Bangladesh: Phulbari coal mine – “losses beyond compensation”

2 Apr

A UK company is planning to build a huge coal mine in Bangladesh. The impacts would be devastating. The Asian Development Bank is considering supporting the project anyway.

By Chris Lang. Published in WRM Bulletin no. 128, March 2008.




The proposed Phulbari open pit coal mine in Bangladesh would divert a river, suck an aquifer dry for 30 years and evict thousands of people from their homes. Vast machines would dig a series of holes 300 metres deep over a total area of 59 square kilometres. The coal would be largely exported via a railway and port in the Sundarbans, the world’s largest mangrove forest.[1]

The company behind the US$1.4 billion scheme,[2] Asia Energy Corporation (Bangladesh), is a wholly owned subsidiary of a UK company, Global Coal Management Resources. The largest shareholder in GCM Resources is RAB Capital, a London-based hedge fund manager. Other shareholders include UBS, Credit Suisse and Barclays.[3] In June 2008, the ADB’s board is scheduled to decide whether or not to provide a US$100 million loan and US$200 million political risk guarantee for the project.[4]

During an ADB mission to Bangladesh in October 2007, mission leader Kunio Senga told journalists that “coal mining is going to give huge potential benefit for power generation.” Senga added, “Coal mining is very effective.”[5]

The mine would displace 40,000 people according to Asia Energy. Activists state that the number of people affected could be more than ten times this figure.[6] “No matter wherever we are put, if we get evicted from our homes, we will lose our traditions, social organisation and businesses. These losses are beyond compensation,” Nima Banik, a lecturer at Phulbari Women’s Degree College told the Bangladesh NGO, Society for Environment and Human Development (SEHD).[7]

The mine would cause noise and dust pollution through dynamite explosion. More noise and dust will come from the trucks and trains that would haul the coal away from the mine. Coal dust will pollute the air. Water will be polluted from washing the coal, risking pollution of surrounding water bodies. Bangladesh has networks of hundreds of small rivers, meaning that water pollution in one area can spread over a large area.[8]

To prevent the mine from flooding, huge pumps would run 24 hours a day for the 30 years of the mining project, pumping up to 800 million litres of water a day out of the mine.[9] Groundwater in an area covering about 500 square kilometres would be lowered. Wells would no longer provide enough water for farmers. Asia Energy’s solution is to distribute the water pumped out to farmers. “It is an open question if the water distribution would be even-handed,” notes SEHD’s Philip Gain. Once the mining is finished, Asia Energy plans to create a huge lake, providing fresh water, fisheries and recreation, according to the company. But after 30 years of digging, the water will be toxic.[10]

Local opposition against the project is strong. In August 2006, about 80,000 people took part in protests against the mine. The paramilitary Bangladesh Rifles opened fire on the demonstration, killing five people and injuring hundreds. On 30 August 2006, the Rajshahi mayor, Mizanur Rahman, signed an agreement with the protesters on behalf of the government to kick Asia Energy out of the country and to ban open-pit mining in Bangladesh.[11] Well over a year later, the government has yet to scrap the deal with Asia Energy. Meanwhile the government is working on a coal policy which in its current draft form would allow open pit mining.[12]

Under the military government which declared emergency rule in January 2007, public protest is banned. Nevertheless, in December 2007, representatives of the sub-districts of Phulbari and neighbouring Birampur, Nababganj and Parbatipur wrote to the president and executive directors of the ADB. The project will “increase the poverty of the local population as well as cause environmental disaster,” they wrote.[13]

The Bangladesh government’s Department of the Environment has set up a Climate Change Cell. “Rapid global warming has caused fundamental changes to our climate. No country and people know this better than Bangladesh, where millions of people are already suffering,” states one of the Climate Change Cell’s documents. “Development must ensure reducing the risks posed by climate change to people’s lives and livelihoods,” it adds.[14]

The Climate Change Cell gets more than 90 per cent of its funding from the UK’s Department for International Development (DfID).[15] Nowhere in any of the documents on its website does Climate Change Cell mention Phulbari.[16] Yet the coal from the Phulbari coal mine, if it is extracted and burnt, will add a total of more than 1.2 billion tonnes of carbon dioxide to the atmosphere.[17]

Gordon Brown, the UK prime minister, claims to be concerned about climate change. At a recent meeting with Bangladesh’s interim head of government, Fakhruddin Ahmed, Brown promised that “Britain would continue to work closely with Bangladesh bilaterally and internationally to secure an effective response to combat climate change.”[18] The Phulbari coal mine makes a mockery of this statement.




