Frequently Asked Questions (FAQ)

Phulbari is the largest proven coal resource in Bangladesh. Extensive geological study established 572 million tonnes (JORC compliant) of world class coal resource with 475 million tonnes open pit mineable reserve (over 83% recovery). The coal seams lie at a depth of 150–270 meters (492–886 feet). There are 5 coal seams in total, but two major coal seams lie closer depth (Upper and Main) account for more than 90 percent of the deposit. The average seam thickness is 38 meters. Coal will be extracted using very efficient open pit mining method, that will allow higher recovery (Over 83%). Besides coal, the open pit mining process will also yield valuable industrial co-products from the overburden materials, such as kaolin clay, high-grade silica and construction sand which has huge demand in the market. The annual production capacity of Phulbari open pit mine is 15.2 million tonnes — reliably meeting about 60% of the country’s current coal demand. Coal will be extracted from the Phulbari mine for 35+ years.

The decision of mining method is very much site-specific and various issues including geological setup, location and depth of coal seam, nature of overlying rock layers and water bearing layer, number of coal seams and thickness, resource extraction, mine and labour safety, financial viability dictate the method of extraction of coal. The feasibility study conducted in Phulbari project area has established that open pit mining method is the best option in terms of geological, economic, social and environmental consideration. Development of underground mine like Barapukuria will not be appropriate for any consideration including resource extraction, mine and labour safety. The present method would allow extraction of only 25-30 million tonnes (less than 10%) of coal out of 410 million tonnes at Barapukuria where 475 million tonnes (over 83%) would be extracted out of 572 million tonnes coal at Phulbari. The annual production capacity is also much higher. While Barapukuria underground mine production hardly reaches 1 million tonnes over its 20+ years mine life and struggling to feed only nearby 525 MW mine-mouth power plants, Phulbari open pit mine would produce 15.2 million tonnes annually, enough to meet 60% of country’s current thermal coal demand. In addition, open pit mining would allow extraction of some potential co-products like glass sand, kaolin, gravels etc. In addition to poor resource recovery, production cost in underground mining is relatively much higher which would make the product commercially unattractive.

The quality of the coal of northern region is generally very high. This is bituminous type black coal, which has high calorific value (on average 6600 kcal/kg), low ash (12-15%) and low sulfer (less than 1%). The coal quality is comparable or even better than to any premium quality thermal coal traded internationally.

Worldwide coal is the most affordable and reliable fuel for baseload power generation. Coal supports about 36% of global electricity generation; 70% of global steel production is dependent on coal. Coal use for power generation was very limited in Bangladesh till 2018 (only about 3%) but gets a boost since 2020 once large new coal-fired power plants started coming into operation. Coal power now accounts for about 23% of total installed capacity. The new generation capacity (over 7,000 MW) is fully import dependent, requiring import of some 25 million tonnes of coal annually. Coal is now an important primary fuel source for Bangladesh other than domestic natural gas, which is in rapid declining state. Coal has use in thousands of brick kilns and some small-scale industries which is also import dependent. Phulbari coal at its full capacity can meet about 60% of country’s thermal coal demand with reliability of supply and assurance of quality, saving US$3-4 billion annually. Only Phulbari coal can support generation of 6,600 MW base load power for Bangladesh. Moreover, imported coal is generally poor in quality, low energy (4,000-5,000 kcal/kg GAR), requiring 25-30% more coal than Phulbari for same MW of power generation. Proposed mine-mouth at Phulbari can provide power at affordable cost for the people of Bangladesh.

Yes, Asia Energy has a Contract with the Government `for exploration and mining of coal in Northern Bangladesh’.

Open pit mining is a `temporary change of land use’, not any permanent loss of land and the process is slow and progressive. Phulbari open pit mine operation moves slowly in stages, advancing from north to south at a rate of about 200 meters per year. Over its 35+ year mine life a total of 5,192 hectares of land will be required. However, at no stage of mine development will more than 2,000 hectares of land be required at once. After coal extraction, land will be progressively backfilled and rehabilitated and returned to productive use, including agriculture. As a result, a significant amount of land — both unused land before mine development and land rehabilitated after coal extraction — will be available for agricultural and other uses. Unlike underground mining, Phulbari open pit mine development will not cause land subsidence. It should further be noted that, of the total of 5,192 hectares, 1,034 hectares will be used as a ‘buffer area’ between the mine and surrounding settlements, where noise-barrier embankments with thick greenery will be built and agricultural and other non-intrusive activities can take place. In other words, about 20% of the total mine area will be used for non-mining purposes. The final landform of the mine footprint area after coal extraction and rehabilitation will be a balanced mix of agriculture, forest, waterbodies and settlements.

