Written evidence submitted by Global Coal
Management
PHULBARI COAL PROJECT—A BANGLADESH
PERSPECTIVE
BANGLADESH
Bangladesh is one of the most densely populated
countries in the world with 160 million people living in an area
two thirds the size of the United Kingdom. It has enjoyed more
than 6% economic growth in real terms over the last five years
as well as substantial improvements in measures of human development.
It has also been identified as one of the countries most vulnerable
to the effects of climate change with a significant proportion
of the population living in remote or ecologically fragile areas
such as river islands or cyclone prone coastal areas. Two thirds
of Bangladesh is less than five metres above sea level.
Energy is an essential component in the fight
to eradicate poverty. Unfortunately the majority of Bangladeshis
do not have access to electricity and those that do experience
frequent load shedding. This energy and power shortfall is a major
obstacle to the country's future growth and ability to combat
climate change.
ELECTRICITY AND
UNITED NATIONS
HUMAN DEVELOPMENT
INDEX (UNHDI)
The United Nations Development Programme shows
greater access to electricity can improve nutrition, health facilities,
education levels, water quality and sanitation. For Bangladesh,
with extremely low per capita electricity consumption, small increases
will deliver substantial improvements in UNHD indicators.
The Government has linked the country's prosperity,
and the attainment of the Millennium Development Goals, to achieving
annual GDP growth rates of 8-10%. However the country's electricity
generation of 3,800-4,200MW is inadequate and, with a growing
population, the demand for energy in Bangladesh will also increase.
In order for economic growth to continue even at 6%, a 50% increase
in electricity generation is needed within the next five years.
Natural gas is currently the country's main
source of commercial energy, with 90% of electricity generation
reliant on gas. However, the gas reserve is rapidly depleting
and supply cannot meet current demand. There are an estimated
2.9 billion tonnes of coal reserves in Bangladesh, the equivalent
in energy terms to over five times its current natural gas reserves.
PHULBARI COAL
PROJECT
The Phulbari Coal Project (the Project) is a
landmark project for Bangladesh. It embodies a unique opportunity
to contribute to Bangladesh's energy security while also being
a catalyst for wider economic and social development. The Project
is located in one of the least developed regions of the country
and should be viewed as one component of a broader energy development
plan, which includes a 2,000MW mine mouth power plant, upgraded
transmission lines connecting to major cities and regional infrastructure.
GCM Resources plc (GCM) has established a coal
resource of 572 million tonnes (JORC compliant) near the town
of Phulbari in North West Bangladesh. Thermal coal represents
80% of the resource with the remainder being semi-soft coking
coal. The coal will be extracted by the open cut mining method.
In addition, a variety of co-products (gravel, aggregate, silica
sand, kaolin, clay) will be recovered from the overburden.
GCM has invested over £25 million to date,
in preparing the Feasibility Study, Scheme of Development, ESIA,
Management Action Plans and extensively explaining the Project
to a wide range of stakeholders.
The approval of the Feasibility Study and Scheme
of Development has been delayed by political and social uncertainty
arising in the 2006-07 election year which continued into the
period when Bangladesh was governed under a state of emergency
by Caretaker Governments. The December 2008 elections returned
a Government with a significant majority and a stated intention
to address the country's energy and power problems.
GCM PLC—CORPORATE
RESPONSIBILITY
The effective management of social and environmental
risks is an essential component of any successful mining project.
The Board and management of GCM recognise that long term stakeholder
value can only be created if social and economic benefits are
produced and the environment protected at a national, regional
and local level. In partnership with government, civil society
and the community, GCM will develop the Phulbari Coal Project
to the highest international standards.
GCM ensured its activities, including preparation
of the Project Feasibility Study, the ESIA and its associated
Management Plans, complied with the Equator Principles, (which
includes eight different Performance Standards relating to different
issues such as Involuntary Resettlement and Land Acquisition and
Indigenous Peoples). The first principle is to avoid any adverse
impacts and where this is not possible, to mitigate against these.
In January 2009, GCM became a signatory to the
UN Global Compact, and has joined the UK Network and Bangladesh
Local Network of the UNGC. In doing so, GCM has agreed to embrace,
support and enact a set of principles in the areas of human rights,
labour, the environment and anti-corruption.
IMPACTS AND
BENEFITS
Energy Security:
Within four years the mine could be supplying
new power stations.
Economic:
In early 2006, an independent study concluded
the Project would increase GDP by 1% and deliver revenues of approximately
US$7 billion to the Government over the Project's life. Listing
on the Dhaka Stock Exchange would provide local equity participation.
Infrastructure:
The improved infrastructure necessary to support
the Project (including rail network and port facilities) will
provide a catalyst for further development.
Resettlement:
The Project will require resettlement over a
10 year period of approximately 40,000 people, including around
2,300 indigenous people. Resettlement sites constructed will have
improved services and infrastructure. New schools, religious centres
and medical centres will also be built. No one will be worse off
and each person adversely affected will be fairly and fully compensated.
Water Management:
Open pit mining will require the ground water
level at the mine site to be drawn down to maintain dry working
conditions. This will be achieved by pumping water continuously
from deep tube wells (bores). The Phulbari Water Management Plan
will ensure the high quality extracted water will be made available
to the community for drinking, agricultural irrigation, and use
by local businesses. Water will also be released in a controlled
manner into seasonal water courses, rivers and wetlands to preserve
and in many cases improve the environment.
Environment:
Any adverse environmental impacts will be closely
monitored and mitigated. A forest will be established and a wildlife
corridor created. Bangladesh imports around five million tonnes
of poor quality high sulphur thermal coal which is used by the
country's numerous brick kilns. Replacing it with the high quality
Phulbari coal will significantly improve air quality across Bangladesh.
Agriculture:
The "life of Project" mine footprint
will occupy 5,200 hectares, although at any one time only a third
will be actively mined and the rest will either still be cultivated
(prior to mining) or rehabilitated back to productive use (post
mining). An Agriculture Improvement Plan based on improved farm
management practices will deliver an additional crop per annum
and higher yields per crop. Rice production alone will more than
double as a result.
Job Creation and Livelihood Restoration:
The Project will create an estimated 17,000
new jobs (both direct and indirect) and preferential employment
policies will be applied to maximise the benefits to the local
community. The use of Phulbari coal in power generation, combined
with the co-products, has the potential to support many spin-off
industries involving the creation of a significant number of new
jobs.
Indigenous Peoples:
An Indigenous Peoples Development Plan has been
prepared—the first of its kind in Bangladesh. A number of
consultative meetings were held with the indigenous groups to
understand their requirements for resettlement. This plan will
be updated once approval is received.
Stakeholder Engagement:
The Company recognises a key component of the
Project is regular engagement with its community. Meetings with
numerous groups to explain the Project (including local and international
NGOs and media) are ongoing and Project information in Bangla
is provided on the company's website: www.phulbaricoal.com.
GCM will ensure local stakeholders are fully informed and consulted
prior to Project commencement and throughout the Project's life.
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