Energy & Mineral Resources Division (EMRD) of the Ministry of Power, Energy & Mineral Resources (MOEMR) entrusted the task of formulating Coal Policy for Bangladesh upon Infrastructure Investment Facilitation Centre (IIFC). They have accomplished their primary task and had let out the draft Coal Policy on website seeking email comments in an effort to supplement and refine the draft. The revised draft policy has been circulated among EMRD and other related agencies for comments and opinions for incorporation in the draft policy.

The latest version of the draft policy (version-2) is to be circulated among the civil society, academia and other ministries, inviting them to a workshop. IIFC will organize the workshop, receive, review and collate all the comments arising from workshop and incorporate in the revised coal policy (version-3). The draft policy will then be circulated among potential coal investors, business leaders, chambers of commerce inviting them to a second workshop. IIFC will receive, review and collate all the comments arising from the workshop and incorporate them into another revision of draft coal policy (version-4).

IIFC will circulate version-4 among various agencies of EMRD for final opinion and comments which upon review would form the part of version-5 of the draft coal policy. EMRD will process the draft for approval of relevant authority.

Given the political reality, bureaucracy, very limited hands on experience and exposure to coal industry and business EMRD will be very lucky to formulate and place the draft policy for approval during the currency of present government.

However, undersigned accessed the IIFC website, downloaded the draft policy, thoroughly examined and reviewed the policy side by side with the coal policies of Australia, India, South Africa and Sri Lanka. Dr Nafis Ahmed our course mate in Chemical Engineering Department of BUET, now based in Jakarta as UNESCO consultant, obtained his PhD from London School of Mines and served for several years in New Castle University of Engineering, Sydney, Australia in the capacity of Dean of Faculty of Engineering. We exchanged views over email as he studied the mining options of Bangladesh during his post graduate study and got deeply involved in Australian coal industry. His wife Farjana by the way served in Australian office of BHP, which worked in Bangladesh coal exploration at Phulbari. Farjana now works for ADB in Jakarta.

Undersigned also obtained opinion of Dr Nishantha Nanayakkra of Sri Lanka who has extensive experience of world trading of coal. Several references were obtained from various websites. Based on above and after extensive study over the last four weeks undersigned attempts to anatomize the current version of the draft coal policy.

One must bear in mind that Bangladesh energy industry is dominated by indigenous natural gas, imported liquid petroleum and imported coal. Only 8 percent of the people have direct access to natural gas and about 30 percent have access to electricity. The quality of electricity supply is diabolic to speak the least. Due to resource constraint and bare minimum exploration activities proven and probable reserve of natural gas may run out soon if we fail to embark upon extensive exploration on both onshore, offshore frontiers without any further delay.

Reliable power supply is the essential prerequisite of industrial growth and economic development. To sustain the present GDP growth rate quality power at affordable cost must be made available to our majority population. Otherwise all our efforts for achieving Millennium Development Goal (MDG) towards poverty allegation will blow with the wind. 90% dependence of power generation on natural gas may prove disastrous if we cannot reschedule our power generation fuel mix as soon as possible. Bangladesh reportedly has a total estimated mine able reserves of 1400 Mt of high heating value, low ash bituminous coal which upon aggressive mining can comfort our overstressed natural gas and concurrently add a very valuable item in the export basket.

Basics of Coal
Considering our limited exposure, experience and knowledge of coal it is considered prudent to refresh our knowledge on coal. Coal is a fossil fuel extracted from underneath the surface by deep mining, coal mining (open-pit mining or strip mining). It is composed primarily of carbon and hydrocarbons, along with assorted other elements, including sulfur. Often associated with the Industrial Revolution, coal remains an enormously important fuel and is the most common source of electricity worldwide. Even in the United States, coal accounts for more than fifty percent of electricity.

Coal is primarily used as a solid fuel to produce heat through combustion. World coal consumption is about 5,800 million short tons annually of which about 75 percent is used for electricity generation. China and India uses about 1,700 million tons annually, forecasted to exceed 3,000 million tons in 2025. Coal is the fastest growing energy source in the world, with coal use increasing by 25 percent for the three year period ending in December 2004 (BP statistical Energy Review June 2005).

When coal is used in electricity generation, it is generally pulverized and then burned. The heat produced is used to create steam, which is then used to spin turbines to turn generator and produce electricity. About 40 percent of world’s current electricity production is powered by coal, and the total known deposits recoverable by current technologies are sufficient for 300 years’ use at current rates.

Coal Gasification
High prices of Oil and Natural Gas are leading to increased interest in “Btu Conversion” technologies such as Coal Gasification, Methanation and Liquefaction. In the past coal was converted to make coal gas, which was piped to customers to burn for illumination, heating and cooking. Natural gas has almost knocked out coal gas. South Africa still uses gasification of coal for much of its petrochemical needs. Gasification generally burns hotter and cleaner than conventional coal, can spin a more efficient gas turbine rather than a steam turbine and makes carbon dioxide for sequestration much easier.

