Draft Coal policy

The draft policy suffers from many discrepancies and inaccuracies with regard to the information concerning reserves, utilization, and impact(more on draft policy in the NRB’s initiative). To begin with, the recoverable coal reserves mentioned in the draft differ from those in the national energy policy of 2004, and in GSB publications.

For example, the reserve for Phulbari coalfield is shown to be 400 and 572 million tons (MT) in the national energy policy and the draft coal policy, respectively. The coal reserve for Khalaspir is 450, 143, and 400 MT as per the national energy policy, the draft coal policy, and the GSB, respectively. Because of the great depth, the draft coal policy excludes 1053 MT of reserve in Jamalganj coalfield.

However, instead of excluding Jamalganj and other deep coalfields from the master plan, it is important to investigate the feasibility of developing these fields using underground coal gasification.

The draft policy has outlined four scenarios of power demand and distribution of usage of fuels for the period 2005-2025. These scenarios are based on the annual GDP growth rates of 5.2% and 8%, as well as for “sufficient” and “limited” natural gas scenarios beyond 2011. The basis for calculation for these scenarios is not clear. For example, as per the calculation (for GDP growth rate of 8%), the amount of electricity generated per MT of coal varies between 397 MW and 2560 MW, with an average of 712 MW. The reason for such a great variation (more than six times) is not explained.

A critical review of the coal policy,Md. Khalequzzaman, Ph.D.,The Daily Star,15th August 2007

NRB’s initiative on Coal extraction- a critical review on our coal

Dr Tawfique-e-Elahi , Advisor to Prime Minister of Bangladesh advised NRB energy professional Saleque Sufi living in Melbourne Australia in early February(2009) to source NRB professionals working with coal mining and related issues for a possible brain storming in Bangladesh.

 Exerpts

Petrobangla professionals living abroad formed Petrodesh, a web based group which later extended span adding Petrobangla professionals working in Bangladesh also.

Important brainstorming was held at Jamuna resort from 15^th-19^th June 2009.The NRB professionals were invited by the Government of Bangladesh to help assist government in formulation of the all important Coal policy with independent views. The NRBs deliberated on various related issues of coal mining like geology, hydrology, soil conditions, rock mechanics, environmental and social impacts management, resettlement and rehabilitation, mine city development.

The lone under operation coal mine at Barapukuria using Chinese Technology has triggered panic in the mine command area following initiation of subsidence.

Dr Elahi thought NRB professionals could share their experience and deliberate on

• ·         Barapukuria Underground mining specifically on mine subsidence, mitigation measures and future of the mine.
• ·         Mining at Phulbari, Dighipara, Khalaspeer and Jamalgonj to explore and exploit the resources.
• ·         Draft Coal policy.
• ·         Water Management
• ·         Resettlement and Rehabilitation issues of mine affected communities.

 

10 NRB professionals from USA, Canada and Australia eagerly participated in the brainstorming who are working with foreign companies in energy sector.

NRBs requested for some information from Petrobangla contacts in mid May. Some information could be gathered from various websites. In this situation professionals through personal initiatives collected information from different sources and shared among themselves. Australia based professionals occasionally assembled at Monash University and made initial brain storming. Professionals of USA also kept exchanging ideas.

Practising Mining Engineer Masud Hussain volunteered to visit Barapukuria Mine and stay there for few days to have first hand idea of Barapukuria situation while Saleque continued his search for documents. Still information related to Coal policy and Barapukuria mining were only shared and no information were officially provided on Phulbari mining and other discovered coal fields.

NRBs were informed that Bangladesh’s intention of   endeavouring to conclude a coal policy which saw 9 drafts in about four years. Two sharp lines of conflicting thoughts have evolved in Bangladesh through intensive debates in seminars, workshops and TV talk shows.

As such in an effort to obtain neutral views of NRBs, Government- NRBs contributions could be extremely important. Government also believed that NRB would not align with either of the two conflicting interest .Each NRB pledged to contribute from their neutral stand point.

Among others in the four day sessions Ministers, Advisors, Members of Parliament of Dinajpur and members of Parliamentary Standing Committee on Power, Energy and Mineral Resources  participated in very interactive sessions. Petrobangla and Government officials, Academia, representatives of GTZ and UNDP also featured in brain storming.

Opportunity Lost:

Bangladesh had great opportunity to effectively utilise the presence of some rare Bangladeshi energy breeds for reviewing as much issues as possible by the informed line NRB professionals but for conservative stance of some section of EMRD officials many contentious issues like disputes over mining methods, Phulbari mining issues remained outside discussion as Petrobangla under instruction from EMRD did not share information with NRBs. All relevant information was collected by NRBs through personal efforts and required discussion materials were prepared. But NRBs declined to discuss and opine on contentious issues failing to get information officially.

