phulbari coal mine executive summery by asia energy

8/13/2019 phulbari coal mine executive summery by asia energy

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STATEMENT OF INTENT: ASIA ENERGY CORPORATION (BANGLADESH) PTY LTD

Overall Environmental and Social Intent

Asia Energy Corporation (Bangladesh) Pty Ltd (Asia Energy, or the Company) proposes to develop and operatean open cut coal mine near Phulbari Township in northwest Bangladesh (the Phulbari Coal Project). The Project islocated in a predominantly rural / agricultural area and consists of the mine, ex-pit overburden dump and associatedmine infrastructure (Mine Footprint). As a result of mine development, villages located within the Mine Footprint andthe eastern extremity of Phulbari Township will be relocated. Transport of the coal to domestic and internationalmarkets will require upgrading rail infrastructure, construction of a coal loading facility at Khulna in southernBangladesh and dredging of a deep shipping channel for access through the Bay of Bengal. Asia Energy has alsoapplied to the Government of Bangladesh (GoB) for permission to construct a mine-mouth power station.

Asia Energy has already submitted relevant statutory documents to the GoB (Initial Environmental Examination, andEnvironmental Impact Assessment) and received from the Department of Environment the appropriateenvironmental approvals for the mine to proceed. Based on approval conditions, Asia Energy intends to developand operate an open cut mine according to sustainable development principles, ensuring social and economic gainsboth to the local community and nation, while minimising the impact on the environment. Accordingly, the Companyhas endeavoured to ensure that this Environmental and Social Impact Assessment (ESIA) addresses in acomprehensive and open manner, the interaction of the proposed mine with the community and environment. AnEnvironmental and Social Action Plan has also been developed to address likely impacts, mitigation action plans,monitoring, management of risks, and schedules.

Asia Energy acknowledges that development of the mine at Phulbari will have some impact on the local area andwill require relocation of people. In this regard, the Company plans to build the coal mine in broad and openconsultation with the community and all stakeholders, benchmarking it in accordance with the standards set by theBangladesh authorities and international development agencies. The Company is aware of the complexities of theProject and has the knowledge and capability to mobilise multi-disciplinary teams, and the commitment to deal withall aspects of the Project and its incumbent technical, environmental and social risks.

Overall Approach to Issues

Asia Energy is committed to planning, designing and implementing the Project in a responsible manner, adhering tothe highest national and international norms, standards and requirements. Detailed design work is proceeding onmany engineering, environmental and social aspects of the Project, including plans for mitigation measures.

Mine operation, site rehabilitation, resettlement and mine closure plans have been developed in consultation withrelevant stakeholders, and driven by sustainable ecological and social principles. The entire planning process hasbeen underpinned by open and informed consultation (local community, non-government organisations, variouslevels of government, inter-ministerial committees and other stakeholders); developing broad community supportand a financial commitment for the mine sites rehabilitation and closure. Mine planning has followed miningindustry best practice procedures and world recognised guidelines, notably the Equator Principles, InternationalFinance Corporation (IFC) environmental and social safeguard policies (on such issues as involuntary resettlement,ethnic minority people and cultural property), the World Banks and IFCs specific guidelines on coal mining, and theproposed new IFC Performance Standards.

ASIA ENERGY PLC2ndFloor Foxglove House166-168 PiccadillyLondonW1J 9EFUnited Kingdom

Tel: +44(0)20 7290 1630Fax: +44(0)20 7290 1631Email: [email protected]

Asia Energy Corporation (Bangladesh) Pty LtdPlot-2(B), Block-SE(C), Road-138Gulshan-1, Dhaka-1212BangladeshTel: +88 02 885 0205/6Fax: +88 02 882 9025

Email: [email protected]


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Asia Energy has developed Project monitoring benchmarks for social matters (such as reduction of illiteracy),employment and income levels (job creation and poverty reduction), environmental safeguards (indicatorparameters and species) and for the eventual closure of the mine. The Companys objective has been to undertakecomprehensive environmental and social impact assessments through a process of consultation with allstakeholders, (demographic and socioeconomic, resettlement, town planning surveys, information centre,government and community consultations, tea shop meetings), and listening genuinely to their concerns.

Development Concepts

There is no alternative site for the mine, as the coal resource deposited hundreds of millions of years ago occurs ata specific location. Given that the mine and its infrastructure are fixed to that specific location, its development hasto be acceptable in every respect - technical, management, social, economic and environmental. In preparing theESIA, concerns of the stakeholders have been considered and where possible, accommodating alterations made.These include:

minimising overburden dump, infrastructure and river diversion areas to prevent undue land loss; altering the mine path to avoid most of the eastern part of Phulbari Township, reducing resettlement by

25 percent;

a commitment to assist farmers with improving agricultural productivity in Project affected areas; and todeliver water in the dry season;

development of both native forests and high value agricultural production in the rehabilitated areas; protection and maintenance of wetlands and sal forests adjacent to the Project area, including the

regionally important Ashoorar Beel;

use of best available equipment to minimise noise and dust impacts, including the use of conveyor beltsfor moving coal and acoustically efficient trucks; and

construction of sound bunds opposite the coal processing area and between the mine and PhulbariTownship.

Specific Environmental and Social Undertakings

As part of the mine development Asia Energy will:

help establish some wetland and native forests for a biodiversity corridor; develop an agriculture marketing strategy for growers in the Project area; develop a strategy for improved rural livelihood and biodiversity; upgrade some aspects of the local health and educational facilities; promote womens enterprise; and provide necessary training for development of skills, as per Contract 11/C-94, Exhibit C.

Community Support

The Project is a significant development for Bangladesh and for the northwest of the country in particular. There aretangible environmental, social and economic benefits that will accrue locally, regionally and nationally. Asia Energyhas developed a strong co-operative relationship with the Phulbari community. Most of the local community supportthe Project, even with the understanding that a considerable number of residents will require resettlement andlivelihood restoration support. As with any major project, objections have occurred. Asia Energy has addressed the

issues in open consultation with the concerned groups. Local support is reflected by the Upazila Nirbahi Officers ofBirampur, Phulbari, Nawabganj and Parbatipur of the Dinajpur District who have signed the No ObjectionCertificates, in favour of the Project.

This is one of the largest privately funded projects in Bangladesh and the Company will ensure that the mine isdeveloped according to best practice principles and that the environmental and social impacts are addressed toboth Bangladesh, World Bank and IFC standards.