Coal liquefaction
Coal can also be converted into liquid fuels like gasoline or diesel by several different processes. The Fischer-Tropsch process of indirect synthesis of liquid hydrocarbons was first used by Nazi Germany, and for many years by Sasol in South Africa – because those regimes were politically isolated and unable to purchase crude from the open market. Coal would be gasified to make Syngas (a balanced purified mixture of Co and H2 gas) and the Syngas condensed using Fischer –Tropsch catalyst to make light hydrocarbons, which are further processed into gasoline via the Mobil-M-gas process. A direct liquefaction process Bergius process (liquefaction by hydrogenation) is also available but has not been used outside Germany, where the process was developed during World War 1 and world war 2. SASOL in South Africa has also experimented with direct hydrogenation. Several other processes have been developed, among these being the SRc-1, and SRC-2 (Solvent Refined Coal) processes developed by Gulf oil. Another process to manufacture of liquid hydrocarbon from coal is Low Temperature Carbonization (LTC coal liquefaction is one of the backstop technologies that limit escalation of oil prices. Among commercially mature technologies, advantage for indirect coal liquefaction over direct coal liquefaction are reported by Williams and Larson. Estimates are reported for sites in China where break-even cost for coal liquefaction may be in the range between 25 to 35 US$/barrel of oil.

Cooking and Use of Coke
Coke is a solid carbonaceous residue derived from low-ash, low sulfur bituminous coal from which the volatile constituents are driven off by baking in an oven without Oxygen at temperatures as high as 1000oc (200o/f) so that the fixed carbon and residual ash are fused together. Coke is used as a fuel and as reducing agent in smelting iron ore in a blast furnace. Coke from coal is gray, hard and porous and has a heating value of 24.8 million Btu/to (29.6 Mj/kg). By products of this conversion of coal to cake include coal tar, ammonia, light oils and coal gas.

Underground Coal Gasification
Underground coal gasification (UCG) is the in situ gasification of coal in the seam. It is achieved by injecting oxidants, gasifying the coal and bringing the product gas to surface through boreholes drilled from the surface. The gas is used for power generation, industrial heating or as chemical feedstock. UCG or CBM has developed as large scale gas production process in the former Soviet Union and trial schemes have been evaluated in many countries including United States, Chinas Australia and the U.K.

World Coal Reserves
As of 2003 it was estimated that one hexagram (1x10 15 kg) of total coal reserves economically accessible using current mining technology. The energy value of all the worlds coal is well over 100,000 quadrillion Btu (100 zettajoules). There probably has enough coal to last for 300 years, considering no rise in world population and no in creased use of coal to attempt to compensate for depletion of natural gas and petroleum.

Methods of Extraction
The method of extraction of coal from coal seams depends on the depth and quality of the seams, and also the geology and environmental factors of the area being mined. If the coal seams are near the surface the coal is extracted by one of the two methods. One method, strip-mining, exposes the coal by the advancement of an open pit or strip. As the coal is exposed and extracted, the overburden from the still covered coal fills the former pit, and strip progresses most open cast mines in the USA extract bituminous coal. In South Wales open casting for steam coal and anthracite is the preferred option.

Most modern coal in British Colombia, Canada, and Queensland, Australia are open pit mines. It is preferred for lesser cost, safer mining and much greater recovery. It is more appropriate for faulted coal seams, which are twisted and bent. It makes underground mining very difficult. Underground tunnels which has to follow crooked seams can be dangerous. It will require lot of money and time still recovery will be minimum In open pit mines, employees do not have to work in small dangerous areas where there could be harmful or explosive gases. There is also no danger of cave ins in open-pit mines.

However, most coal seams are too deep underground for open cast mining. In deep mining the Roof and Pillar method progresses along the Mammoth coal vein seam, while pillars and timber are left standing to support the coal mine roof. This is a dangerous method of operation in deep mining and is dubbed the term “Robbing the Pillars” This method of mining was in use in the United States and caused many fatalities in the early history of coal mining.

Long wall mining method is conducted along the seam. With the use of self advancing hydraulic roof supports known as “Chocks” or “shields” These supports are placed in a line (up to 400 meters long) known as “long wall” and as coal is removed from in front of the long wall, the support are advance. As the long wall advances, the cavity created behind the long wall known as the “goaf” caves in, Long wall mining is the principal method in case of Underground mining in Australia.

Finally, High Wall Mining is a form of coal mining in which a continuous miner is controlled from outside the mine, and is guided along the seam straight back drilling holes in excess of 500 feet. A high wall is the unexcavated face of exposed overburden and coal in a surface mine. As the coal is sheered off the face of the seam, it falls below to a conveyor belt that transports the coal to the surface.

