Himalayan News Service

Dhaka, June 5:

Bangladesh will launch its first commercial coal production project in collaboration with a Chinese company in July, officials said today. The project, for which Bangladesh has signed an agreement with China Machinery Export-Import Corporation, will start at Barapukuria coalfield in northwest Dinajpur district, 400-km from the capital. “With the starting of production of coal from Barapukuria coalfield, the country will enter the modern coal mining era,” a senior official in the energy and mineral resources ministry said. Under the $82.3 million agreement, the Chinese company will extract 4.75 million tonnes of coal in 71 months from the coalfield. Daily production will be around 2,300 metric tonnes. The official said the agreement signed yesterday with China Machinery Export-Import Corp covered production, management and maintenance of Barapukuria coalfield. With the supply of high-quality coal from the field, the 125MW first unit of the Bangladesh’s first coal-based power plant will start generation in October.

Under the pact, the Chinese firm, which also developed the coalfield, will get $17.236 for every tonne of coal. The production cost, which includes charges payable to the Chinese company and Bangladesh government, will be $55.42 a tonne. The selling price of Barapukuria coal has been fixed at $60. The project to develop the coalfield was started in 1992. The Chinese company started development work in 1994 that ended more than a decade later on May 31 this year. The total cost of developing the field was $194.91 million. The Chinese government provided credit worth $109.2 million for the project. Barapukuria has a reserve of 390 million tonnes of coal, 60 per cent of which is recoverable, according to a government estimate.