Families living in the mine area will be relocated within the Project-prepared resettlement areas equipped with modern amenities. However, relocation to the resettlement areas will not happen all at once; it will take place in 6 different phases over 12–15 years, in line with the mine development schedules. In the first 3 years of mine development, the number of resettled families (HHs) will be approximately 2,600. According to the resettlement survey conducted under the Project’s feasibility study, and subsequent checking, the total population living in the mine footprint area is approximately 40,000 people.

At first, Asia Energy’s own commitment and social and environmental responsibility. Asia Energy will implement the project over a long period of time (35+ years) and will be with the local community; therefore, it would not be possible to implement the project without ensuring benefits of the local people. The international organizations who will play role in financing the project will monitor the activities of Asia Energy and Asia Energy is also committed to them to perform all the activities properly. Otherwise, financing will be stopped that would lead to closure of the project which is not desirable to anybody. Moreover, there will be neutral and independent monitoring system during the implementation phase of the project. Relevant government offices and local people, NGOs, or other organizations will also have access in monitoring mining activities. Asia Energy always welcomes suggestions and assistance to make its operation proper and accountable.

Asia Energy is committed to developing the Phulbari mine in line with best international standards and guidelines for managing environmental and social impacts within acceptable level. Measures will be taken to mitigate and manage impacts, and where possible to enhance the environment by, for example, providing clean water pumped from the mine area for farm irrigation and for town and village supply, injecting water to underground aquifer and by reforesting and replanting land as the mine pit is backfilled. A wastewater treatment facility will be established and all wastewater generated from mine operation will be collected, treated and preferentially be reused onsite. No water will be realised to neighbouring waterbodies without meeting national and international discharge standards. There will be an extensive monitoring system for all environmental parameters including air, water, noise etc. in place and provision of regular independent review and disclosure.

There might be some difficulties on availability through habitual practices, but there will be no scarcity of water. Extracted water from the mine area will be provided for domestic and irrigation purposes like many open pit mines in the world. In addition, water will be injected into the underground aquifer to limit lowering of water table away from the mine footprint and maintain natural level outside the mine impacted areas. It is a world recognized mine water management system. Fresh water will also be discharged to neighbouring waterbodies to maintain and improve downstream flow regime and aquatic environment. In other words, people will have better access to water for all uses, including piped water supply system for domestic purposes.

The Phulbari Coal Project will transform Northwest Bangladesh into a mining, industrial and power generating region, bringing new wealth, employment and opportunities to a predominantly subsistence based agricultural economy. Asia Energy has prepared a Resettlement and Rehabilitation Plan following international best practices to protect the rights of the affected people. The company will work consistently with the affected community to restore and improve their livelihoods, and a full-fledged livelihood restoration program has been developed. Key livelihood restoration measures are: Social Investment Fund to promote and support livelihood diversification and improvement initiatives 20,000+ new jobs (direct and indirect) new jobs in the mine and associated activities. Appropriate skill development training to prepare people for the job A preferential employment strategy to ensure maximum job placement of project affected people Support including access to credit and training for new businesses and expansion of existing businesses Free round-the-year irrigation water, training, agricultural inputs, technical know-how and cultivation methods to make agriculture productive and commercially viable livelihood alternative Financial assistance to support temporary disruption of livelihood activities

Affected people will get priority in employment in the mine and associated activities. A preferential employment strategy has been developed for the Project to maximise employment from the affected people. There will be training and skill development programs to prepare people for the mining and associated jobs.

The Project will create 20,000+ (direct and indirect) new jobs in the mine and associated industries. Moreover, development of the mine will spawn support industries, which will spur local and regional economic growth and create more spin-off jobs.