Barapukuria Underground Mining:

NRBs had reasonable information on Barapukuria mining .Engr Masud also spent useful time in the mine in days leading to the brain storming. NRBs could make specific recommendations and suggestions on Barapukuria. It appeared that there were several irregularities since the conceptual stage through approval of project, Engagement of Chinese Contractor on Suppliers credit, engagement of apparently inefficient Consultant. The mine design, mining technique appeared faulty and inappropriate.  On physical examination the HSE standards, mine safety appeared grossly inadequate.

The regional geology, Geo Physical condition, Soil Charactersics, hydrology, soil-rock mechanics, depth and characteristics of coal seam did not technically support underground mining.  Still to favour vested group costs of an inevitable impact – mine subsidence was deliberately excluded to make the unviable project viable. With vision to mine 20% of coal in place leaving critical cost of subsidence impacts the project was approved during  1994 when Geologists and Mining Engineers were spearheading energy sector. Masud in his presentations clearly identified the areas of concerns and vulnerability of the mining operations.

NRBs felt it wise to continue the present stage of mining with great care addressing safety concerns. Simultaneously appropriate planning to mine the remaining coal should be made by consultants having proven track record and experience. The various incidents of mining from mine flooding, gas formation, subsidence need to be critically analysed and properly documented for future reference.

Health, Safety and Environment Plan, Construction Execution Management Plan, Mine Ventilation Plan, Dust and Noise management plan, Water Management plan, Evacuation plan, Plan to work in Confined places , HAZOP must be made and meticulously followed. All persons working underground must be regularly made aware of mining hazards. Mine Manager and safety personnel must spent time underground on regular basis. Safety management drills must be carried out on regular basis. Mine inspectors must regularly audit mining operations and safety standards. NRB professionals felt that the Bangladeshi professionals working in the mine in doing wonderfully well with limited or no support of higher management and Chinese contractor as well as Consultant to keep the mine running. The very eager Barapukuria mining professionals need specific training. The Chinese contractor must be made to improve safety standards and prepare and submit all their available documents in English for auditing.

It appeared that mine at bottom seam through slicing in inappropriate age old Chinese only method triggered subsidence which has already made minining of a section of other seams impossible. This lost self burning coal may soon cause fire and other untoward incidents.

On preliminary analysis on available data and information it appeared that strip mining is the only answer to recover almost all of the remaining coal excluding the section already lost for our ignorance. However detail professional mine designing need to be made after documenting all information to opt for specific mining method.

Barapukuria Mining Project was not viable from day one .Some critical cost elements were deliberately ignored in cost benefit analysis. If included the project would not have been approved. The project was made viable considering 20% recovery. After mine flooding the revised design targeted for 10% recovery which even seems highly unlikely. What a colossal wastage of national resources.

Policy matters

Draft Coal Policy:

It was general feeling that such a voluminous policy document is unnecessary as there are National Energy Policy Mine & Minerals Act, Mines and Minerals rules are already in place. Policy should be a concise few page document. Mining methods, coal reserve, production control, price capping etc must not feature in policy.NRBs also felt that Coal Sector development committee was unnecessary and absence of coal sector development plan must not impede coal mining. NRBs identified 5 key areas which can feature in Coal policy. These are

• ·         Energy Security.
• ·         Institutional and Legal Framework.
• ·         Resource Mobilization and Economic Issues.
• ·         Source of Financing.
• ·         Incentives for FDI
• ·         Health, Safety and Environment.
• ·         Resettlement and Rehabilitation.

 

NRBs formed subgroups and after intensive discussions with assembled professionals formulated their recommendations. Later NRBs presented the set of recommeations for brainstorming. The recommendations on further value additions was planned to be submitted to government.

The basic suggestions were:

Energy Security:

Ø       The draft Coal Policy has estimates on the coal demand only for power generation for the next 20 years. This projection needs to be revised taking into consideration other industries where natural gas is currently being used and can be used as primary fuel.

Ø       Based on these estimates Bangladesh has to maximize the extraction and utilization of coal professionally addressing all mining impacts. The projected figures in the Power Sector Master Plan 2006 will be difficult to achieve, if the GDP growth rate of 8% is considered.

Ø       The full extent of the Bangladesh coal resources is still to be established. Further exploration and comprehensive feasibility studies need to be accelerated.

Ø       Based on current estimates of exploitable reserves, the question of export appears unrealistic. However, in situations where production goes beyond consumption capacity of domestic market, export may be considered in special situations.

Ø       The method of mining should be aimed to maximize extraction with due considerations to the environment.

Ø       The utilization of coal should be based on the principles of maximum value-addition and efficiency of use.

Institutional & Legal Framework for Coal and Minerals Development.

