For the Best Utilization of Our Coal

by Naseer Ahmed

Natural Gas is the major source of commercial energy in Bangladesh. The country has a proven and probable gas reserve of about 20.5 Trillion Cubic Feet (TCF) out of which around 6.5 TCF has already been consumed and the remaining reserve is 14 TCF. The present average natural gas consumption in the country is around 1750 MMCFD (Million Cubic Feet per Day). Energy experts now infer that if there is no further discovery of natural gas in Bangladesh then by 2015 we will be in serious crisis.

Now, what is the remedy? Yes, we have a viable alternative. We have also coal in our country with a recoverable reserve of about 724 Million Tons, which is equivalent to about 19.02 TCF of natural gas. The five major coal fields of Bangladesh are Jamalganj (Jaipurhat), Barapukuria (Dinajpur), Khalashpir (Rangpur), Dighipara (Dinajpur) and Phulbari (Dinajpur). Our coal is of excellent quality. These are of Bituminous and sub-bituminous type with low Sulphur and ash content with high heating value of 11000 BTU/lb. But as on today we could not exploit our coal resources. At present underground mining has been started only at Barapukuria with a meager production capacity of 1 million Ton per day.

In absence of proper coal policy and direction so far Bangladesh could not take proper initiative and action in respect of coal. Now it is being heard that the National Coal Policy will be approved very soon. From the published information in the newspapers it is known that the Expert Committee Draft recommendations have been finalized. As per the Report published in the Daily newspaper Protom Alo the salient features of the recommendations are as follows:

Exploitation and Development of coal will done by the Government not by awarding lease to any local or foreign company. In this regard an organization namely ‘Coal Bangla’ will be formed where local or foreign partners can be incorporated.

Existing Royalty Rate of 5 percent in respect of Underground Mining System and 6 percent in respect of Open Cut System will be maintained. But time-to-time the matter of Royalty fixation will be reviewed and recommended by a High-level expert committee.

Regarding coal extraction system it has been mentioned that we have acquired some experience from Barapukuria Coal Field in respect of Underground mining system. But in case of Open Cut System a Pilot Project can be taken up—preferably at Barapukuria.

Export of Coal was not encouraged. Rather maximum utilization of coal for maintaining the pace of economic development was emphasized ---particularly ensuring fuel at economic price for the people and for generation of electricity.

For foreign partners regarding Production Sharing Contract—pricing of coal and sharing of benefits would be determined after proper review of production cost, International Coal Prices, prices of alternative Fuel and the matter of providing energy to our own people at reasonable and economic price.

In respect of coal field development environment protection, livelihood and rehabilitation of people in the neighborhood are to be properly considered.

From the reports it seems that the National Coal Policy, which is going to be finalized, soon will be people-friendly for Bangladesh and will be for the best interest of the people. Since coal will play a very significant part in the energy scenario of Bangladesh different Pressure Groups and Expert Groups are giving their views and lot of Round Tables are being organized nowadays.

Experts at a round table recently urged the Government to conduct a comprehensive feasibility study on the coal resources of the country and then finalize the coal policy as part of the National Energy Policy. They also demanded formulation of a long-term energy plan in the light of coal policy that would reflect the best national interest.

No body supports keeping our coal resources unused. But of course these resources should be used for the best benefit of the people of Bangladesh who are the owner of all resources of the country.

The writer is the Managing Director of BizEx Bangladesh Ltd. He also teaches in the MBA program of  East West University, NUB and ULAB, Dhaka. Email: bizex@bangla.net.