Asia Energy during 2-year long feasibility study extensively engaged with local community; shared project related information through various media including group discussion/consultation, leaflets/video CD distribution. An information centre was also opened in the Project area to give people easy access to project information. There will be further information dissemination program prior to project implementation. Affected people will get specific information regarding their compensation package much earlier of their displacement and no one will be displaced without having proper compensation, rehabilitation measures including a place to move (housing). An ‘Entitlement Card’ will be issued to each affected family containing the necessary information on compensation and resettlement measures.

Yes, the problem prevails in many indigenous/ethnic minority households as well as among many Bengali households. But people irrespective of their land title have been considered as project affected people and will be entitled for proper compensation and rehabilitation measures. Asia Energy also recognises the customary right of ethnic minority people to their land and assets and compensation and rehabilitation measures will be provided accordingly. A separate Indigenous People’s Development Plan has been developed (first of its kind in Bangladesh) with the aim to take proper care of this vulnerable community.

Agriculture will remain the key livelihood activity in the project area. As Project land use will be in phases, always there will be considerable amount of land available for agricultural purposes. An independent study demonstrates that intensive cultivation and application of improved farming methods will restore initial loss of agricultural production in the area and will be increased further if this trend continues. Project will adopt a set of measures to ensure sustainability of improved farming practices and to achieve higher agricultural production than pre-project time. Farmers will enjoy abundant free water irrigation round the year; and support with training, agricultural inputs, technical know-how, cultivation methods and marketing.

Royalty is a form of tax, special to mining industry that gives the producer of the mineral for the right to mine. The Mines and Minerals Rules (amended) set the coal royalty rate for mining and is broadly in line with the rest of the mining world. But royalty is only a part of overall financial benefits to the country. Other major sources of revenue to the country include – corporate tax, import duties, withholding tax on dividends, freight charges, port duties etc. The net earnings of the country will be more than US$15 billion over the life of the mine. It is worth mentioning that there is no provision of cost recovery in this Project like oil-gas sector projects and all the financial liabilities lie on the project proponent. The Project will give the country a reliable alternative source of primary energy that potentially meets ~60% of country’s thermal coal demand and saves approximately US$2.5 billion annually. Import dependence will fall and the country’s energy security will improve. The Project will help developing an economically poor region of the country into a mining and industrially developed region. It is not only a mine, an `opportunity’ that will help to make a major positive transformation of socio-economic condition of the country. Economic analysis estimates the Project would generate 1% GDP every year for the mine’s Life.

The royalty rate of 6%, as set out in the existing Mines and Minerals Rules, is broadly in line with the rest of the mining world. But royalty is only a small part of overall financial benefits to the country. Additional benefits include corporate tax (45%), import duties (2.5%), withholding tax on dividend (5%), freight charges, port duties etc. The net earnings of the country will be more than US$8 billion over the life of the mine. It is worth mentioning that there is no provision of cost recovery in this Project like oil-gas sector projects and all the financial liabilities lie on the project proponent.

The Phulbari coal mine is fully private funded project (FDI). As with the oil and gas sectors, the government bears no direct financial liability for developing and operating this mine. However, expediting the relevant government processes for the Project’s land acquisition, along with the government’s active participation and support, is essential for smooth operation of the mine. The overall life-cycle investment (development and operating costs) will run to approximately US$16 billion. Phulbari is the only mining project in the country ready for immediate development. First coal is planned to be produced within 15–18 months of the start of mine development activities.

The potential impacts of mining operation on water resources have been carefully assessed, and an extensive water management plan has been developed which has undergone independent expert review. Asia Energy is committed to ensuring that the water issues are well managed and there is abundant water for every household, business and for every farmer throughout the life of the Project and afterwards, and no one suffers from shortage of water. The comprehensive Water Management Plan includes: Aquifer injection, a proven water management technique to maintain the water table and thus restrict the drawdown to the near vicinity of the project area Round the year free irrigation water will be made available to affected farmlands. An extensive network of distribution channels will be established for efficient delivery. A piped reticulation system will be developed to deliver water to affected villages/households and community places for domestic uses Excess clean water will be released in the water courses to maintain natural flow regime to the downstream The dewatering and injection production system incorporates extensive performance monitoring with provisions for on-going adjustments