Gary LyeChief Executive OfficerAsia Energy Corporation (Bangladesh) Pty Ltd


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Environmental & Social Impact Assessment (ESIA) of Asia Energys Phulbari Coal Project Executive Summary

Final ReportApril 2006

Executive Summary Page - i

TABLE OF CONTENTS

ES 1.0 INTRODUCTION TO THE PROJECT........................................................................................1ES 1.1 Background Overview..................................................................................................1ES 1.2 Project Location and Physical Characteristics..............................................................4

ES 2.0 PROJECT JUSTIFICATION AND BENEFITS ........................................................ ...................4ES 2.1 Need for the Project .....................................................................................................4ES 2.2 Benefits of the Project ..................................................................................................7

ES 3.0 THE PROPONENT AND MINE LEASES...................................................................................8ES 3.1 Asia Energy..................................................................................................................8ES 3.2 Mining Leases..............................................................................................................8

ES 4.0 LEGAL STATUS OF PROJECT AND COMPLIANCE ..............................................................9ES 4.1 Environmental Clearance by the Government of Bangladesh......................................9ES 4.2 Compliance with Laws, Conventions, Guidelines and Policies.....................................9ES 4.3 Compliance with International Conventions, Guidelines and Policies..........................9

ES 5.0 CONSULTATION ........................................................... ............................................................9ES 6.0 ALTERNATIVES CONSIDERED IN MINE DESIGN................................................................11ES 7.0 THE PROJECT ............................................................. ...........................................................12

ES 7.1 Project Overview........................................................................................................12ES 7.2 Coal Mine Establishment............................................................................................15

ES 7.2.1 Infrastructure Relocations and River Diversion........................................15ES 7.2.2 Mine Infrastructure....................................................................................18ES 7.2.3 Land Requirement and Acquisition...........................................................18ES 7.2.4 Mine Construction.....................................................................................21

ES 7.3 Coal Mine Operations.................................................................................................21ES 7.3.1 Aquifer Dewatering, Clearing and Topsoil Stripping.................................21ES 7.3.2 Overburden Removal ...............................................................................21ES 7.3.3 Coal Mining..............................................................................................22

ES 7.4 Coal Handling and Treatment ....................................................................................22ES 7.5 Coal Transport............................................................................................................24ES 7.6 Plant and Equipment, Workforce and Operational Hours...........................................24ES 7.7 Water, Waste and Hazardous Materials Management...............................................24ES 7.8 Rehabilitation and Final Landform..............................................................................26ES 7.9 Ancillary Development................................................................................................26

ES 8.0 BIOPHYSICAL IMPACTS........................................................................................................28ES 8.1 Soil, Land Use and Land Capability Assessment.......................................................28

ES 8.1.1 Soil ...........................................................................................................28ES 8.1.2 Land Use and Capability ..........................................................................28

ES 8.2 Air Quality...................................................................................................................28ES 8.3 Noise, Blasting and Vibration.....................................................................................29ES 8.4 Mine Water Balance...................................................................................................29ES 8.5 Surface Water ............................................................................................................29ES 8.6 Groundwater...............................................................................................................31ES 8.7 Visual Assessment.....................................................................................................33ES 8.8

Biodiversity.................................................................................................................33

ES 8.9 Greenhouse Gas (GHG) Emissions...........................................................................34


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Executive Summary Page - ii

ES 9.0 SOCIO-ECONOMIC IMPACTS................................................................................................34ES 9.1 Some Facts about the Affected Community...............................................................34ES 9.2 Land Acquisition.........................................................................................................36ES 9.3 Population Displacement............................................................................................36ES 9.4 Livelihoods and Income..............................................................................................36ES 9.5 Social, Community and Cultural Practices .................................................................39ES 9.6 Impacts on Infrastructure and Services......................................................................39ES 9.7 Health and Safety Impacts.........................................................................................39ES 9.8 Impacts on Cultural Heritage and Graveyards...........................................................40ES 9.9 Vulnerable Groups.....................................................................................................40ES 9.10Host Community Impacts...........................................................................................41

ES 10.0CUMULATIVE IMPACTS.........................................................................................................41ES 11.0RISK ASSESSMENT ............................................................. ..................................................42

ES 11.1Risks, Uncertainties and Opportunities ......................................................................42ES 11.2Environmental and Social Residual Risks..................................................................42

ES 12.0MANAGEMENT PLANS ............................................................... ...........................................48ES 12.1Environmental and Social Action Plan (ESAP)...........................................................48ES 12.2Socio-economic Action Plan.......................................................................................49

ES 13.0PROJECT SUSTAINABILITY..................................................................................................49ES 14.0CONCLUSIONS.......................................................................................................................50 LIST OF FIGURES

Figure ES.1: Project Location...................................................................................................................1Figure ES.2: Phulbari Coal Mine Footprint................................................................................................2Figure ES.3: Project Alternative Analysis for Coal Mining Justification and Method of Extraction..........12Figure ES.4: Mine Activities Schedule....................................................................................................14Figure ES.5: Extent of Mine Activities for Year 25..................................................................................16Figure ES.6: Mine Development Schedule.............................................................................................17Figure ES.7: Mine Infrastructure (End Year 3)........................................................................................19Figure ES.8: Land Resettlement Plan.....................................................................................................20Figure ES.9: Representative Mine Stages..............................................................................................22Figure ES.10: General Layout of Coal Handling Facilities......................................................................23Figure ES.11: Proposed Coal Transport Route......................................................................................25

Figure ES.12: Conceptual Final Land Use Plan......................................................................................27Figure ES.13: Mine Water Balance for Major Components....................................................................30Figure ES.14: Water Level Drawdown in Upper Dupi Tila Aquifer and Injection Borefield......................32Figure ES.15: Visual Landscape Assessment at End of Mine, South of Phulbari Township. .................33Figure ES.16: Resettlement Survey Status Map.....................................................................................35Figure ES.17: Extended Phulbari Township Land Use Plan...................................................................37Figure ES.18: Generic Village Plan........................................................................................................38Figure ES.19: Significance Assessment Matrix ......................................................................................42


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Executive Summary Page - iii

LIST OF TABLES

Table ES.1: Project Benefits.....................................................................................................................7Table ES.2: Summary of Stakeholder Consultation to Date...................................................................10Table ES.3: Key Project Parameters and Approval Schedule for the Phulbari Coal Project...................13

Table ES.4: Mine Activities.....................................................................................................................18Table ES.5: Habitat within Mine Footprint...............................................................................................34Table ES.6: Key Indicators of Households in 5 Kilometre Zone.............................................................34Table ES.7: Project Risks and Opportunities..........................................................................................43Table ES.8: Medium to High Level Environmental Risks and Responses..............................................46Table ES.9: ESAP Sub-Plans.................................................................................................................48


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Executive Summary Page - 1

EXECUTIVE SUMMARY

ES 1.0 INTRODUCTION TO THE PROJECTES 1.1 Background OverviewAsia Energy Corporation(Bangladesh) Pty Ltd (AsiaEnergy), under a contractualagreement with the Governmentof Bangladesh (GoB), hasexplored for coal and ispreparing to develop a coal minein the Phulbari area. Phulbari islocated about 350 kilometresnorthwest of Dhaka (Figure

ES.1). Feasibility studies haveproven a high quality coalresource that can beeconomically and responsiblymined.