References


[1] Philip Gain “Open Pit Mining for Coal: Horror Feeling Shrouds Northern Bangladesh” and “Killings in Phulbari Ignite Unstoppable Protest: Local Communities Stand Strong against Open Cut Mining“, Society for Environment and Human Development, no date.


[2] Bangladesh may re-open 1.4-billion-dollar mine deal talks“, AFP, 3 October 2007.


[3] Annual Report and Accounts 2007“, Global Coal Management Resources.


[4] BAN: PHULBARI COAL PROJECT : Bangladesh“, Asian Development Bank website.


[5] Asia Energy wants to renegotiate deal“, The Daily Star, 4 October 2007.


[6] Urgent Appeal by World Organization against Torture: Risk of Violent Suppression of Public Opposition to the Phulbari Coal Mine Project“, Phulbari Resistance, 22 December 2007.


[7] Philip Gain, “Killings in Phulbari Ignite Unstoppable Protest: Local Communities Stand Strong against Open Cut Mining“, Society for Environment and Human Development, no date.


[8] Anu Muhammad and SM Shaheedullah (2007) “Phulbari Day and the Coal Policy“, NewAge, 26 August 2007.


[9] Engr. A K M Shamsuddin (2007) “Phulbari Coal: Hydrogeological environment not favourable for open pit mining“, The Daily Star, 29 September 2007.


[10] Philip Gain, “Killings in Phulbari Ignite Unstoppable Protest: Local Communities Stand Strong against Open Cut Mining“, Society for Environment and Human Development, no date.


[11] No step yet to cancel deal with Asia Energy“, NewAge, 26 August 2007.


[12] Bangladesh: Resistance against coal open-pit mine in Phulbari“, WRM Bulletin no 126, January 2008.


[13] Urgent Appeal by World Organization against Torture: Risk of Violent Suppression of Public Opposition to the Phulbari Coal Mine Project“, Phulbari Resistance, 22 December 2007.


[14] From Vulnerability to Resilience: Bangladesh Preparing for Climate Resilient Development“, Climate Chang Cell, February 2008.


[15] Climate Change Cell . . factsheet“. The Climate Change Cell has a total budget of US$2.1 million of which US$1.9 million will come from DfID.


[16] I did a search on Google on 24 March 2008. The result: “Your search – Phulbari site:www.climatechangecell-bd.org – did not match any documents.”


[17] The coal mine at Phulbari would remove 15 million tonnes of coal a year for 30 years; a total of 450 million tonnes. One tonne of coal contains 746 kg carbon. The molecular weight of carbon dioxide is 3.667 times that of carbon: 450,000,000 x 0.746 x 3.667 = 1,231,011,900. (This calculation method came from George Monbiot’s article, “Rigged“, The Guardian, 11 December 2007, footnote 5.)


[18] Bangladesh, UK to begin ‘new strategic partnership’“, The Daily Star, 19 March 2008.

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26 Responses to “Bangladesh: Phulbari coal mine – “losses beyond compensation””

  1. Pete 3 April 2008 at 10:36 am #

    The World Development Movement are currently running an action against the Phulbari mine development, targeting the UK company involved Global Coal Management

    http://www.wdm.org.uk/campaigns/others/bangladeshmine/index.htm

  2. Chris Lang 3 April 2008 at 11:24 am #

    Thanks Pete. World Development Movement has a letter writing campaign. Write to Steve Bywater, chief executive of Global Coal Management demanding that his company pulls pull out of Phulbari:
    http://www.wdm.org.uk/campaigns/others/action/bangladeshmine.php

  3. Webmaster 3 April 2008 at 7:11 pm #

    Thank you Chris for this! We just posted the article on our site, with your photo :) take a look:

    http://banglapraxis.wordpress.com/

  4. Chris Lang 3 April 2008 at 7:58 pm #

    Thanks Zakir!

  5. Terrytibbz 6 April 2008 at 12:52 am #

    Phulbari is their only option for bridging the power deficit that is preventing further industrialisation of the entire country. Idiot liberals that enjoy living to high standards in the West are trying to prevent the Bangladeshies even having an adquate power supply without systematic load shedding.

