MAC: Mines and Communities

Open-pit mining will be disastrous for Bangladesh

Published by MAC on 2006-07-06

Open-pit mining will be disastrous for Bangladesh

6th July 2006

As Bangladesh nears its next generation there are conflicting reports over whether the current ruling party's prospective deal with the Tata corporation remains in place. The huge Indian company originally envisaged exploiting electricity, setting up steel plants, and mining coal in the neighbouring state. Meanwhile, yet another group of Bangladeshi citizens has vehemently opposed making the country reliant on coal.

Speakers tell JU roundtable: Open-pit mining for lifting coal in massive scale will be disastrous for the country

The Daily Star (Bangladesh)

26th June 2006

The speakers at roundtable yesterday said if the government allows open-pit mining in its coal policy now being formulated, it will destroy cultivable land and ecological balance. The roundtable titled 'Lifting of Bangladesh coal resource and its distribution: What should be the role of government?' was organised by Arthonity Adhyayan Kendra at Jahangirnagar University. "Though fuel became a dominant factor in politics and economics across the globe after 1973, Bangladesh has not formed any policy yet to utilise the non-renewable resource. The way policy is being formulated in our country will only put present and next generation at risk," said Prof Anu Mohammad of economics department.

The speakers stressed the need for extracting coal to reduce pressure on natural gas which is feared to be exhausted by 2011. They said two points must be kept in mind while formulating the coal policy. These are 'fuel safety' ensuring the highest utilisation of lifted coal inside the country rather than export, and 'comparatively safer lifting method,' they added. The speakers said of the two coal lifting methods, open-pit mining destroys fertility of nearby farmland and causes draught and water pollution. As the method also needs a vast area it does not allow human habitation within a considerable range of the mine, they said, adding it will be harmful for a densely populated country like Bangladesh.

The speakers said as the demand for coal in the country is low, three to four million tons a year, coal can be lifted through underground mining. They also opposed the Asian Energy proposal of lifting coal in massive scale through open-pit mining and exporting large portion of lifted coal. "Giving away the resource means giving away the soil," said Prof Amirul Islam Chowdhury urging the youth to protect the resource of the country.

The speakers criticised the government for awarding policy formulation task to an organisation which has no expertise on the issue. They also condemned the government's failure to realise compensation worth Tk 12,900 crore from Unocol and Niko which could be used in building skilled manpower for conducting the job. "Our own resource is getting inaccessible due to the conspiracy of imperialists and their cohorts in our country. Only mass protest with the spirit of sacrifice can make it possible to protect our resources," said Engineer Md Shahidullah. Prof Badrul Imam of geology department and Prof Zinatunnesa R M M Khuda Khandaker, chairman of economics department, took part in the roundtable which was moderated by Prof Amirul Islam Chowdhury.

Tata, govt to sit again

The Daily Star (Bangladesh)

6th July 2006

The Indian conglomerate giant Tata's Bangladesh Project Director Manzer Hossain yesterday ruled out the media reports about the group's intention to withdraw the proposal for investment in Bangladesh and said the government will sit with them on July 10 to make its position on the proposed $3 billion investment clear.

A high-powered team from Tata Group headed by its Executive Director Alan Rosling will visit Bangladesh to meet government officials. The Tata officials are expecting a positive response from the government at the meeting.

The group is still optimistic about the proposed investment project in Bangladesh despite the uncertainty that seems to be looming large due to the government's unusual delay in giving an approval.

Manzer Hossain said the media interprets things on its own while Tata Group and the government have yet to make their positions clear.

He expressed the group's concern over the government's delay saying that nobody can wait an indefinite period of time to invest. "The delay is definitely a cause of concern for Tata Group but we are still optimistic about the project," Manzer told the Daily Star yesterday.

Local news agency the UNB, quoting an Indian newspaper, said, "Tata Group has finally decided to withdraw an ambitious three billion dollar investment proposal for undertaking several big ventures in Bangladesh, following delays in taking a decision by the host country."