A coal mine at Phulbari andassociated facilities andinfrastructure will make a majorcontribution to sustainableregional and nationaldevelopment, and contribute topoverty reduction, theoverarching policy objective ofthe government.

Local and regional benefitsdirectly attributable to theProject include public revenue, employment opportunities, development of infrastructure (rail/road,international port facilities), security of energy resource, reduced demand on declining gas reserves,improved access to sanitation, health and educational facilities, and training opportunities.Consequently, the proposal will have wide ranging effects on a local and regional scale.

The proposed Scheme of Development is to construct and operate an open cut coal mine and transportcoal products to domestic and international markets. A coal resource and coal reserve of 576 and 517million tonnes respectively have been identified and a maximum extraction rate of 16 million tonnes perannum (Mtpa) recommended. First coal will be extracted after approximately two years of minedevelopment, with coal production continuing for 36 years. The scheme can be separated into thefollowing components:

1. Mine Development and Operation

The mine development and operation areas include the mine, ex-pit overburden dump, associatedinfrastructure (coal preparation and handling facilities, and road, rail and river diversions) and bufferzone. The required area (Mine Footprin t) is shown on Figure ES.2.

Figure ES.1: Project Location


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2. Resettlement

As a result of mine development, the eastern extremity of Phulbari Township and the villages existingover the Mine Footprint will have to be relocated. This will require resettlement of existing householdsand businesses, land acquisition and replacement of existing infrastructure and services. The Projectrequires resettlement of 9,160 households (40,304 people) within the Mine Footprint and 600households (2,640 people) in host communities and transport realignments around the mine site.1

Aspects 1 and 2, encompassing an area of 5,933 hectares are collectively termed theProjectfor thepurposes of the Environmental and Social Impact Assessment (ESIA).

3. Coal transport

Coal will be transported to domestic and international markets. This will require upgrading railinfrastructure along the transport route and construction of a coal loading facility (Khulna), for shippingthrough the Bay of Bengal to international markets. A separate ESIA (SMEC 2006) for coaltransportation is currently being finalised.

4. Coal fired power station

Although the current scheme is to transport coal to domestic and international markets, Asia Energy isalso investigating the opportunity of developing a 500 megawatt (MW) coal fired power station usingPhulbari coal (Asia Energy 2005a). This will later be upgraded to 1000MW. A separate proposal hasbeen submitted to the GoB on 9th October 2005.

Project development will have social and environment impacts, which have to be credibly mitigated.Impacts will include dislocation and resettlement of over 40,000 people; potential marginalisation andsocial disarticulation; and temporary loss and disruption to livelihood, cultivable land, agriculturalproductivity, buildings, services, water resources and infrastructure. Other important impacts will

include lowering groundwater levels, land settlement, and noise, air and visual issues. To addressthese issues, comprehensive mitigation measures are proposed, which will eliminate or substantiallyreduce these potential impacts. Commitment is required from the mining company, GoB and financialinstitutions to ensure that mitigation measures outlined in the ESIA are diligently carried out.

This ESIA has been prepared in accordance with relevant World Bank (and its related InternationalFinance Corporation (IFC)) guidelines, including Equator Principles and IFC Safeguard Policies, WorldBank Environmental Health and Safety Guidelines and the World Bank Pollution Prevention andAbatement Handbook. The document presents a comprehensive Project description; an assessment ofpotential environmental, social and economic impacts; and the measures by which adverse impacts canbe mitigated or minimised, and beneficial impacts enhanced. Over 300 national and internationalspecialists, experienced in Bangladesh and/or mine development, contributed to the ESIA.

The environmental and social impacts associated with the development of the town extension and newvillages have been assessed in sufficient detail to demonstrate that viable relocation options areavailable. Further work will be required with GoB involvement in the development phase.

The ESIA is provided in four volumes:

Volume 1: Environmental Impact Assessment Volume 2: Mine Technical Reports Volume 3: Environmental Technical Reports Volume 4: Social Technical Reports

1Additional resettlement may be required in case of mine noise disturbance.


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ES 1.2 Project Location and Physical CharacteristicsThe Project site is located in northwest Bangladesh, 350 kilometres from Dhaka and within the Phulbari,Nawabganj, Birampur and Parbatipur Upazilas of Dinajpur District (Figure ES.1).

Phulbari is a small town, served by the nationalhighway, north-south railway network, and anairport at Syedpur, 40 kilometres to the north. Therailway town of Parbatipur, 18 kilometres north ofPhulbari, is a major rail junction with links to India.

The Project is located on the Barind Tract, anelevated plateau region with a height of 25 to 32metres above sea level. Due to the slightlyelevated nature of the Barind Tract, the StudyArea is not prone to frequent flooding. Average

temperatures range from a maximum of around 33degrees Celsius in summer to a minimum of 10degrees Celsius in winter. Rainfall occurspredominantly between late May and October, with average annual rainfall of approximately 1,800millimetres.

The Little Jamuna River, and Khari Pul and Nalsissa rivers are located to the west and east of theproposed mine site, respectively. None of these watercourses have extensive catchments and they arenot connected to any major river system. The Khari Pul River drains into Ashoorar Beel, an importantwetland and local fishery (Figure ES.2). Other wetlands occur within the Study Area. Several remnantsof regenerated native sal forest are present within the largely agricultural landscape, but are outside theMine Footprint. There is a regionally extensive groundwater resource overlying the coal.

Photo ES.2: Sal forest Photo ES.3: Rice irrigation

ES 2.0 PROJECT JUSTIFICATION AND BENEFITSES 2.1 Need for the ProjectBangladeshs limited energy resources and low level of commercial energy consumption have beenidentified as critical bottlenecks to improving the countrys economy and reducing poverty. Bangladeshis also characterised by low levels of foreign and/or domestic industrial investment, a high level ofdeforestation and a lack of competitive export products. Limited energy resources and poor exportearnings greatly contributed to Bangladeshs trade deficit. By developing one of the largest andshallowest proven coal resources in Bangladesh, the Phulbari Coal Project has the potential to assist

Photo ES.1: Phulbari Townsh ip


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with the improvement of the countrys economy by providing a high quality energy resource for local andinternational consumption, as well as providing significant export earnings to the Bangladesh economy.This is one of the largest private developments of its kind in Bangladesh and has the potential to bringsignificant benefits to the nation, in particular to the strategic development of west and northwestBangladesh. Mining of the Phulbari coal resource would also support the governments objective ofpoverty reduction through planned economic growth and social development.

It is considered that the Project is justified as it meets important national needs, helps to satisfy local,regional and international demand for coal, decreases the nations dependence on natural gas, and,with the implementation of mitigation measures, has social and environmental acceptability.