Other methods of mining include High Wall Auger Mining generally applied in an open cast mine, once is becomes uneconomical.

Dangers to Miners
Coal mining historically, has been a very dangerous activity. Open cut hazards are principally slope failure, underground mining roof collapse and gas explosions. Most of these risks can be greatly reduced in modern mines, and multiple fatality incidents are now rare in the developed world. Improvements in mining methods (i. e long wall mining), gas drainage safety lamps, and ventilation have reduced many of these risks. In less developed countries, however, thousands still die in coal mines.

China in particular is the world leader in coal mining related deaths, with official estimates of around 6,000 in 2004. Unofficial estimates place the figure much higher, at around 20,000 deaths. China is also the world leader in coal production and consumption. Chronic lung diseases, such as pneumoconiosis are common to miners, causing a reduced life expectancy for those in the occupation. Black damp, a mixture of carbon dioxide and nitrogen in a mine can cause suffocation.

Types of Coal
As geological processes apply pressure to peat over the time it is transformed successively into:
Lignite: also referred as brown coal, is the lowest category of coal and used almost exclusively as fuel for steam electric power generation. Jet is a compact form of lignite that is sometimes polished and has been used as an ornamental stone since Iron Age.
• Sub-bituminous coal: whose properties range from those of lignite to those of bituminous coal and are used primarily as fuel for steam electric power generation.
• Bituminous Coal: A dense coal, usually black sometimes dark brow, often with well defined bands of bright and dull material, used primarily as fuel in steam electric power generation, with used for heat and power application in manufacturing and to make coke.
• Anthracite: the highest category, used primarily for residential and commercial space heating.

The author has thought it prudent to deliberate on the basics of coal for brainstorming of all stakeholders to come to an appropriate conclusion on our coal policy.


Anatomy of Draft Coal Policy
Vision statement of policy in its initial paragraphs have stated that 1400Mt of mine able coal reserves in the north western part of Bangladesh represents approximately 37Tcf of natural gas in terms of heating value.

Comments
This statement is premature and not too professional. . Extensive study is required about the composition, mining methods, useable options to make such a qualified statement. On the other hand it tends to give wrong signal to policy makers. Such a sweeping statement in the introductory paragraph is not very intelligent given the fact that the committee obviously did not many mining or energy experts who have extensive hand on experience of coal mining.

Regarding mining technology opencast is definitely the answer as our mining areas have poor roof supports, big aquifer and we need to extract the maximum amount of coal. Underground mining is risky and can recover very little at a very high cost. Bangladesh must have learnt a bitter lesson from Chinese adventurism at Barapukuria.

The author aggress with the observation of the draft policy in that coal assets under the ground have much higher economic value to ensure our longer term energy security compared to the resettlement expenses of local population, the price of crops, impact on environments. Modern opencast technologies ensure simultaneous refilling of open pit as the mining progress with the over burden of already recovered coal pits. Only the final section may be ultimately turned into a sweet water lake.

The export and domestic use ratio has to be decided upon mutual discussion and agreement with mine developers on case to case basis.. In free open market, the market forces will decide options. Policy can have a general pricing formula for coal in case of domestic use and export. But it won’t be justified to cap production rate or control export. Otherwise potential investors won’t risk their huge investment in a regulated domain.

When the investment risk, marketing risk, exploration and development risks would be shouldered exclusively by private sector developers what role the dormant Bureau of Mineral Development would play. Rather the competent accomplished mining experts of BMD may be included in BERC after amending the Act and incorporating the provisions for regulating coal mining as well as its trading. Creating too many cooks will end up in fiasco. The author agrees that GSB should of a development fund for human resource development of GSB. It should be strengthened with visionary and dynamic professionals.

Bangladesh must not permit any further natural gas based large power plants after 2010. That will give incentive to coal mine developers to set up coal based power plants in the vicinity of the mines. Coal for power generation will relieve the over stressed and fund constrained natural gas sector from subsidized gas supply to power plants. However, if the coal mine developers set up power plants then the transmission facility from west to east will require substantial up-gradation. Coal price for power generation and price of power from coal based plants should not be subsidized but regulated by independent regulator here in this case off course Bangladesh Energy Regulatory Commission (BERC).

The BERC Act 2003 should be amended to cover coal mining leasing issues, coal pricing etc. Another new body in a human resource restricted country will only create another white elephant.

