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Barapukuria Coal Mine

Govt dumps costly Chinese company

UNB, Dhaka
The government has rejected a proposal of the China National Machinery Import and Export Corporation (CMC) to continue operation of Barapukuria Coal Mine due to the high operational cost quoted by the Chinese company.
Officials said the CMC, with which state-run Petrobangla is now constructing the mine, quoted 30 dollars for producing each ton of coal.
But, according to State Minister for Energy AKM Mosharraf Hossain, the government found
that the project would not be viable unless the per ton production cost is about 22-23 dollars.
Officials at Petrobangla and some experts, however, said the operational production cost should be even much less, around 10-15 dollars.
They said per ton production cost should be lower as the government has offered to bear the power cost.
The state minister for energy told journalists yesterday that some international companies have shown interest in response to the government tender for management and operation of
Barapukuria Coal Mine.
"We are optimistic about getting a very good price, which will make the project viable," he said.
Petrobangla officials said per ton production cost of 20 dollars for the contractor could make the project viable. They said their target is to sell coal from Barapukuria at slightly above 60 dollars per ton with government expenditure of 40 dollars.
"At 40 dollars, we'll not be able to make the project viable if we've to pay the production and management contractor more than 20
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dollars a ton," said a Petrobangla official.
The Petrobangla's cost included repayment of loan, overhead costs, VAT and other expenses.
Mosharraf Hossain said the CMC did not agree to reduce its production cost from around 30 dollars and that was the reason the government had to go for international tender.
Another reason the CMC could not be awarded the contract was that the Chinese company refused to accept all conditions of the turnkey contract.
"The CMC wanted to leave the risk factor on us," said a Petrobangla official.
He said according to the government tender, the control of purchasing consumable spares would be with Petrobangla. "The operating company will give the list of such purchases and we'll buy."
The one-million-ton per annum Barapukuria Coal Mine, country's first underground coal mine, is expected to go into commercial production in February next year. The best international bidder will be awarded an operational and management contract for six years.
One task of the selected international mining company would also be to train up the local officials.
"Our (local) officials should have been trained up already. Many have been trained up, but unfortunately, they didn't stay in Barapukuria and got transferred," said the state minister for energy.
He said he would ask for a list of such trained officials and take necessary action to ensure that "right people work in the right places."
The minister said Bangladeshi coal, which is environmentfriendly because of no ash and sulphur content, can open up new possibilities. "The entire northern region can be electrified by coal (by setting up thermal power stations)."
There are also offers for coal mines in Fulbari and Khalaspir, he added.
Meanwhile, the minister said that an Australian company has shown interest to extract titanium from Cox's Bazar sea beach. The company officials will visit Dhaka next week.
"There were some complexities over environmental issues for titanium extraction. But environmental clearance has been obtained," he said.
The Australian company is likely to form a joint venture with local participation.