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Dhaka Friday,  Mar 29, 2024

Asia Energy Plans To Pull Out

Govt in difficulty to scrap deal on Phulbari coal mine

Shahnaj Begum

The government does not have any short-cut option to stop the activities of Asia Energy, now renamed as Global Coal Management (GCM) in Phulbari of Dinajpur, unless it refunds the money the company has already invested to develop the coal mine, observed the Law Ministry.
The Law Ministry made the observation in a summary paper it has sent to the Energy Ministry as the ministry wanted Law Ministry’s opinion on the issue amid a plan to scrap the existing deal with the Asia Energy, said the Energy Ministry sources.
The Phulbari Coal Mine has a reserve of 572 million tonnes of high quality coal.
The coal mine project has remained stalled since strong protests by the local people in August 2006 that resulted in the deaths of six people in police firing in Dinajpur district.
Since then, the government has shelved the deal primarily to avert local protests but it did not cancel Asia Energy’s multi-billion dollar three-decade investment proposal although the residents of Phulbari staged demonstration in protest against the activities of GCM. They demanded closure of the Asia Energy’s office in Phulbari and Dhaka.
“Yes, we received the opinion of the Law Ministry in this regard, however, we are not working on this now,” State Minister for Power, Energy and Mineral Resources Nasrul Hamid told without elaborating.
“We sent the issue to the Law Ministry to examine its pros and cons and the terms of legality and validity of the deal signed between the government and Asia energy. However, they took a month to examine it and sent a summary paper to us without giving us any light in this regard,” a senior official of the Energy Ministry, preferring anonymity, said.
According to the Law Ministry, the Asia Energy under its deal with the government has obtained mining and exploration licences.
“Only two licences with the Asia energy were not a problem to scrap the deal. The most unfortunate part is that in the gazette, the Energy Ministry has added a single line in the Exploration License Part (which was not in the original one), where it said that if Asia Energy finds good result and submits a world class EIA report of this project then they would get the first chance for mining,” the official said.
The Law ministry’s findings said that the Asia Energy had spent US $10 million for EIA and got all of its expenditures audited by a world class firm, which showed that the company invested around US $50 million in Bangladesh.
“If Bangladesh government wants to scrap the deal then it needs to settle the monetary issue first,” a Law Ministry official said.
Meanwhile, it was learnt that amid resistance to its proposed open pit mining project at Phulbari, Asia Energy Corporation, Bangladesh subsidiary of the UK-based GCM Resources, plans to sell its property to others and wrap up its business here.
“A Chinese company has showed interest in purchasing the licenses but that is yet to happen,” said an official of the Energy Ministry.
According to the EIA report of Asia Energy, about 40,000 people will be relocated and 5,933 hectares of land will be directly affected, of which around 4,000 hectares are agricultural land.
The National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, an activist organisation, has joined local protesters for the last few years against Asia Energy’s bid to conduct open pit mining at Phulbari coal mine.
“We are yet to take decision on whether the Asia Energy will stay or not,” Secretary of Energy and Mineral Resources Division Md Abu Bakar Siddique said.
“Capitalised project-related expenditure during the year was £0.8 million compared to £1.9 million in the last financial year. Whilst reducing costs has been a key focus for the company, we have also ensured that the necessary expertise and resources are in place to continue pursuing project approval,” an official of GCM said.
However, the official said that they (GCM) are still awaiting project approval.

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