CIL plans expansion, begins talks with Bangladesh for coal exploration

Keen to expand its footprint across the border, Coal India (CIL) has initiated talks with Barapukuria Coal Mining Company (BCMC), Bangladesh’s sole coal producer, to help it explore coal mines as well as set up new projects.

BCMC is a subsidiary of the Bangladesh government-owned Petrobangla, with extremely limited mining capability. “We have visited Bangladesh and spoken to this company’s as well as Petrobangla's top executives. We have asked them to revert with some geological data,” a senior Central Mine Planning and Design Institute (CMPDI) executive said. CMPDI is the technical subsidiary of CIL responsible for this project.

However, the official said that CIL was not interested in participating in a tender to bag an exploration contract and would be interested only if BCMC signs up with Coal India on a nomination basis.

Talks for an Indo-Bangladesh collaboration on coal exploration and mining at Barapukuria, Khalashpir and Jamalganj areas in Bangladesh was initiated at the ministerial level, and Bangladesh wanted Coal India to participate in a tender for exploration of coal fields and the feasibility of mining thereof. “So far, more geological data on these areas is required to understand feasibility of any mining project,” the executive said.

Meanwhile, firms in the US, Germany, and Australia have bagged crucial exploration and feasibility contracts from Bangladesh. BCMC has signed a contract with US-based John T. Boyd Company together with a local partner for a feasibility study on extension of existing underground mining operation of Barapukuria coal mine towards the southern and the northern side of the basin.

Another contract for a feasibility study for development of Dighipara coalfield at Dinajpur has been bagged by a consortium of German firms — MIBRAG Consulting International GmbH and FUGRO Consult GmbH, and Germany & Australia-based Runge Pincock Minarco.

China has been instrumental in the development of coal mining in Bangladesh although coal output usually hovers around 1.16 million tonne (mt) per annum despite the country possessing an estimated reserve of 7.96 billion tonnes. After bituminous coal was discovered in Bangladesh’s Dinajpur in 1985, a construction contract under a supplier’s credit of $194.91 million was signed between China National Machinery Import & Export Corporation (CMC) and Petrobangla with a view to develop an underground mine and subsequently BCMC was set up. This mine, which has reserves of 390 mt, is Bangladesh’s only active coal producing mine.

In the past, Chinese contractors, appointed by BCMC, were able to dig out 5.5 mt of coal from this mine in a six-year timeframe. Besides, China has been training Bangladeshi engineers on mining technology. A Coal India official said that Bangladesh has traditionally been a coal importer and it was fed to industries like cement, brick and others, from undivided British India when coal used to be transported from Meghalaya. However, after partition, the route ended abruptly and Bangladesh was severely starved of coal.

“This led Bangladesh to develop its power sector based primarily on gas and supported by heavy fuel oil (HFO) and high speed diesel (HSD),” the official said.

According to Sustainable & Renewable Energy Development Authority (SREDA) in Bangladesh, coal-based electricity generation accounts for only 1.32 per cent of the total electricity production while gas-based plants account for 52.86 per cent of the total production. HFO and HSD accounts for 19.01 and 8.93 per cent respectively.

However, the country has been focusing on developing thermal units and NTPC and other Chinese firms have taken a lead. In turn, the demand for thermal coal is expected to shoot up substantially in the coming years.