1. Supports GoB ObjectivesMining of the coal resource at Phulbari would strongly support the GoBs objectives and the aspirationsof its people that collectively seek poverty reduction. Coal mining would increase economic growththrough private investment and through direct and indirect employment. It would also provide anavenue for moving the GoB closer to its universal electrification goal by providing good quality thermal

coal which could underpin growth in coal-fired electricity generation. This would attract new industriesand provide an opportunity for replacing imported inferior coal in the brick-making industry. Projectdevelopment would also stimulate improved social and human development through improvedinfrastructure for education, communications and public health. It would employ a viable professionalworkforce in the largely rural northwest of the country.

2. New Local Energy AlternativeEnergy consumption in Bangladesh is predicted to rise substantially over the next 10 years. With theGoB commitment to the provision of rural electrification, and the current reliance on imported petroleum

and biomass fuel to make up the energy shortfall, there is an urgent need to locate and develop localenergy alternatives. Phulbari coal, which has generally low sulphur content and high calorific value,offers a reliable and long-term energy alternative to supplement existing energy reserves. It also offersa part solution to environmental damage caused by destruction of trees for fuel.

Due to diminishing known gas reserves, coal development has become an urgent issue in Bangladesh.Project development could play an important role in supplementing energy sources, especially innorthwest Bangladesh. With the forecast depletion of known gas reserves by 2019, the Project wouldprovide vital diversification from predominantly gas-fired power stations and could thus extend the lifeof gas reserves.

3. New Source of ElectricityWith the proposed power station of 500MW (later upgrading to 1000MW), the Project has the potentialto underpin substantial base-load electricity generation in Bangladesh and accelerate private sectorinvestment in infrastructure and services for at least 30 years. A 1000MW power station represents a20 percent increase over the 2003 installed capacity, and would provide 10 percent of Bangladeshsforecast electricity demand in 2015. This would contribute significantly to Bangladeshs ability to meetfuture power demand, particularly in the northwest. It could substantially assist in rural electrificationand poverty reduction through encouraging private sector growth in power generation plants andenabling improvement in social and human development.


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4. Export and Domestic MarketsDue to the proximity of the Project to burgeoning international markets, the Project thermal andmetallurgical coal will be domestically and internationally cost competitive against other coal suppliersto the Asian region.

Air quality throughout Bangladesh has been significantly degraded due to the use of low quality (highsulphur) imported coal and significant environmental benefits can be realised by replacing existing coalsupplies with low sulphur Phulbari coal. Environmental considerations will be particularly important inlight of new domestic legislation (which requires imported coal to have less than one percent sulphur).

5. Economic ConsiderationsAsia Energy will invest around US$3 billion over the life of the Project in capital on the mine and powerstation, and an additional US$10.4 billion in operating costs. According to GHD (2006), the Project will

generate more than US$21 billion in economic benefit to Bangladesh and will add one percent a year(US$0.7 billion/annum) to Gross Domestic Product (GDP). The direct effect on GDP is anticipated to beUS$7.8 billion and indirect multiplier effects of US$13.7 billion. Payments to the GoB will exceed US$7billion. Substitution of imported to local coal will save US$3 billion over the life of the Project. SomeUS$310 million will be spent on village resettlement and relocation of part of Phulbari Township (GHD2006).

Coal mining would provide opportunities for increased economic growth by stimulating privateinvestment and employment opportunities. It is estimated that the Project will employ some 2,100persons during construction phases. When fully operational about 1,200 will be long-term employed atthe mine and another 450 on barging and shipping operations. Assuming a multiplier of 10 additionaljobs for each person employed, this equates to 16,500 new jobs.

Although there would be a cumulative loss in volume of traditional agricultural production in the MineFootprint over the life of the mine, Johansen & Sani (2006) concluded that this would be more thancompensated by in-pit backfilling, an increase in agricultural production due to improved agriculturaltechnologies, and by the value of forage and tree production on the rehabilitated areas.

6. Regional Transport ImprovementsProposed rail, port and shipping upgrades will have significant regional and international developmentbenefits by providing export access to west and northwest Bangladesh, plus neighbouring land-locked

countries such as Nepal. It will bring in industries that rely on goods transport, with attendantemployment and development opportunities. As a result of the Project, a total of US$314 million will bespent on rail and port development to provide a reliable export route.


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ES 2.2 Benefits of the ProjectThere are likely to be environmental and social impacts resulting from the mine; however proposedmanagement strategies will mostly mitigate these impacts to acceptable levels. At the same time, theProject will produce tangible benefits that will accrue to the district and the nation. Project benefits are

summarised inTable ES.1.

Table ES.1: Project Benefits

Project Benefits

The Project is one of the largest privately funded projects in Bangladesh. Being privately funded, there willbe no need to divert funds from existing government programmes and activities.

The Project will contribute to the development of a major mining province in Bangladesh and make availablean important coal resource.

The Project will replace imported poor quality coal with locally mined and better quality coal. The Project will reduce the reliance upon biomass (including trees and other vegetation) for energy, thereby

resulting in benefits to the environment.

The Project will stimulate and strengthen local and regional economies and provide opportunities for povertyreduction through planned economic growth of industrial, local cottage manufacturing and service deliverydevelopment.

The Project will provide training and development opportunities for professional, technical, skilled andunskilled local communities.

The Project will accelerate the pace of sustainable economic and social development; raise standards ofliving by improving local and regional road, rail, power, communication, reticulated water supply andsanitation; and improve community infrastructure and health facilities.

The Project will strengthen the macro economic performance of Bangladesh by: reducing reliance on imported diesel fuels for power generation; providing an internationally traded commodity for export; providing a stimulus for foreign investment; generating foreign exchange and savings; and providing direct payments to the government through royalties and taxation.

The Project will enable a diversification of the local economy from agriculture to include mining and serviceindustries.

The Project will provide the opportunity for a new mining industry in Bangladesh. The Project will create a stabilising effect on the local currency, as a result of export revenue. The Project will strengthen the banking sector with the advent of new forms of capital market activity. The Project will construct improvements to infrastructure that may provide spin-off benefits and a platform

upon which other private sector development projects can come to fruition.

The Project may provide the energy source for coal fired power plants to assist in meeting Bangladeshsforecast electricity demand. This has significant benefits, including:

provision of power to areas not presently serviced; a higher energy resource security; and providing an alternative for diversification of power generation

(currently predominantly gas-fired);

reduction of the pressure on diminishing gas reserves; and facilitation of more investment as supply becomes more secure.


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Project Benefits

The Project may reduce poverty through employment opportunities, including: creation of up to 1,200 direct long-term mine operational jobs; creation of significant numbers of jobs during the mine construction phase; and creation of spin-off or indirect employment as a result of the operation and construction of the mine.

