Another Leap Forward For Phulbari Coal Project


BMI View: Bangladesh ' s coal mining sector is poised to make further strides in the coming years given ongoing governmental efforts to support the development of the Phulbari mine . The persistence of coal shortages in the country will override concerns over the social and environmental impact of the Phulbari project as the government seeks to alleviate deficiencies in electricity generation.

Bangladesh's coal mining industry is geared for further growth over the coming years as the government embarks on efforts to support the development of the Phulbari coal mine . In line with our expectations, the government of Bangladesh has continued to show its commitment towards the Phulbari coal project located in the northwestern region of Phulbari. Following a government-led report in October which endorsed the use of open-pit exploration, different agencies of the Ministry of Home Affairs have begun discussion with Global Coal Management Resources (GCM) in a bid to extend their support for a probable commercial exploration at the proposed mine. The project, spearheaded by London-based mining company, GCM, has remain in the doldrums since 2006 after widespread demonstration by the local community forced the government to ban open-pit coal mining and expel GCM from the country. It has been reported that the Phulbari coal mine would destroy more than 14,000 acres of land, contaminate local water supplies and physically displace as many as 220,000 people, mostly farming and indigenous households.

Structural Deficit To Drive Coal Mining Imperative
Bangladesh - Coal Production, Consumption & Balance ('000 tonnes)

A Parlous Undertaking…

A series of positive developments in recent months have brightened the future prospects of the proposed coal mine, potentially paving the way for the construction of the largest open pit mine in the world. The Phulbari coal mine, with an estimated reserve of approximately 570 mnt (million tonnes), has an expected lifespan of 35 years and if approved, would be able to start production within 3 years. Indeed, the development of the Phulbari mine would bring about a considerable boost to Bangladesh's coal mining production, which is dominated solely by Barapukuria Coal Mining Co. Ltd, a subsidiary of Petrobangla. The Barapukuria coal mine is an underground mine at Barapuluria in the Dinajpur District of Bangladesh and has an annual production capacity of approximately 1mntpa (million tonnes per annum).

…That Needs To Be Embarked On

Whilst growing opposition to mining activities will remain a major stumbling block for GCM, we believe the Phulbari coal project will eventually be constructed given the fact that coal will remain the cheapest source of fuel in Bangladesh over the coming years. The growing shortfall of coal production in the country has become increasingly evident in recent years and the government is forging ahead with plans to generate some 20,000MW of electricity by 2021. The Phulbari project could potentially address the country's electricity shortages by increasing the country's electricity generating capacity by more than 4,000MW. Indeed, we believe the success of Bangladesh in overcoming its energy supply shortage hinges greatly on the commencement of coal mining projects over the coming years.

This article is tagged to:
Sector: Mining
Geography: Bangladesh