NRB professionals agreed with draft coal policy provision for formation of a separate corporate body /holding company Khoni Bangla for managing and owning all mining related public sector initiatives. The expertise of mining activities must be condensed to Khonibangla from BMD, PB and new line professionals must be recruited and arrangement for training them in accredited mining institutes must be made. Geologists, Geo Physicits and Mining Engineers are required for exploration and mining while electrical and mechanical engineers usually run mines.

Bangladesh must immediately introduce Mining Engineering Department at BUET. Absence of mining engineering education has seriously handicapped capacity of local mining industry. Mining technology must also be introduced in some selected polytechnic institutes .When mine city is set up a mining institute for continued training of mining pros may be set up.

NRB professionals suggested for formation of two companies Bangladesh Coal Company Ltd and Bangladesh Mineral Company Ltd. These companies may operate as fully autonomous body under company act.

NRB professionals suggested to Amend BERC Act to include Coal Sector Regulation within its ambit. . The requirement of independent regulatory commission is essential for growth and development of coal sector. NRB professionals suggested the following additional responsibilities for BERC. They also suggested engaging young truly efficient, dynamic energy sector professionals of wisdom and vision in BERC.

BERC Responsibilities

• Licensing & Permitting for Mining (BMD’s licensing & permitting functions will merge with BERC)
• Formulation of Mine Safety Codes.

 Office of Inspector General of Mines.

NRB professionals suggested for formation of an office of Inspector General of Mines under Bangladesh Energy Regulatory Commission (BERC). Mine inspectors must continuously inspect mining operations and audit HES plans.

Inspectors must ensure compliance & enforcement of approved plans & applicable codes

Dispute Resolution Board

NRB Professionals also suggested for constitution of a dispute resolution board to hear and resolve disputes amongst stakeholders, including affected community in mining area. In all mining operations some disputes always surface. Presence of a neutral dispute resolution board will act as confidence builder for all stake holders of mining activities.

NRB professionals also suggested strengthening capacity of DOE under Ministry of Environment and Forest. They suggested the following responsibilities for DOE.

DOE to develop the following footprint-plans & standards:

ü                   Environmental Quality Standards

ü                   Effluents and discharges

ü                   Dust & Noises

ü                   Erosion & Sedimentation Control

ü                   Rehabilitation & Resettlement

ü                   Reclamation

ü                   Indigenous Culture & Heritage

ü                   Health, environment & Safety

ü                   Other required standards to cover various aspects of mining

Mine developers would prepare detail plans based on foot print plans of DOE and submit these plans to BERC along with other documents for Mining Lease and Exploration License.

Resource Mobilization & Economic Issues:

NRBs identified relevant areas of mining which they thought would require mobilization of resources.

Financial Needs.

• Exploration   
•  Feasibility  Studies
•  Independent Detailed Cost Benefit Analysis
•  Land  Acquisition, Rehabilitation and Relocation , Mine Development
•  Mine Operations/Production
•  Mine Closure.
•  Education and training of mining professionals in BUET and other relevant institutions.
•  Creation of mining engineering Department in BUET
• Research & Development on mining techniques, Environment friendly  Utilization
•  Supporting Infrastructures.
•  Market Development /Power Plants.
•  Economic Zones (Mining City; Tourism, Fisheries)

 

SOURCES OF FINANCING

NRBs also suggested some sources of mobilizing finance. These were

• Government Financing
• Public Private Partnership (PPP)
•  Stock Exchange.
•  Development Partners.
• Bank Loans
• Leasing
•  Welfare Funds.
• Security Bond/ Environment Protection ( 2%).
• Exports.
• Investment from Non Resident Bangladeshis.(NRBs)

 

INCENTIVES (FOR FDI)

In group discussions it appeared that some incentives were required to be provide for attracting Foreign Direct Investments. These were

• VAT (Machinery, spare parts)
•  Tax Holiday
•  Convertible Currency .
•  Profit Uncapped with guarantee of a certain % Reinvestment.
•  Supporting Infrastructure.

 

Health, Safety & Environment (HSE) Issues

NRBs considered these to be key aspects in mining and subsequent coal transportation and processing operations. After extensive discussion the following were agreed.

A national standard needs to be developed under BERC on an urgent basis instead of referring to Equator Principle for coal mining.

            -Incorporate options for people to go to court

Details from the draft coal policy 2008:

NRBs also made certain other recommendations on different other provisions of draft coal policy.

 NRBs felt that higher royalty for coal in domestic market would impact on coal price to power generation and other use as developer would add this to cost of mining. 5% for underground mining and 6% for surface mining would be appropriate in the overall context of the coal sector development.