Vision Statements in the Coal Sector
The author strongly supports the statements of draft policy that North-western Bangladesh may be declared as coal zone through which it can become power house for Bangladesh. It will definitely have a long term all round impact on the entire region from Foreign Direct Investment (FDI) is the only way out for coal mining as all other initiatives exercised so far brought little tangible benefits. Suppliers credit utilized in Barapukuria has become a pair in the neck for poor Bangladesh. It has met several disasters and may encounter few more. Flooding, poisonous gas and now running the mine mouth or mine top power plant may have to use imported coal. Mine developers would be made to take appropriate actions to relocate and rehabilitate affected landowners and restore income generation. New employment opportunity, Satellite Township with modern amenities of life can change the world for the downtrodden neglected population of the area. Entire region from Dinajpur to Khulna would become new economic hub. Monga prone Rangpur people may have round the year work opportunity. Mongla Port can become lively and vibrant.

Potential investors of such huge dimension must be given due incentives and governments must demonstrate strong political will and commitment to overcome criticism of narrow vision theoreticians who always oppose any development initiatives to create storm over the cup of tea.

Open cast mining would cause relocation, rehabilitation reemployment of affected people. Considering the huge potential of high quality of expensive coal which can not only ensure our energy security but also earn huge foreign exchange we have to act prudently and rationally.

Considering the emerging coal mining activities and lack of exposure, experience and expertise Bangladesh must without delay introduce Mining Engineering in BUET and other Engineering Universities. Potential investor must also recruit Bangladeshi fresher (Mechanical, Electrical, Chemical, Civil Engineers, Geologist) and train them abroad in mining institute and active mines to create technical base.

Whether or not Jamalganj coal mine is suitable for Coal Bed Methane (CBM) has to be assessed on in depth analysis and review of coal composition, recovery potential and overall economics. These days coal gasification, coal liquefaction technologies have over ridden CBM. Jamalganj the author apprehends may not be an ideal candidate for CBM.

Developing peat potentials may be given serious thoughts. The author agrees with the most of the high lights of 20years coal sector goal which are:
I. To undertake exploration activities in unexplored frontiers and also in identified coal basins to discover new coal fields.
II. To develop coal deposits in a planned manner to maximize coal recovery maintaining best engineering and health, safety and environmental practices.
III. To regulate yearly production of coal to 30Mtpa however is neither consistent nor prudent in the context of the vision. Why should FDI flow in a restricted market? Potential investors won’t risk capital if they don’t get economic return within envisioned period. We should let it be decided by BERC on case to case basis, always ensuring that developers are committed to ensuring energy security of Bangladesh prior to export.
IV. To attract private investors both for exploration and exploitation. The iii and iv contradicts. If we cap annual production to bare 30Mtpa competent foreign investors will fast loose focus.
V. To minimize coal mine related environmental and safety hazards and to ensure compliance of mitigation measure and reclamation procedures.

This must be meticulously observed, monitored and regulated by the coal HSE staffs of BERC. Safety and environment should not be compromised like the ongoing Barapukuria coal mine.

Other goals have already been commented upon. Part B of the drafts policy defines terms, section-3 elaborates Energy Security by coal development which has very little to argue other than regulation of coal production and export. The way the regulation of coal sector production has been articulated it will give wrong signal to potential investors. In dynamic domain capping production for maintaining a 50year reserve to production ratio may end up in same fiasco as of natural gas. Not the Bureau of Mines but BERC after amendment of BERC Act 2003 should be the sole authority to issue mining license. BMD should be absorbed in BERC.

The target of annual production will depend on economic feasibility of individual mines, capacity of local market to absorb and also recovery of investment of the investors. BERC may review it on case to case basis and ensure to protection of resources of Bangladesh. The author agrees with the Environmental aspects/ considerations enumerated in the draft policy.

Community participation, ground water management and aquifer structure, mine water management, environment management plan, environment costs and environment impact research have been correctly articulated in the drafts policy.

Land utilization and reclamation has also been dealt with properly. Private and private sector investments to carry forward coal sector master plan have also been correctly identified. Draft Policy also includes exploration options, process of investor selection which requires intensive interaction among stake holders. Report also includes other options of awards of mining which encompass coal basin for captive mining possibly for Tata projects and projects of similar dimensions. Peat blocks are an interesting option and can be explored. Coal Bed Methane is still under research and development. Production sharing contracts for our Coal sector may not be appropriate option. Bangladesh coal sector public companies do not have credibility for any reputed international company to even bother about joint venture. It has almost non existent technical and financial capability. It has been also systematically destroyed by corrupt public sector and local business syndicates.

Coal policy formulation is courageous initiative of EMRD of MOEMR. The committee has done an excellent base policy. Extensive interaction of knowledgeable civil society, academia, professional groups, potential investors, other stake holders would further refine, update it and make it time tested and appropriate for energy hungry Bangladesh. Emotions of non practicing environmentalist and politically ill motivated so called intellectuals with negative mindset will continue to oppose any and every development initiative. But government must remain committed to its Millennium Development Goal, PRSP and Energy Security vision without bothering for petty group interests. Draft coal policy is a noble initiative and good stepping stone.