Asia Energy links viability of Phulbari project to coal export
Saturday, 1 December 2007
Asia Energy Corporation Friday said the Phulbari coal mine project is unlikely to be economically viable if the government does not allow coal export, reports UNB. Gary Lye, the Chief Executive Officer (CEO) of the UK-based company, made the observation while making a presentation on its views about Bangladesh's overall coal sector and its Phulbari coal mine project before the Coal Policy Review Committee.
He said the project should be allowed to export coal for its debt servicing since foreign financing is involved in it. "Otherwise, no foreign financier will be interested to come forward to finance the project where coal market is not available," he said.
After the meeting, Chairman of the Coal Policy Review Committee Prof
Abdul Matin Patwari said the present committee is not favouring coal export considering the future power generation needs and energy security."Because, the country will need 75 million tonnes a year to generate 32,000 MW of power from coal by 2025, he said adding that the royalty issue is yet to be settled.
Gary said Asia Energy would annually produce 15 million tonnes of coal from the 35-year project. During the period, the domestic consumption will be 3.0 million tonnes a year while there will be no available market for the remaining 12 million tonnes.
"Any surplus to domestic consumption must be sold off to maintain the project's viability. The earnings from this surplus will help service its foreign currency cost and debt…", he added. He, however, said there will be no need for export if the government can ensure available market for coal.
He also said Asia Energy would work with the government to build an initial 1000 MW coal-fired mine mouth power station for electricity supply to the northern region.
The project's net cost would be US$ 9.5 billion over its 35 years lifetime, while the start-up capital requirement will be US$ 1 billion, he mentioned.
In return, he claimed, the project will generate sizeable revenues for the government, both direct and indirect. As per the scheme development plan, the average coal price will be US$ 50 per tonne, helping the government earn a total of US$ 7.07 billion. Of this, the government will get US$ 4.43 billion as corporate tax, royalty payments, customs duties and income tax on employees' wages, while Bangladesh Railway and Mongla Port Authority will get US$ 2.64 billion.
To implement the project, Asia Energy will resettle 40,000 people, including 2,300 indigenous, through rehabilitation. The project will create about 2,100 jobs directly and 12,000 indirectly, the Asia Energy CEO said.
He said the project should be allowed to export coal for its debt servicing since foreign financing is involved in it. "Otherwise, no foreign financier will be interested to come forward to finance the project where coal market is not available," he said.
After the meeting, Chairman of the Coal Policy Review Committee Prof
Abdul Matin Patwari said the present committee is not favouring coal export considering the future power generation needs and energy security."Because, the country will need 75 million tonnes a year to generate 32,000 MW of power from coal by 2025, he said adding that the royalty issue is yet to be settled.
Gary said Asia Energy would annually produce 15 million tonnes of coal from the 35-year project. During the period, the domestic consumption will be 3.0 million tonnes a year while there will be no available market for the remaining 12 million tonnes.
"Any surplus to domestic consumption must be sold off to maintain the project's viability. The earnings from this surplus will help service its foreign currency cost and debt…", he added. He, however, said there will be no need for export if the government can ensure available market for coal.
He also said Asia Energy would work with the government to build an initial 1000 MW coal-fired mine mouth power station for electricity supply to the northern region.
The project's net cost would be US$ 9.5 billion over its 35 years lifetime, while the start-up capital requirement will be US$ 1 billion, he mentioned.
In return, he claimed, the project will generate sizeable revenues for the government, both direct and indirect. As per the scheme development plan, the average coal price will be US$ 50 per tonne, helping the government earn a total of US$ 7.07 billion. Of this, the government will get US$ 4.43 billion as corporate tax, royalty payments, customs duties and income tax on employees' wages, while Bangladesh Railway and Mongla Port Authority will get US$ 2.64 billion.
To implement the project, Asia Energy will resettle 40,000 people, including 2,300 indigenous, through rehabilitation. The project will create about 2,100 jobs directly and 12,000 indirectly, the Asia Energy CEO said.