NRBs opined that policy must not deal with production capping. It must be left on market situation. Vigorous efforts must be made to expand coal use in domestic market. In special situation where local market can not absorb all coal produced in economic mining there must be provision for export citing situation of Barapukuria coal

Some NRBs termed it silly to import inferior quality Indian Coal (High Sulfur and ash). Bangladesh coal import provision restricts import of higher than 1% Sulfur coal .But year to year coal merchants get exemptions. Dirty coal banned from use in India is dumped into Bangladesh.

NRBs observed that there is a provision for Bond/security deposit of 2% of Estimated Cost of the Scheme for environmental protection. Considering the massive impacts NRBs suggested for increasing the proposed amount.

NRBs also suggested for establishing baseline data for pre mining water quality and management before approval of EIA.

In section 8.3 of Coal Policy, NRBs suggested to include local govt. representative in addition to the District Commissioner and nominated members of general population to form an independent, local committee to observe impacts on the environment and society from pre-mine survey to the last stages of mining.

NRBs also opined that,

•          In section 8.4.1, if there is Acid Mine Drainage (AMD), leasee should be responsible during the mining period and for 5 years after the mining is completed

•          Appendix cha (this covers issues of noise, health safety of mine workers, dust pollution, water management/subsidence issues) needs to be highlighted more in the environment section of the policy

–         In terms of water management, incorporate the reality of arsenic pollution in underground water tables

–         Incorporate MDG issues as appropriate

•          Highlight awareness raising of impacts of mining and rights of the population of the mine impacted area.

•          In terms of mining, incorporate consideration of environmental impacts of coal transportation via roads, railways, waterways. May need an independent EIA

Resettlement and Rehabilitation

NRBs deliberated extensively on Resettlement and Rehabilitaion issues. Sultana Nasrin and Ahsanul Kabir presented their thoughts on Data Base Creation with application of GIS and also development of Mine City with Modern amenities. Dr Sarwat Chowdhury shared views on Green City. However the agreed positions were

Database Development:

– Aerial Photo 

– S-LIS (Social and Land Information System)

 Identification of Important Feature and Structure

            – Archeological and Social

            – Preserve and restore them with the consultation from archeological department

Landuse Management Plan (for 30 years)

NRBs categorized the mine affected communities  under three categories and suggested specific compensation and income regeneration measures  for them.

Affected Stakeholders

1. Primary: compensation , rehabilitation, alternative livelihood, skill training

2.   Secondary: temporary compensation, training for alternative livelihood

3. Tertiary:  Subsidence compensation, health and environmental awareness. And provision for water supply if disrupted (quality and quantity).

 

Simple structure of Mining: NRBs stated that mining is a team work of several professionals. Battery limits are well established for all professionals

Geologist define the Geology and Shape of the Ore body (Coal), only Mining engineers define how to safely extract the coal deposit in most economical way (whether open cut, underground or both in combination), then when it leads to feasibility study, all departments gets involved in the project evaluation life cycle in defining the project (ie; all relevant engineers only in related to mining operations, town planners, hydro, environmental etc…) from all sectors of the mining operations.

Post Brainstorming Activities of Some NRBs:

Seminar held on 19^th June 2009

NRBs in brain storming did not recommend for any particular mining methods but discussed in-depth on all forms mining methods and associated impacts. It was agreed that mining methods would only be adopted after extensive feasibility study and on detail benefit cost analysis.

Conclusion:

The assembled professionals were told what to do and what not to in given circumstances in initial resource investigation, resource definition, data basing information, investigation for hydrology, geological , geophysical information, detail  feasibility study, HAZOP study, risk analysis for benefit cost analysis.

Mining techniques have evolved to such a level that even 100% resources can be accessed with appropriate equipment and facilities. Experienced miners always target maximum recovery and design mine to achieve that. All perceived impacts of any mining can be managed and professionally mitigated.

Bangladesh is suffering from the most severe energy crisis of its history.

Coal appears to be only viable fuel option for power generation at this stage in Bangladesh. Informed professionals wherever  should help policy makers to adopt investor friendly strategy to explore coal targeting maximum recovery with minimum impacts. Non miners must not deal with mining techniques.

A separate coal policy is not mandatory for coal mining. Existing minining act and Mine & Minerals rules are more than enough. However some essential elements as identified by NRBs may be incorporated in Mineral rules and updated. We have lost 4 years in brain storming on coal policy .As a nation we may become an object of ridicule if we fail to exploit our high quality coal with appropriate technology soon to confront energy crisis. Elected government must not hesitate to take decision .

NRBs pledged continued support to Bangladesh Energy Sector individually and as group whenever and wherever required.

Energy Bangla – Brainstroming

(dinajpurbd only disseminates  information, from what thought to be the relevant resources and do not part with the views expressed)

12.12.2009