EMRD seeks law ministry's opinion on Asia Energy investment offer

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FE Report
The Energy and Mineral Resources Division (EMRD) has sought further clarification from the law ministry over the investment proposal of the UK-based Asia Energy involving US$ 2.5 billion to develop Phulbari coalmine in the country's northern Dinajpur.
"The law ministry in June last submitted its opinion regarding the EMRD's initial query over the proposed investment proposal of the Asia Energy, which has remained pending for government decision for over last two and half years," a senior law ministry official told the FE.
He said in its opinion the law ministry termed that there is no legal basis of the memorandum of understanding (MoU) signed between the 'National Committee to Protect Oil, Gas, Electricity and Port' and the then Rajshahi City Corporation (RCC) Mayor Mizanur Rahman Minu on August 30, 2006.
The agreement was signed to appease the mob that were protesting the killing of their fellow demonstrators at Phulbari.
In the latest queries the EMRD sought the law ministry's opinion over the recommendations of the technical expert committee constituted to scrutinise the scheme of development and the feasibility study conducted by the Asia Energy.
Besides, the EMRD sought further clarification on the MoU signed between the said committee and the RCC mayor.
The UK-based Asia Energy Corporation (Bangladesh) Pty Ltd submitted the feasibility study and scheme of development report involving its $ 2.5 billion investment plan over the next 30 years to the Board of Investment (BoI) in October 2005.
It also submitted a plan to install a 500mega-watt (MW) coal-fired power plant at the mine mouth.
Regarding investment in Bangladesh, Asia Energy feels that it has already obtained mining authority at Phulbari under the provisions of agreement signed between the government and its predecessor Australia-based Broken Hill Proprietor (BHP) in 1994, said sources.
The BHP handed over its assets and liabilities to Asia Energy in 1998.
During the signing of initial contract there was a provision to allow the company start developing the coalmine within 90 days of seeking such approval, company sources said.
But the government now prefers to provide formal approval of coal mining under a new coal policy, a senior official of the ministry of power, energy and mineral resources (MPEMR) said.
Though the draft coal policy was prepared about two years ago it is yet to get the approval of the cabinet committee, sources added.
Sources said Asia Energy has already invested $18 million on feasibility study before submission of its coalmine development plan to prove the resource reserve of 572 million tonnes at Phulbari in the Northwestern Dinajpur.
In its 600-page scheme of development report the company intended to initiate mining operations in late 2006 with extraction of first coal within 2006.
In its scheme of development plan the company intended to produce 15 million tonnes per year of mostly export quality metallurgical and thermal coal per annum for 30 plus years when it goes into full production from the year 2013.
Of the total production, 12 million tons of coal would be exported of which 4.0 million tonnes to India by rail and 8.0 million tonnes by rail to Khulna and then by barge to a floating terminal of Akram point where it will be loaded onto seagoing ships for shipments abroad.
A total of 3.0 million tons of coal could be used locally, Asia Energy mentioned in its scheme of development to the BoI.
Asia Energy has already attained environmental clearance for open pit mining at Phulbari.
Bangladesh Department of Environment (DoE) approved the Environmental Impact Assessment for open pit mining on September 11, 2004.