Draft policy suggests equal use of coal for exports, power generation

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AZM Anas
An advisory committee, formed by the present caretaker administration, will meet today (Tuesday) to review the latest coal policy.
The eight-member committee headed by Abdul Motin Patwari, a former vice chancellor of Bangladesh University of Engineering and Technology (BUET), has been tasked with finalising the draft policy to the energy and mineral resources division .
"This will be the first meeting of the committee formed by the caretaker government to review the draft. The committee, however, passed its mandated timeline of July 21 for sending final recommendations to the energy division," a well-placed source said.
The draft policy, formulated by the energy division, will place top priority on ensuring the domestic energy security for at least 50 years and mainly rely on the public sector in coal-mine development.
"Excess coals exports may be allowed only after ensuring the energy security of the country for 50 years under the Coal Sector Master Plan," says the new version of the policy, sixth of its kind.
"The amount of coal exports should not exceed the use of minerals in the mandatory mine mouth power plants. The ratio of coal exports and coal use in power plants will be 1:1," adds the draft partially leaked to the FE.
The draft has also made it clear that national interest will be given the topmost priority while attracting foreign direct investments in the coal sector.
"The public sector will be given priority in the coal policy. However, the government can take decision in the coal mine development by the private sector to avert potential energy crisis and ensure energy security in future," the policy maintained.
The World Bank, in an analysis on the first draft, said the policy should allow coal exports from the outset and be made flexible enough to woo private investors in the development of coal mines.
Although the mining method remains the stickiest point in regulations, the draft policy does not provide any preferred method and gives the percentage of coal to be extracted from both open pit and underground mining.
In terms of open pit mining, the maximum coal recovery will be 1050 million tonnes accounting for 90 per cent and coal-fired power plants will be able to generate electricity upto 2033.
By contrast, only 20 per cent of coal can be recovered through underground mining, thereby meeting the electricity demand of the country upto 2022.
Given the energy security, the policy notes that private sector power generation must be encouraged as coal fired independent power producers (IPPs) to set up coal based power stations in the vicinity of coal mines.
"The IPPs will get similar treatment as per the Bangladesh Private Power Generation Policy (Amended) 2004," according to the policy.
As far as the government royalty is concerned, it suggested that a lessee pay the fees on a quarterly basis, either as cash or in the form of mineral itself.
The policy has set a number of targets to be chased between July 2007 and June 2010.
The formulation of a Coal Sector Master Plan, identification of coal zones and strengthening the public agencies such as the Geological Survey of Bangladesh and the Bureau of Mineral Resources are among the plans stipulated in the policy.
The immediate past BNP-led coalition government had initiated a move to frame the first ever coal policy and the revised it several times, but the issues of mining method, exports, royalty, environment and licensing regime stood in the way of its approval.
The present caretaker administration, in a circular issued on June 21, constituted an eight-member advisory committee to give recommendations on the draft coal policy after necessary examination and scrutiny.
The advisory committee was supposed to submit the final proposal to the energy division by July 21.
But it failed to comply with the deadline as set in the circular.
Bangladesh has an estimated 2221 million tonnes of proven coal reserves in five mines, including Barapukuria and Phulbari.