanwhile, the Bangladesh Power Development Board (BPDB) has geared up formalities relating to processing of tenders for implementation of a plan to set up 13 coal-fired power plants at seven different locations to generate up to 7,800 mega watt (mw) electricity by 2015.

Of the 13 proposed plants, formalities relating to tenders for setting up five plants with an aggregate capacity of 2,500 mw in Dhaka, Chittagong and Barisal are now under completion, official at the BPDB said.

Though the country has a proven reserve of 3.0 billion tonnes of coal in five fields, the coal production continued to remain limited to around 1.0 million tonnes annually in Barapukuria coal field only. The coal extracted from Barapukuria is used in a 250 mw power plant at the mine-site.

Earlier, GCM Resources, following a lease contract for 30 years that was signed in 2004, discovered a deposit of 572 million tonnes of world-class coal reserve at Phulbbari in Dinajpur district.

The reserve constitutes high quality thermal coal to the extent of 60 per cent, with low ash metallurgical coal — also known as semi-soft coking coal — making up 20 per cent.

The remaining thermal coal is also of good quality and will have applications in industry and power generation.

The coal seam thickness varies between 20 and 65 metres at depths between 165 and 270 metres and 99 per cent of the open-cut mining reserve is contained in two thick coal seams, separated by a stone band that is typically 1-2 metres thick.

The coal will be extracted by the open-cut mining method, using trucks and hydraulic excavators as this is the safest and most efficient approach for the thick Phulbari coal seams and general geological conditions.

Open-cut mining is an established mining method and will enable maximum extraction of the coal seams along with progressive land rehabilitation andrestoration of agricultural activities.

In addition to coal, a variety of valuable industrial mineral co-products can be recovered from the overburden that will have to be removed to expose the coal prior to excavation.

The coal can be used in domestic power generation and in domestic industries such as clay brick and coal briquette production.

Coal for the domestic market will be largely transported from Phulbari by rail. Coal that is in surplus to domestic requirements, will be transported to international markets by rail, river and sea.

The Feasibility Study and Scheme of Development incorporated a full Social and Environmental Impact Assessment for the shipment of coal by rail to Khulna and then by barge/ship to other markets.

The Feasibility Study also included plans for rail track upgrades, a loading terminal at Khulna, navigation improvements to the Pussur River, a floating