5th January 2021
Zubayer Zaman

“……..Local coal extraction for power generation is neither feasible nor cost-effective”- a remark from State Minister for Power, Energy and Mineral Resources Mr. Nasrul Hamid comes as no surprise. He made this remarks while speaking at a webinar on “EP Talks: Payra Power Plant: An Example of Timely Execution” recently. Mr. Nasrul has probably had drawn such conclusion based on dismal mining experience in Barapukuria. He might also take consideration of recently completed underground mine feasibility study in Dighipara coal field. While this statement comes as surprise to many but not to the industry insider with practical experience in this field, who have long opined that the geological setup of the coal bearing basins of Bangladesh don’t permit economic extraction of coal using underground mining method. Bangladesh needs to explore alternative mining methods, and where feasible, open cut mining would be the best possible option to recover its limited mineable resource. The underground mining experience and the mine feasibility study have just re-established the obvious outcome – UNDERGROUND MINING IS NOT THE VIABLE OPTION FOR BANGLADESH.   

Underground Mining Not Delivering

The coal basins in Bangladesh are usually of asymmetric half-graben sedimentary basin, bearing coal measures of Permian age. Three credible mine feasibility studies, so far completed, have extensively explored Barapukuria, Dighipara and Phulbari coal fields and established the resource base to international resource classification standards. The deposits are characterized by multiple coal seams (generally 5-6 seams) with the major one account for about 60-70% of the estimated resource. This is the ‘seam of interest’ for underground mine planning as other coal seams are technically not feasible to mine and leave no option but to be left unmined. Thus a sacrifice of about 30-40% of the valuable resources is forced to make at the very first stage of underground mine planning.

Seam thickness and equipment technology also limit resource recovery and rate of production from the Target Seam. The proposed underground mine planning in Dighipara sets the target of 90 Mt of coal recovery from Seam B (~30 m thick) in slices over a period of 25 years at an annual rate of 3 Mt. The planned recovery, if achieved, would be about 21% of the mineable reserve of the Target Seam (Seam B- 428 Mt) and overall only 12% of total estimated reserve (706 Mt). Barapukuria mine is designed to extract 25-30 Mt out of the total estimated reserve of 390 Mt over a period of 20-25 years (estimated recovery 6-8%). The coal extraction is being carried out in slices at Seam VI (36 m thick) and the mine, so far over its 15+ years production life has only recovered a total of about 10 Mt at an annual average rate of 0.6 Mt. This is how underground mining delivers or projected to deliver for Bangladesh! The extreme poor recovery, leaving 90% coal unmined, is understandably neither feasible nor cost effective: Just a costly wastage of valuable natural resources, time and money.

The cost of production in underground mining is inherently higher, which could only be possible to offset by achieving higher coal resource recovery and by increasing production scale (larger coal output to reduce cost per tonne). But as coal recovery is extremely poor and production rate is relatively low, the obvious outcome is excessive high production costs, which is reported to be more than US$ 100/tonne in Barapukuria mine and would be even higher in the proposed Dighipara underground mine. This is neither economic nor justifiable in any sense while in the international market coal price is well below the cost of coal mining in Bangladesh.

Coal based power project always prefers a secured and steady supply of coal at competitive cost. Underground mining in Bangladesh fails to deliver such supply security and thus fails to attract potential investor to setup large coal fired power plant based on domestic coal. Barapukuria Mine, which had all the potential to support large scale power generation, is now even struggling to feed only 525 MW mine mouth power plants. This is just a ‘lost opportunity’ for the country because of choosing inappropriate mining method.

Open Pit Mining to Deliver

Then what is the best option for Bangladesh to mine its limited valuable coal resource! A close look at Phulbari open cut mine plan is worth useful at this point when underground mining is considered not to be feasible and cost effective.  

The Phulbari mine feasibility study considered both open cut and underground options and identified open cut method as the only technically viable option for economic extraction of Phulbari deposit. The study also confirmed that underground mining at Phulbari will lead to a poor resource recovery, about 10-20% of the coal resource and will not be economically viable. Dighipara mine feasibility study and mining experience in Barapukuria support the Phulbari findings!

Phulbari is the shallowest coal basin in Bangladesh with coal seam depth ranges between 150-270 meters. The basin has an in-situ resource of 572 million tonnes of high-quality bituminous coal. The proposed open cut mine plan sets the target of recovering 475 million tonnes of ROM coal, which represents about 83% of the total resource. However, the mineable reserve is calculated down to the base of the Main Seam only, and there are opportunities to mine the lower seams (total resource 58 Mt) which may be realized as the seams become accessible. Thus, a high recovery (>90%) can be achieved against a poor recovery (<10%) in underground method. Phulbari mine with such high amount of recoverable reserve could potentially be the powerhouse for country’s primary fuel supply and bring a balance between import and domestic coal supply mix. Just imagine how many Barapukuria size mine requires to match with the coal recovery of Phulbari open cut mine!

Open cut mining in Phulbari is expected to deliver reliable and stable supply of large quantities of coal (15 Mt/annum at full production rate) for a period of over 30 years. The cost of production, reported to be less than US$ 50/tonne, is far lower in comparison to that of underground mine options. This is an attractive proposition for any large-scale power generation project where long term fuel supply is ensured, coal quality is consistent, and price is competitive. A study revealed that the Phulbari mine production alone can support generation of 6,000 MW of electricity using latest ultra-supercritical plant technology, either in the mine mouth and/or strategically located sites elsewhere in Bangladesh. However, mine mouth power generation is considered to be cost effective, delivers lowest tariff power compared to any other options of coal fired power generation, either based on import or domestic sources. A third of country’s projected coal fired power generation target (19,000 MW by 2041) can be fed alone by Phulbari coal. This is how open cut mining in Phulbari makes the difference - in terms of resource recovery, supply security and power generation potential.

Bangladesh needs coal to meet its planned coal fired generation target. Coal import is projected to be on the rise, making reliance on imported primary fuel even higher. However, it is always a preferred and cost-effective option to use domestic energy sources, either entirely, or in part to supplement import sources. But domestic coal supply so far seems uncertain because of poor outcome of underground mining: the recovery is poor; cost of production is high and thus not feasible and cost effective for power generation. Now it is time to look into the other mining options- the Open Cut Mining, which offers better economics, supply stability and reliability over the longer period. The Phulbari mine plan presents the opportunity to compare how open cut mining in similar geological set up could deliver best for the country. PHULBARI COULD BE THE ‘MINE OF OPPORTUNITY’ FOR BANGLADESH.

Zubayer Zaman, Geologist, <[email protected]>

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