Meanwhile, the government is delaying the signing of an agreement with Tata considering it a 'risky deal' preceding the upcoming election.

Energy Ministry Adviser Mahmudur Rahman told the media that the government may reach a consensus with the group so that the next elected government can sign an agreement after assuming office.

Tata Group in its latest revised ambitious proposal had asked the government to reply by the end of May this year but the government failed to reply within the deadline.

The conglomerate on April 20 this year formally submitted its initial proposal to invest $2.5 billion for setting up a 1,000MW power station, a steel mill with 4,20,000 ton annual production capacity and a fertiliser unit with one million ton production capacity.

The Bangladesh government and Tata Group agreed to kick off formal negotiations on May 25 and to wind it up by August 31 to clear the way for signing an agreement before November 30 this year.

Tata is one of the top-most industrial groups in India with over 90,000 crore rupee annual turnover, and over 2.2 lakh employees. In the last 50 years there has been no strike in its 91 companies.

Ratan Tata, chairman of the corporate house, visited Bangladesh last October to discuss the investment proposal with the Bangladesh authorities.

Tata wants speedy decision as govt dithers

Khawaza Main Uddin, New Age

5th July 2006

Top executives of the Tata Group are scheduled to meet the executive chairman of the Board of Investment on July 10, apparently in a last-ditch bid to make the government take a speedy decision on its $3 billion investment initiative.

The Indian corporate giant has reportedly been considering a ‘pullout option’ in case of more delay in responding to the minimum offers it made in April for commissioning four projects—steel, fertiliser and power plants and coalmine exploration—in Bangladesh.

When asked, the investment board chief, Mahmudur Rahman, told New Age on Tuesday that the government understood the frustration of the Tata authorities, ‘but they have to understand the domestic political compulsion just three months before this government leaves office’.

He said the Tata Group might have to wait six more months to sign a contract with the next elected government.

The government had been requested to make its response to the Tata proposals on gas pricing, equity partnership, floating shares, power tariff and other contentious issues within one month from the date of submitting the Tata’s minimum offers on April 30.

The group’s resident director, Manzer Hussain, however, ruled out the possibility of pullout terming media reports ‘mere speculations’.

Highly placed sources in the government said the ministers and officials involved in the process of dealing with the Tata proposals had been directed to be cautious so that the issue did not cause the ruling Bangladesh Nationalist Party an electoral debacle.

The sources added that it would also be difficult for the Tata authorities to back out of the move since they spent time and money in selecting Bangladesh for its investment.

A national committee headed by the industries minister, Motiur Rahman Nizami, assigned a secretarial-level committee to recommend measures on the Tata proposals. Noted economist Wahiduddin Mahmud has been making an independent assessment while the Asian Development Bank will also prepare a review report on the Tata investment proposals.

‘It is not the right time to enter a potentially controversial deal. The government could have settled the matter and signed an agreement with Tata in early 2005, two years before the general elections scheduled for January, 2007,’ one of the sources said.

Against this backdrop, the officials of the group, including the executive director of the mother company, Tata Sons Alan Roseling, and the group’s resident director, Manzer Hussain, have sought an appointment with the investment board executive chairman to make their latest positions clear on the investment move.

Wire service Reuters ran a story from Mumbai quoting Alan Roseling as saying that the company was in touch with government officials and reviewing alternative courses of action.

‘We’re optimistic, but we are realistic about the situation. We’ve spent a lot of time and money developing the Bangladesh project,’ he said. ‘On the one hand, we are disappointed that it is taking so long. Equally, we are used to this pace.’

The Tata Group’s proposed investment encompasses a steel plant with a capacity of producing 2.4 million tonnes annually, a 1-million-tonne-capacity urea factory and an over 500-megawatt capacity captive power plant, apart from exploration of a coalmine. It has also planned to set up another 1,000 megawatt power plant based on either gas or coal in future.

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