This could be up to ten times the actual mine related employment.

The Project may improve living standards through training and educational capacity. The Project may improve the position of women through the creation of employment, providing opportunities

for women to participate in the consultation process and providing improved infrastructure.

The Project will create a new extended township and new villages, with improved infrastructure and facilities. The Project will provide all season irrigation water to affected farmers enabling them to have extra crops. There will be improved understanding of the ecological values of the area. The Project will provide opportunities to re-establish ecological systems and endemic habitats.

ES 3.0 THE PROPONENT AND MINE LEASESES 3.1 Asia EnergyExploration licences for the Project are held by Asia Energy Corporation (Bangladesh) Pty Ltd (AsiaEnergy, the Proponent), a fully owned subsidiary of Asia Energy PLC (incorporated in England andWales in September 2003). Asia Energy Corporation Pty Ltd holds the Investment Agreements, andAgreements for the Exploration and Mining of Coal with the GoB (Contract No. 11/C-94). Asia Energy

PLC owns all issued share capital of Asia Energy Corporation Pty Ltd. The Contract permits AsiaEnergy to undertake exploration and mining of coal in northern Bangladesh.

In April 2004, Asia Energy PLC raised US$14 million and was admitted to trading on the AlternativeInvestment Market of the London Stock Exchange. The raised capital was immediately used to embarkon the feasibility study and planning of the Scheme of Development for the Project.

ES 3.2 Mining LeasesSome mining leases and exploration licenses for the Project are held by Asia Energy Corporation

(Bangladesh) Pty Ltd. Asia Energy holds Mining Lease B and Exploration Licenses G and H (seeFigure ES.2). Approvals for Exploration Licenses I2,T, and J to Q (co-products)3, Mining Lease U,the conversion to a Mining Lease of Areas G and H, and agreement with Barapukuria UndergroundCoal Mine (for the location of the box cut outside Asia Energys lease areas), are pending.

2It is understood that the Phulbari Coal deposit extends South into area 13Exploration licenses J to Q are for co-products within the mine overburden, thus they overlie areas within the Mine Footprintalready covered by coal mine and exploration leases.


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ES 4.0 LEGAL STATUS OF PROJECT AND COMPLIANCEES 4.1 Environmental Clearance by the Government of BangladeshThe primary legislation for the environmental approval of projects in Bangladesh comprises theEnvironmental Conservation Act (1995) (Amended 2000 & 2002) (ECA) and the EnvironmentalConservation Rules (1997)(ECR). The Project is classified as Red under the categorisation system ofthe ECR, as it is deemed to have potentially significant environmental issues. Application forEnvironmental Clearance for a category Red project is a two-part process:

application must first be made for an Environmental Site Clearance (ESC). To obtain an ESC,an Initial Environmental Examination (IEE) must be prepared by the proponent and submittedto the Department of Environment; and

after an ESC has been granted, the proponent must submit an Environmental ImpactAssessment (EIA) to the Department as per the Terms of Reference approved in the IEE,together with an application for issuance of an Environmental Clearance Certificate (ECC).

Asia Energy submitted its IEE on 10th February 2005. The Department of Environment (DoE) issuedthe ESC on 29th March 2005. An EIA was subsequently submitted on 30th July 2005, with the requestto approve the EIA and issue an ECC in favour of Asia Energy. The Department granted anEnvironmental Clearance Certificate for mining activities planned over the Mine Footprint on 11thSeptember 2005. With this approval, compliance with DoE guidelines regarding EnvironmentalClearance is complete. The Departments consent conditions have been reviewed and incorporatedinto the Project plan and design.

ES 4.2 Compliance with Laws, Conventions, Guidelines and PoliciesAn assessment has been undertaken of the application of Bangladesh law to this Project. Permitsand/or actions to be attended to by Asia Energy prior to Project commencement and during theoperation of the mine to comply with legislative requirements have been identified. At the current stageof Project planning and development, Asia Energy is in compliance with GoB legislation and policies.

ES 4.3 Compliance with International Conventions, Guidelines and PoliciesBangladesh is a signatory to a number of international conventions. Project planning and design hasconsidered these conventions and incorporated all relevant aspects. The Project is considered to be incompliance with international conventions.

ES 5.0 CONSULTATIONAn open and informed consultation process was initiated at the commencement of the ESIA process,with the overall objective being to ensure that the stakeholders and affected communities have been:

kept informed about Project proposals and developments; afforded the opportunity to express their concerns and views; and assured that their concerns, views and suggestions will be taken into account in the planning

and decision-making process.

Stakeholder consultation has been comprehensive, extensive and intensive, with approximately 34,000household interviews conducted. A summary of consulted stakeholders is provided in Table ES.2.


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Table ES.2: Summary o f Stakeholder Consul tation t o Date

Stakeholder Category Acti viti es Undertaken for EIA/SIA Preparation

National Level Consultations with representatives of: Government Departments: Department of Environment (DoE); Bureau of Mineral Development

(BMD); Department of Public Health Engineering (DPHE); Roads & Highways Department (RHD).

Boards: Bangladesh Power Development Board (BPDB); Bangladesh Water Development Board(BWDB); Bangladesh Telegraph and Telephone Board (BTTB).

Other Government organisations: Petrobangla, Bangladesh Council of Scientific and IndustrialResearch (BCSIR); Bangladesh Atomic Energy Commission (BAEC).

Divisional Level District Level

Consultations with DoE, Bogra Consultations with: Deputy Director, Youth Development; Executive Engineer, Barind Tract

Multipurpose Development Authority (BMDA); Divisional Forest Officer, Executive OfficerBangladesh Agricultural Development Corporation (BADC); Deputy Director, Department of

Agriculture Extension (DAE); District Education Officer, Department of Higher and SecondaryEducation; District Primary Education Officer, Department of Primary Education; District LivestockOfficer, Directorate of Livestock Services; Executive Engineer (RHD); Executive Engineer, PublicWorks Department (PWD); Deputy Director, Bangladesh Rural Development Board (BRDB);Executive Engineer & Superintendent Engineer (DPHE); Deputy Director, Department of Social

Service; Assistant District Fisheries Officer, District Fisheries Office, Adjutant, Ansar VDP,Regional Manager Palli Darirda Bimochaon Foundation, (PDBF); Programme Officer, Departmentof Women Affairs; Regional Maintenance Officer , District Controller of Food; Assistant Director,District Family Planning Office; District Assistant Engineer, Education Engineering Department;Chief Engineer, Power Development Board (PDB); Land Acquisition Officer, DC Office.

Upazila NirbahiOfficer (UNO)

PhulbariPaurashava

Consultations with four UNOs in the study area (Birampur, Nawabganj, Parbatipur, Phulbari). Consultations with the Council of Phulbari Paurashava. Ward-wise meeting with each of the nine wards in the Municipality. Undertaking a town planning survey of over 4000 holdings in Phulbari Paurashava.

Upazila Officials Consultations with 346 upazila government officials in the four Study Area upazilas. Union Parishad Consultation with eight union parishads located in the 5 Kilometre Zone (Khanpur, Joypur,

Golapganj, Hamidpur, Aladipur, Daulatpur, Khayerbari, Shibnagar unions).

Villages 24 ward-wise village consultations held within Joypur Union (six wards); Khanpur Union (sixwards); Golapganj Union (four wards); and Hamidpur Union (two wards); 38 meetings with resettler and host area households on the selection of resettlement villages 115 villages documented via the Village Checklist. 49 villages in eight Unions and Phulbari Paurashava, and five SMEs, covered by case studies for

the Socio-Economic Assessment.

Individualhouseholds &businessenterprises

Household survey: Interviews with 21,202 households in the 5 Kilometre Zone to gatherdemographic and basic socio-economic information. This demographic survey is ongoing until late2005.

Resettlement Survey: Interviews with 12,780 households and 1,524 business enterprises duringthe Resettlement Survey to gather information on compensation and resettlement preferences.

Interviews with 837 host area households Health Impact Assessment: Interviews with 341 individuals as a part of the qualitative stage of the

HIA process. An additional survey of 2436 households took place during the quantitative stage.

Group Discussions 12 group discussions have been held to date with specific groups of Project-affected peopleincluding women, farmers, landless, indigenous groups and various associations including thePhulbari Transport Workers Association, Phulbari Town Business Association and Uttar LasmipurBazaar Business Association.

56 group discussions as a part of the HIA process. Funding agencies World Bank/IFC, ADB NGOs Bangladesh Environmental Lawyers Association (BELA), Christian Commission for Development

in Bangladesh (CCDB), Adventist Development and Relief Agency (ADRA), Thengmara MohilaSabuj Sangha (TMSS), Caritas, Health, Education and Economic Development (HEED), WorldConcern, Swakalpa Society, Pallisree, ASA, BRAC.

Other Various other organisations. These are identified in the PCDP included at Volume 4 of the ESIA.


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The consultation process has identified a number of key issues, including: scope and status of theProject; land acquisition and compensation; resettlement; livelihood restoration and employmentopportunities; local infrastructure and services; protection of natural resources and the environment;community relations; and social and economic benefits. Each of these issues has been considered andaddressed as far as practicable in the design of the Project and in the development of Project mitigationand impact management measures. For those issues that have been raised that are unrealistic,information has been provided to stakeholders in an attempt to manage these expectations.

ES 6.0 ALTERNATIVES CONSIDERED IN MINE DESIGNFigure ES.3 shows the process used to assess the preferred mine development option. The primaryProject objective and development proposal is to economically mine coal reserves within the PhulbariBasin.

Embedded within this main objective are a number of supporting objectives including:

extracting most of the coal resource to ensure economic gains to Bangladesh, the miningcompany, stockholders;

developing the Project in open consultation with the community and all stakeholders; minimising impacts on the environment and the community; and implementing an Environmental and Social Action Plan.

The main outcomes of the consideration of alternatives are as follows:

The Deposit (coal resource) is fixed to the Phulbari Basin. There is no alternative mine site. Open cut mining maximises Project benefits in comparison with underground mining. Due to

depth, thickness, geological shape and geotechnics of a coal seam, the open cut method wasidentified as the only technically viable option that would meet the Projects primary objective.

The mine will commence from the north and proceed south. Comparison between the north-south and south-north options indicate that the depth to coal is less in the north, requires 26percent less area for ex-pit overburden dump, impacts on 10 less villages (containing 667households and 92 ethnic families), and less graveyards and religious buildings. The northoption is also further away from the environmentally sensitive Ashoorar Beel. In addition, thenorth-south option would allow continuous mining into the inferred coal resource in Area I,subject to GoB approval.

Stakeholder discussion considered various mining options, such as encroachment of mine and dumpson settlement areas; proximity and location of areas of significant conservation; areas of archaeological,religious and ancestral (graves) significance; river diversion; location of mine infrastructure, especiallynoise generators; rehabilitation plans; mine equipment; water management; land acquisition;

compensation; loss of agricultural land; and flooding.

An example of a significant change (September 2005) to Project design is the modification in the minepath to avoid most of the eastern part of Phulbari Township, reducing total resettlement by 25 percentbut with loss of some 20Mt of the coal resource. Similarly it was decided to use coal conveyors andacoustically designed haul trucks, which will dramatically decrease noise emissions, but at aconsiderably increased capital cost.


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Figure ES.3: Project Alternative Analysis for Coal Mining Justification and Method of Extraction.

ES 7.0 THE PROJECTES 7.1 Project OverviewA summary of the Projects key parameters and approval timetable is given in Table ES.3. A mine andassociated activities schedule is shown onFigure ES.4.

The Project proposal is to develop and operate an open cut mine and associated operations over anarea of approximately 5,192 hectares (see Figure ES.1). With addition of the resettlement villages,town extension and new road and rail corridor, the total land requirement is 5,933 hectares. The minewill be located east of the Little Jamuna River, commencing north of Phulbari Township and movingsouthwards. Approximate dimensions of the Mine Footprint are nine kilometres long and between fourand eight kilometres wide. The Project will operate for approximately 38 years with coal extraction up to16 million tonnes per annum (Mtpa) over 36 years.


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Key elements of the proposal include:

implementing a staged resettlement plan; realigning the existing railway and affected roads and utility services; realigning the Khari Pul River; installation and operation of mine dewatering and aquifer injection systems; installation of a water distribution system to adjoining agricultural areas and settlements; constructing mine related surface facilities including coal handling and water management

infrastructure, coal washery, workshop, offices, worker amenities and utility services;

open cut operations and overburden (or waste rock) emplacements (ex-pit and in-pit); environmental protection measures, including noise bunds and buffer areas; and progressive rehabilitation.

The extent of mine activities is shown on Figure ES.5.

Developing and commissioning the mine will take approximately two and a half years. Initial run-of-mine (ROM5) production will be approximately 1.5 Mtpa, increasing to 16 Mtpa ROM in Year 8. Coal will

be crushed, washed, and then loaded onto rail wagons for transport to regional centres of Bangladesh,to India or to a sea port for export. Some of the coal may also be trucked to local industries, such asbrick kiln operations. Co-products (sand, gravel, water, kaolinite, silica sand, hard rock, clay), within theoverburden may be extracted for commercial purposes, subject to GoB approval process.

Overburden dumps6and mined areas will be appropriately contoured, stabilised and rehabilitated assoon as practical. The ex-pit overburden dump will be up to 120 metres high, while mined areas willclosely approximate existing contour levels once rehabilitated. Post mine land uses will include amixture of agriculture, agro-forestry and natural habitats. The final void will be up to 250 metres deepand will naturally fill with groundwater on termination of dewatering activities.

A mine development plan is shown onFigure ES.6.

ES 7.2 Coal Mine EstablishmentES 7.2.1 Infrastructure Relocations and River DiversionA number of roads and the main north-south railway will need to be relocated prior to mining. Roadswill be located on levees to minimise flood risk and meet Bangladesh road construction requirements.Proposed relocations are shown on Figure ES.5.

Two branches of the Khari Pul River will be diverted around the northern and eastern part of the mine.

The diversions will total 14.4 kilometres, resulting in the abandonment of 10.5 kilometres of the existingwatercourse. The proposed diversions will help maintain environmental flows to Ashoorar Beel7.

5 Run of Mine (ROM) coal is the mined coal prior to processing.6 Overburden dump: Material is placed ex-pit (external to the pit) or in-pit (in the pit).7Major wetland with adjacent native sal forest in the Phulbari district


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Approximately 11 kilometres of track on the main north-south railway will be relocated. A new stationwill be constructed and passenger and freight access to Phulbari retained. It is planned to use the railnetwork for bulk deliveries of diesel, mining machinery and other materials to the mine and for coaltransport from the mine.

ES 7.2.2 Mine InfrastructureThe proposed Mine Footprint will cover an area of approximately 5,192 hectares (Table ES.4).

Table ES.4: Mine Act ivit ies

Act ivi ty Hectares

Mine pit 2,180

Ex-pit overburden dump 1,465

Mine infrastructure area 513

Infrastructure & buffer areas 1,034

TOTAL 5,192

Mine infrastructure will mostly be in place within the first three years of mine development, as shown onFigure ES.7.

The Project will require a large number of deep dewatering tubewells to operate in and around theperimeter of the mine to maintain safe working conditions and mine stability. Peripheral dewatering,water supply to the eastern part of Phulbari Township, final design for irrigation supplies andconstruction of aquifer injection bores are due to commence in early 2006.

As the mine develops, overburden will be used to construct earthen bunds around various parts of themine. Excess material will be deposited to form a 120 metre high ex-pit overburden dump. Noise

bunds (15 metres high), flood diversion levees (three metres high) and visual mounds (five metres high)will progressively be constructed around the mine and infrastructure periphery.

Mine facilities will mostly be located in the Mine Infrastructure Area in the south western part of the site,and will include offices, worker amenities, maintenance workshops, fuel unloading and storage facilities,water management systems, utility services, mine power plant, internal roads, security fencing and coalhandling facilities. Coal handling infrastructure will comprise an interim rail laydown facility, an elevatedconveyor to transport coal from the pit to the infrastructure area, coal crushers and crushed coalstockpile, coal handling preparation plant (CHPP) where coal will be washed, product stockpiles and railload out facilities. The explosives storage facility will be located between the eastern mine path and ex-pit overburden dump.

ES 7.2.3 Land Requirement and AcquisitionMost of the required land will be acquired under specially drafted legislation. Some early private landsale is required to commence mine dewatering drilling and preparation of the first resettlement village.Land ownership is planned for completion at the end of Project Year 1.

The affected 9,760 households will be resettled in seven distinct phases over a ten year period (FigureES.8). Some other households may require movement due to noise disturbance. The phases are ingeneral sequential conformity to the mine land occupation plan (see Figure ES.6) and will coincide withthe development of the extended Phulbari Township and new planned villages. The processes and

procedures followed for land acquisition and population resettlement will be in accordance with thedetailed Resettlement Plan that has been prepared for this Project.


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ES 7.2.4 Mine ConstructionIn the lead up to mine development, a number of pre-mining activities will be carried out. These willinclude: purchase of land; establishing a rail siding and construction village; advanced mine dewatering;road, rail and stream deviations; installation of an irrigation system to supply Project-affect farmland;

land clearing; bund construction; mine infrastructure construction and box cut development.

Infrastructure relocation will take approximately three years. Permanent coal handling facilities in theInfrastructure Area will begin operation at the beginning of Year 4.

ES 7.3 Coal Mine OperationsMine operations will commence in the north and progress to the south. The early objective is to minedown to the coal floor as quickly as possible with minimum overburden mining. Overburden miningcommences in Year 2. Coal is first produced in Year 3, with production ramping up from 2.5 Mtpa to 16Mtpa in Year 8. The primary disposal site for overburden waste to Year 6 is the ex-pit dump, after which

there is sufficient room in the pit to begin infilling (in-pit dumping) the mined areas. Both in-pit and ex-pitoverburden dumps are used to the end of mining. The maximum coal production of 16 Mtpa continuesto Year 27, and then declines until mining ceases in Year 38. The progression of the mine andapproximate time frames are presented inFigure ES.6.

Mine operations will broadly occur in the following sequence: aquifer dewatering, clearing and topsoil stripping; overburden removal; coal mining; and rehabilitation of mined areas and overburden dumps. This will occur progressively throughout

the life of mine.

ES 7.3.1 Aquifer Dewatering, Clearing and Topsoil StrippingAquifer dewatering will occur throughout the mines operational life. Deep dewatering tubewells will beinstalled progressively some distance in front of the southward advancing mine as closer sacrificialtubewells are destroyed. There will be approximately 80 to 100 dewatering tubewells operating at anyone time. Aquifer injection, to reduce the extent of water level drawdown away from the mine, will beprogressively installed five kilometres from the pit and then operated throughout the life-of-mine.

The proposed mining area is flat and used predominantly for rice production. Depth of topsoil and clay

from the surface is up to nine metres. Initially the top 20 centimetres of topsoil will be stripped andstockpiled, but later be placed directly onto areas being rehabilitated. The sub-soil layer will also beremoved and separately stockpiled to facilitate placement back in the soil profile when required.Stockpiles will be managed to protect soil health and prevent soil erosion. Trees occurring in the MineFootprint will be harvested and provided to the surrounding community. Other vegetation will beremoved in accordance with GoB requirements.

ES 7.3.2 Overburden RemovalNear the end of Year 1, major mining equipment will start excavation to remove overburden over thecoal seams. Approximately 4,400 million loose cubic metres (Mlcm) of overburden will require removalover the life-of-mine. Overburden will be used on-site for construction and rehabilitation, or placed onthe surface east of the mine (ex-pit), or in the mine (in-pit). The ex-pit dump will extend over some


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1,465 hectares and reach approximately 120 metres high. Approximately 30 percent of all overburdenwill be dumped ex-pit; the remainder will be deposited back into the mine pit.