  6. Webmaster 6 April 2008 at 8:14 am #

    The Director of the Asian Development Bank’s Private Sector Operations Department, Robert Bestani, notified the Bank’s Board last week that it will no longer ask for approval of the Phulbari Coal Project in Bangladesh. The ADB’s Board was slated to approve a US$ 100 mio. loan and US$ 200 mio. political risk guarantee for the project on June 3, 2008.

    http://banglapraxis.wordpress.com/2008/04/04/press-release-asian-development-bank-pulls-out-of-controversial-phulbari-coal-project-in-bangladesh/

    Plans by UK-quoted mining firm GCM Resources to develop a huge open-cast mine in northern Bangladesh have been thrown into doubt after the Asian Development Bank (ADB) pulled a $300m loan agreement this weekend.

    http://www.guardian.co.uk/business/2008/apr/06/mining.bangladesh

  7. Chris Lang 7 April 2008 at 1:00 pm #

    @Terrytibbz – thanks for the comment, but I’d suggest you should re-read the article. In August 2006, 80,000 people protested in Phulbari against the proposed coal mine. None of these people were “idiot liberals . . . in the West”, they were local people protesting against the destruction of their livelihoods that the coal mine would cause.

    “The area around Phulbari is extremely fertile and densely populated. It is also one of the few regions in Bangladesh that are safe from flooding and other natural catastrophes and therefore plays a key role for the food security of the entire country. The proposed ‘development’ project is merely a scheme to loot natural resources from a poor country for the rich. We will not allow GCM Resources to turn a land of food for the people into a black hole for corporate profit.” This quotation isn’t from an “idiot liberal . . . in the West”, it’s from Professor Anu Muhammed in Bangladesh.

  8. Terrytibbz 8 April 2008 at 3:30 pm #

    Some self-serving criminals who happened to be politicians (150 are being prescuted by the governemnt now) decided they wanted to try and tranfer Phulbari to some indian businessmen and make a large cut for themselves and staged riots with paid rioters and disinformation supplied to the locals. The former PM is being prosecuted for taking $30m for the Barapukuria farce. Yes the project will be disruptive, but the country has 150m people who are suffering from an inability to grow the economy due to the chronic power shortages (the government has had a power policy since 1995 that was never implemented). Also the government finances are under severe pressure as they need to subsidise a wide range of imports like coal, food etc. and in my opinion an IMF bailout is a possibility if things get worse in Bangladesh – and the IMF wont pussyfoot around on the necessary reforms in the country including commissioning Phulbari.

    I suggest you look into things in more detail before latching on to the most vocal anti development wind bags. I would say the vast bulk of the population are infavour of Phulbari and the 1000MW powerplant, subject to GCM working to best practice. In terms of ‘looting national resources’ they only know the coal is there because GCM found it and in the modern world we also have the concept of contract law and property rights which should be enforced.

  9. Chris Lang 10 April 2008 at 8:36 pm #

    @Terrytibbz – could you provide the names of the politicians who decided they wanted to transfer Phulbari to “some Indian businessmen”? And the names of the Indian businessmen, please?

    The people protesting in Phulbari continued to do so for several days after they had been shot at and several of them killed. It hardly seems likely that they would continue to protest if the protests were the result of “disinformation” and “paid rioters”.

    Unfortunately, a 1,000 MW coal-fired power plant will not grow food. Phulbari is in one of the few areas of the country that is safe from flooding, as Professor Anu Muhammed points out. Don’t the people who live there also have property rights – and the right to decide their own future and livelihoods?

    In your last comment, you accused “idiot liberals . . . in the West” of opposing the project. Now it’s “vocal anti development wind bags”. You might say that the “vast bulk of the population” is in favour of Phulbari, but what evidence do you have to back up this opinion? You mention “best practice”. Since when does digging a series of vast holes 300 metres deep, draining an aquifer, diverting a river and evicting several hundred thousand people have anything to do with “best practice”?

  10. Terrytibbz 11 April 2008 at 9:49 pm #

    Why dont you look at the bangladesh media? Even the newspapers who used to be against it, like The New Nation recognise the need for Phulbari and the power station.

    Well the ex-Prime Mininster is being prosecuted and pretty much everyone below that was on the take one way or another. You can phone Gary Lye of GCM Resources if you want more info.

    People have property rights until the government decides it needs the land – for instance if the UK government builds a motorway and confiscates the necessary land.

    Best practise mining should minimise avoidable social and environmental impact. However that isnt to say some impact wont be incurred in any case.

  11. terrytibbz 19 June 2008 at 11:04 pm #

    looks like coal is their only way out

    http://nation.ittefaq.com/issues/2008/06/19/news0800.htm

    Merchant power plant in pvt sector likely

    BSS, Dhaka

    Special Assistant to the Chief Adviser for Power, Energy and Mineral Resources Prof M Tamim on Wednesday said the government may open up the establishment of ‘merchant power plant’ by local and foreign investors under a new policy initiative.

