Page last updated at 09:39 GMT, Wednesday, 12 July 2006 10:39 UK

Bangladesh coal divides region

By James Melik
Business reporter, BBC World Service, Bangladesh

People standing against anti-mine graffiti in Phulbari in Bangladesh
Graffiti in the town of Phulbari expresses opposition to the mine

As Bangladesh businesses struggle to cope with acute electricity shortages, plans to ensure energy security for the future have been greeted with fear and riots by the inhabitants of Phulbari in the north west Dinajpur district.

London-based Asia Energy is planning to operate an open cast coal mine which will entail relocating an estimated 40,000 people from their homes.

The proposed mining area is the size of Manhattan and will affect more than 100 villages - among them communities of the Santal, Munda and Mahali tribes - and the destruction of acres of fertile agricultural land.

The mining firm has promised to compensate people for loss of land and businesses.

That might be good news for landowners but offers little to the people who work on the land, who claim they will see their homes, their heritage and their culture destroyed.

Restless souls

Coal under the ground is worth more than growing rice on the surface
Gary Lye, chief executiv, Asia Energy

If the mining project receives government approval, people will either be moved to host villages, or to new homes constructed in an expanded and modernised Phulbari.

One woman says she does not want to move and be treated like a foreigner in another village, whilst a 75-year-old man who has lived in the area all his life, says:

"What will happen to us if we are forced to move from here? What will happen to our livelihoods? I don't want us to live like this.

"Our mosques and holy places and the places we were born will be destroyed. What will happen to the graveyards of our ancestors?"

A local teacher is concerned about the project's impact on young people.

Young Bangladeshi men voice disapproval of mining project
Most young people do not want to take up the 3,000 jobs on offer

"Children and students don't really believe what they're being told by the mining company," he says.

"They know they're going to be relocated, dislocated and evicted, so they're worried about their fate."

Regional benefits

One young women says the mine is a good idea because it will create new jobs and she would consider going to work for the mining company.

A local politician, meanwhile, says the mine will be good for the region's economy and should attract other companies to invest in the area.

He adds that when farmers lose the use of the land, another job will be waiting for them in the mine.

But the mine will provide only 2,100 jobs whilst it is being constructed, and 1,100 long term positions.

Gary Lye, chief executive of the mining company Asia Energy, says the region will be better off in the long term.

"At the moment farmers in the area cannot afford to do what they are doing now.

"A fact of life is, the coal under the ground is worth much more to everybody than growing rice on the surface," he says.

Woman gathering hay in Phulbari - Bangladesh
Villagers have rioted because energy is diverted to towns

Apart from coal, the mine will also provide co-products such as kaolin, clay, sand, rock and aggregate, which can be put to productive use.

During the 30-year expected life span of the mine, the land will be re-filled as the open pit moves forward, and revert back to agricultural use.

And a huge artificial lake will remain when the mine's supply of coal has been exhausted.

The company says the lake will be clean and could be used as a safe water supply or for irrigation and fishing.

As if to emphasise the energy problems facing the country, the electricity failed twice whilst Mr Lye was explaining his company's plan and emergency generators had to be switched on.

Bio-diversity concerns

The mine will undoubtedly transform the environment.

Waste minerals will be dumped beside the pit and a 500 megawatt power station is envisaged to produce electricity.

But Anu Muhammad, economics professor at Jahangirnagar University, is not convinced the benefits outweigh social and environmental concerns.

Studies in open pit mining in other countries, and particularly one from Pennsylvania in the United States, found that one river 160 kilometers from the pit was still poisoned three decades later.

Coal will bring $21bn to Bangladesh over 30 years and add one per cent to GDP
Asia Energy study

"In a country like Bangladesh, with hundreds of small rivers linked like a huge net, polluted water can travel long beyond the mining area," he says.

He is also concerned that a feasibility study was not done by an independent body.

Asia Energy says 80% of visitors to its information centre in Phulbari have been positive about the proposals.

That figure contradicts Professor Anu's own findings, which show only 2% - usually local government officials who will get compensation, are actually in favour of the mine.

Power for profit

Some of Phulbari's coal will be kept back for use in Bangladesh, replacing several millions of tonnes a year currently imported from India.

However, two-thirds of the coal from the Phulbari mine will be sold abroad.

According to a report by the mining company, this will benefit the Bangladeshi economy by $21 billion over 30 years and add one per cent to gross domestic product.

Asia Energy's Gary Lye says there is no point in building the mine unless the majority of the coal is exported.

Man carrying bundles of rice across a paddy field
The area contains fertile land producing three rice crops a year

"If you want to have a sustainable new regime of energy development in the country though coal, it has to be economic," he says.

Professor Anu acknowledges that Bangladesh needs energy, needs a coal mine and needs electricity.

He is concerned, however, that coal is a non-renewable energy source and that if it stayed in the country, it would serve the population for 50 or 100 years, rather than the expected 30-year life span Asia Energy is proposing.

Since acquiring the mining rights from BHP Billington, Asia Energy has spent $20m in exploration and preparation costs and is anxious to get permission to proceed.

The government of Bangladesh is set to make a decision within a few months.

But with an election looming, opponents to the scheme are worried it might give its approval without due consideration to the cultural and environmental impact the mine will have on the area.

With the country's own supply of natural gas dwindling and worldwide oil prices rising, coal may seem an attractive solution in a country where fewer than one in four people have regular supplies of electricity.

Bangladesh power deal in balance
08 Feb 06 |  Business
Dhaka seeks $650m from gas losses
16 Feb 05 |  South Asia
Bangladesh secures power loan
18 Dec 01 |  Business
Dung heats chilly Bangladesh
07 Jan 03 |  South Asia

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific