The news captioned “Coal exploration deals with Asia Energy anti-state, says energy advisor” published in the national dailies on 17th March, 2006 has drawn my attention.

The statement that the 1995 deal with BHP was Asia Energy style agreement has failed to protect the country’s interest is not a fact.

The fact is that a “Contract no 11/C-94 between the Government of the Peoples Republic of Bangladesh and BHP Minerals International Exploration Inc. for exploration and mining of coal in northern Bangladesh was signed on the 20th August, 1994, and that of the Assignment Agreement of Exploration Licenses ( rule-13 of the Mines and Minerals Rules, 1968) was made on the 11th February, 1998 while BHP Mineral International Exploration Inc. herein after called the Licensee desired to assigns the licenses issued on the basis of the agreement between GOB and the Licenses with prior approval and necessary vetting from the Government. In the Assignment Agreement both parties agreed upon the terms and conditions and the Contract no 11/C-94, and was annexed to the agreement (on 11 February, 1998).

In the agreement it is stated as some of the clauses as -

Lessee to Supply Mineral to Plant, Smelter or Factories (Mandatory arrangement or regular supply of coal by the lessee as and when the Government or any organization sponsored by the Government set up a plant or smelter or factory)

Government’s First Option to Purchase (Mandatory notice of the planned commencement of coal production to GOB and the Government shall have the first option for ninety (90) days from such notice to elect to purchase such coal or a portion thereof)

In addition it is agreed in Assignment Agreement that the Assignee (AEC) shall comply with the provisions of the Mines and Minerals Rule 1968 (as amended from time to time) and other applicable laws of the land.

Some provisions in the Mines and Minerals Rules through which the interest of the country can be protected which has been described below:

Checking measures (The Director (GOB) may prescribe measures to cheek production and transportation of minerals and the lessee (now AEC) shall follow the measures and the procedures as in rule 51(1)).

Non-conservational mining activities are undertaken by the lessee in respect of the area or part of the area jeopardizing the conservation of mineral wealth, the Director (GOB) shall stop the work, rule 52).

Directions (Director is discharging his functions shall be guided on question of policy by such director as the Government may, from time to time give rule 59).

The Assignment Agreement was made by the Government where as Mr. Grant Quinn, Manager, World Coal, BHP Minerals as witness, based on Article 143 (1) and Article 55 (6) of the constitution, Rules of Business and its Allocation of Business, the Act and the Mines and Minerals Rules.

BHP agreement for exploration and mining of coal in northern Bangladesh was the outcome of a multidisciplinary negotiation involving all relevant ministries, divisions and departments of the Government since1986 till 1994.

It may be mentioned that GOB tried to attract international investment for exploration and development of coal in Bangladesh, Such invitations to potential investor were published in ‘Far Eastern Economic Review’ and ‘the Economist’ in 1993.

The terms of the Contract with BHP Minerals were approved by the Cabinet of ministers on the 31st January, 1994 which was later assigned to Asia Energy Corporation (Bangladesh) Pty Ltd, AEC – a Subsidiary of Asia Energy Corporation Pty Ltd.

Hence such sweeping remarks neglecting rule 59 of the Mines and Mineral Rules at present youthful stage of Mineral Sector made by the Energy Advisor being such Govt. high official and attains relevant national responsibility and without knowing the background of growth of geology in the country, with apparently lack of knowledge on stratigraphical Lexicon of Bangladesh subsurface geology and overall on future Mineral Directions of Bangladesh may jeopardize the interest of the country and its involvement of foreign investments and technology needed in Mineral Sector.

No doubt it is a “bad message” or “wrong signal” in Mineral sector of Bangladesh today or tomorrow.

M. Muminullah: Former Director, Bureau of Mineral Development (BMD)