    He said this while speaking as the chief guest at a seminar on ‘producers perspectives in the power sector and the government response’ organized by International Business Forum of Bangladesh at Sonargaon Hotel here.

    The new forum is engaged in advocacy work to highlight the business point of view of policy issues having bearing on trade and investment.

    President of the forum Mahmudul Islam Chowdhury was in the chair. Chairman of Petrobangla Jalal Ahmed, Chevron country president Steve Wilson, Cairn executive Ajay Nanbiar and executive director of Grameen Shakti Dr MS Islam also spoke on the occasion.

    Prof Tamim said investments of several thousand dollars have been made in the country, essentially in the private sector over the past 10 years, but the energy and power sectors remained starving from lack of investment.

    The country is facing acute energy shortage, especially shortfall in gas supply and power distribution, since no discovery of new gas field has taken place in the meantime. So also no significant progress in setting up adequate number of power plants took place in recent past.

    He said the government has opened the third round of gas block bidding to expedite the new gas field exploration and development in the country. “Presently we are very strongly going for new exploration,” he said.

    As regards improving the power supply situation, he said the government may also authorise joint ventures of local and foreign investors to set up ‘merchant power plants’.

    This policy is being worked out, he said adding the council of advisers is quite supportive of it. Under it, the government may allow parties to set up power plants; but it will neither take up the responsibility to supply gas to them nor commit to buy power from them.

    They can procure fuel or coal on their own to run the plants and negotiate power prices with buyers under the free market mechanism without any price ceiling. However, the government will allow them to use the national grid for electricity transmission and its distribution network to reach power to users under payment of certain wheeling charge.

    The government may also allow the old depleted power plants to be sold to local power producers only or to public and local private sector joint ventures. Under the new arrangement, they can renovate the plants and put them to working condition to take up power generation and supply on commercial basis.

    In this case, the government will ensure gas supply to them and commit to buy power from them, he said. Prof Tamim said time has come to slowly free the energy market to operate under a free market mechanism.

    Pointing to rapid growth in the demand for energy, he said, “We have now buyers in the market prepared to pay US$ 5 per thousand cubic feet of gas.” This is time also to move to the use of coal for power generation prioritizing the use of gas to fertiliser and industrial productivity, he added.

    Petrobangla Chairman Jalal Ahmed said his organisation has already asked the government to increase the gas prices so that it can save certain fund to make new investment in domestic gas exploration.

    Giving the price comparisons of gas in the domestic sector and that we pay to international oil companies (IOCs), he said it is time to make upward adjustment in the tariff rates to meet the increasing need of energy supply.

    Referring to a paradox, he said the government cannot abandon the poor to pay high cost of energy. “But it is equally true now that there are many wealthy people enjoying subsidized prices that we must discontinue now,” he said.

  12. aska 7 July 2008 at 10:31 pm #

    I dont understand why u do such an excitement about that. Im from East Germany and I have survived years of open pit coal mining here. The country needed the coal. Noone went to poverty and noone suffered hunger because of the coal mines.

    I ask my self wether some people want to block development where there is need for it, just to satisfy ther own interests of beeing human rights activist. From my point of view you are not interestet in the people, just in yourself, because you are against the use of ressources that are there.

  13. Chris Lang 30 July 2008 at 9:11 am #

    Dear Aska,

    Thanks for your comment. If local people were not protesting against the proposed coal mine then I might agree with you. However, the reality is that thousands of people’s livelihoods are at stake and they are opposing the coal mine. It’s a UK company that will benefit from extracting the coal, not the people of Bangladesh, which is why the World Development Movement also opposes the project.

    By the way, in June 2008, Barclays Bank sold its shares in Global Coal Management.

  14. Amar 30 July 2008 at 10:59 pm #

    This coal mine is definitely going ahead and now even the (future) politician understand that. The draft coal policy will be approved within few months (according to various reports). And yeah like others said, it doesn’t matter what 80,000 people think the rest of the 150 MILLION people in Bangladesh are for this project. There are way too many NGO and other organizations interfering with the development of Bangladesh no other country would stand for this. And Chris Lang if you have any idea on how to produce enough electricity to feed 150 MILLION people, please tell us.

  15. Amar 31 July 2008 at 2:56 am #

    You may like to take a look at the new coal policy when it comes out. But some basic point are that no coal will be exported, all will be used to generate power for Bangladesh. And a national public (state-owned) coal company will be formed where it will be the sole owner of all coal mines in Bangladesh and foreign companies will only have a scope to act as a minority partner in the mining process.

  16. Chris Lang 31 July 2008 at 9:54 am #

    Thanks for your comments, Amar. One of the problems with the Phulbari coal mine is the impact it would have on food production. As I mentioned previously (see comment 7 April 2008), Professor Anu Muhammed points out that “The area around Phulbari is extremely fertile and densely populated. It is also one of the few regions in Bangladesh that are safe from flooding and other natural catastrophes and therefore plays a key role for the food security of the entire country.”

    You ask me whether I know “how to produce enough electricity to feed 150 MILLION people”. Your question is interesting. Land is needed to produce food – not electricity. A few years ago, I spoke to villagers living in northeast Cambodia, downstream of the Yali Falls dam, in Vietnam. The dam destroyed fisheries downstream and caused flash floods which killed several people and drowned their animals. The villagers pointed out that they didn’t need electricity, they needed food, which would involve restoring the river to its previous condition. In the Phulbari area both rivers and land would be affected by the proposed coal mine.

    Why isn’t solar power an option in Bangladesh? This seems like a particularly good option considering that only 30 per cent of the population in Bangladesh has access to the national electricity grid.

  17. Amar 31 July 2008 at 2:53 pm #

    “Land is needed to produce food – not electricity.”

    -While that’s true, some 30 Million people (half of UK Population) just in North Bangladesh doesn’t have access to electricity; their kids can not study at night even for tests since kerosene is becoming increasingly expansive. Not to mention some 100 Million people doesn’t have electricity in the entire country and this is suppose to be the 21th century. Also it’s not like a big portion of the country’s fertile land is being diverted to coal mining. In fact Phulbari is just .000004% of the total fertile land and the food produced from this area is negligible when compared to the total national food output. That small amount to food can be imported from elsewhere. The benefit to provide electricity to the 30 million North Bangladesh outweighs any hindrance that may arise from coal mining.

    -And as for solar panel, even if you kick out the entire population of Bangladesh (150 Million) and blanket cover the entire country with solar panel it still would not provide the require electricity for current use; not to mention the future electricity requirement. And yeah same disappointing results with wind power too.

    -We as a nation don’t want to earn $550 per YEAR per person (equivalent to what people in the UK makes in a week). We also want to live like an average human being, have electricity and make reasonable amount of money per year and the only way to do that is by industrialization, Farming by no mean can provide jobs to some extra 50 million people by 2025. I sincerely hope you can understand what a difficult position we are in; You cant just look at a situation one-sided or in the shot-term, you must look at the bigger picture.

    -And on the side note I am curious what your NGO and others alike are going to do when Bangladesh goes for nuclear power (which is slated to go online by 2015).

    http://news.xinhuanet.com/english/2007-12/25/content_7309462.htm

  18. Chris Lang 3 September 2008 at 10:34 am #

    Thanks again for your comments, Amar. I agree with some of what you say and disagree with other parts.

    The 100 million people who don’t have electricity are not going to benefit from a coal power station, for the simple reason that they are not connected to the national grid. Which is why solar power for individual users might be a better solution for these people.

    I disagree that you can simply kick people off their land and destroy their livelihoods for the benefit of others – particularly when those others won’t be benefiting in any case, because they aren’t connected to the national grid.

    I appreciate your comments about the amount of money people earn in Bangladesh and that people in Bangladesh have just as much right to “development” as anyone else. I would also say that the same argument applies to people living in Phulbari.

    I’m opposed to nuclear power, since you ask, because the industry is linked to the production of nuclear weapons, because there is still no safe way of storing nuclear waste, because of the impacts of mining uranium and because nuclear power stations are extremely risky (8,000 gallons of uranium contaminated water recently spilled from the Tricastin nuclear site at Bollene in the south of France, for example).

    • sc 9 June 2009 at 5:54 am #

      Dear Chris, Thanks for posting your replies. Most helpful. Costs of solar power remains a major barrier, wish there were cost-effective and short-term alternatives to fossil fuels to meet the unmet energy demand.

  19. chris 30 June 2009 at 1:31 pm #

    HI JUST THINK SOMETIME YOU HAVE TO DO SOME SACRIFICE FOR THE SAKE OF YOUR COUNTRY

  20. chris 30 June 2009 at 1:33 pm #

    THINK THE PHULBARI COAL MINE IS JUST THE BEST AND ONLY SOLUTION

Trackbacks/Pingbacks

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  5. Bangladesh-Diary | Bangladesh: Phulbari coal mine – “losses beyond compensation” - 16 May 2012

    [...] [10] Philip Gain, “Killings in Phulbari Ignite Unstoppable Protest: Local Communities Stand Strong against Open Cut Mining“, Society for Environment and Human Development, no date. [...]

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