ES 7.3.3 Coal MiningThere are five coal horizons, divided into 11 coal seams. Individual coal seam thickness varies from 20to 40 metres, with a cumulative total thickness of up to 73 metres. Coal from the thick and extensiveUpper and Main seams will mainly be targeted. Once the coal is exposed, mining will be undertakenusing a fleet of dozers, hydraulic excavators and haul trucks. Most coal will require blasting. The coalmine will slowly move southwards at a rate of approximately 200 metres per year. The depth of the pitwill generally be between 250 and 300 metres for the life of the mine.

Representative mine stages at Year 14 and Year 38, are shown on Figure ES.9. At Year 14 coalextraction is at a maximum of 16 Mtpa and rehabilitation has commenced on the in-pit dump. At thefinal stage of mining (Year 38), rehabilitation works over both in-pit and ex-pit dumps will be welladvanced, with a final void remaining in the south of the mining pit.

On termination of mining, the dewatering pumps and injection bores will be turned off. Groundwaterinflow will progressively fill the final void to create a water lake of approximately 696 hectares.

Mine of Mine Year 14 End of Mine Year 38

Figure ES.9: Representative Mine Stages

ES 7.4 Coal Handling and TreatmentCoal handling and treatment will include crushing, conveying, treatment, stockpiling and exportingvarious quality coal types from the site. Coal handling facilities are shown onFigure ES.10.

Coal will be hauled from the pit by truck to nearby primary and secondary crushers. Following crushing,the coal will be fed onto an overland conveyor, which will transport coal to a tertiary crusher andstockpiles near the Coal Handling Preparation Plant (CHPP). The overland conveyor eliminates theneed to truck the coal to the CHPP, significantly reducing potential noise and air quality impacts.


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HAN

DLING

ES

10.


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The CHPP uses conventional technology to remove stone and reduce the ash and sulphur content ofthe coal. Depending on its characteristics, processed coal will be placed in three product stockpiles:export thermal, domestic thermal or metallurgical. Some of the coal may not require washing, eitherbecause it is to be sold to local markets or it meets the requirements for export grades. Washed coalrejects will be returned to an overburden dump.

Coal products will be sold from the mine gate or conveyed to one or two over-rail surge bins, which willload moving trains.

ES 7.5 Coal TransportCoal from the proposed mine will be transported to domestic and international markets. Some coal willbe sold at mine gate and for mine-mouth power station consumption, however the majority will betransported by rail to other parts of Bangladesh, directly to India or to a sea port for shipping tointernational markets. This will require upgrading rail infrastructure along the transport routes, andconstruction of a coal loading facility (Khulna), for shipping through the Bay of Bengal to international

routes. The proposed coal transport route is shown onFigure ES.11.

At peak mine production it is anticipated that:

0.5 million tonnes (Mtpa) of coal will be collected by truck from the mine gate and used locally; 2.5 Mtpa of coal will be transported by rail to local sidings in central Bangladesh and/or used

for local power stations;

4.0 Mtpa of coal will be transported by rail to Indian markets; and 8.0 Mtpa of coal will be transported by rail and ship to international markets.

More coal can be used for local power stations if required, with a subsequent reduction in export. It isanticipated that 1.0 Mtpa will be returned to the mine as reject material.

ES 7.6 Plant and Equipment, Workforce and Operational HoursThe geology and geometry of the coal deposit are ideal for a truck and shovel mining operation. Otherplant and equipment will include backhoes, haul trucks, drills, track dozers, front end loaders, gradersand water carts.

It is anticipated that approximately 2,100 persons will be employed during mine construction, comprisingboth skilled and unskilled workers. The mine will operate 24 hours per day and 365 days per year. Theaverage directly employed workforce will be about 1,200 persons. Under Contract No. 11/C-94, at leastthree quarters of the workforce will eventually have to be Bangladeshi.

ES 7.7 Water, Waste and Hazardous Materials ManagementA Water Management Plan has been prepared to provide the principles and procedures for thecollection, storage, transport, use, treatment and disposal of surface water and groundwater duringmine operations. The aim of mine water management is to minimise the impacts of mining operationson the natural water balance of the region. The water balance model indicates that the mine will haveexcess water throughout the year.


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The mining operation will produce a variety of waste products, the vast majority of which will be soil,sand and rock for removal to the overburden dumps. Other likely waste products include coal washeryrejects; sewage; contaminated runoff; oils and grease; hazardous wastes such as batteries, cleaningchemicals, solvents and acids; inert solid wastes such as tyres, wood and metal wastes; and domesticwastes such as food, paper and plastic. The Waste Management Plan sets out how wastes will beresponsibly dealt with, including an estimate of waste quantities and measures to monitor, reduce, re-use and recycle wastes.

Hazardous materials used and stored on the mine site will include distillate and Heavy Fuel Oil (HFO),explosives, solvents, acids, paint, cleaning materials, pesticides, herbicides and acid mine drainage(AMD) materials. A Hazardous Materials Management Plan has been prepared that details themeasures for the safe storage and handling of hazardous materials likely to be used on-site.

ES 7.8 Rehabilitation and Final LandformProgressive rehabilitation of the overburden dump and mined areas will be undertaken over the life of

the Project. Rehabilitation will be done according to a land use plan, the conceptual design is shown onFigure ES.12.

The final Project landform will generally consist of:

native and agro-forests on rehabilitated ex-pit overburden dump; in-pit overburden dump and other disturbed areas contoured to pre-mining levels with

development of sustainable agricultural pursuits; and

a final void up to 250 metres deep that will fill with groundwater on cessation of dewatering.The final landform will include a 14 kilometre long wildlife corridor from the rehabilitated, 120 metre high

ex-pit overburden dump, past the mine lake, to the remnant sal forest and wetlands of Ashoorar Beel.

ES 7.9 Ancillary DevelopmentThe ESIA addresses in detail the development and operation of the Phulbari coal mine. However, someancillary development will be necessary to bring the Project to fruition, namely:

the design of the western extension to Phulbari Township and resettlement villages; and the construction of coal transport infrastructure. The proposed transport route will use the

existing rail network, supplemented by upgrades and new rail sidings, a new port and coalbarge loading facility at Khulna, and floating transfer facilities on the Pussur River near the Bayof Bengal.

These ancillary developments are largely outside the direct control of Asia Energy and requiresignificant GoB involvement, commitment and operational management.

An ESIA for Coal Transportation is now being finalised (SMEC 2006). It concludes that the majority ofimpacts could be effectively controlled through the implementation of a range of standard mitigationmeasures.


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ES 8.0 BIOPHYSICAL IMPACTSES 8.1 Soil, Land Use and Land Capability AssessmentES 8.1.1 SoilPrior to mining, topsoil will be progressively removed from approximately 4,300 hectares of land andstockpiled for later use in rehabilitation. Removal and preservation of topsoil will be critical forrehabilitation works, as it contains organic matter, seed supply, and readily recyclable plant nutrients.

Potential impacts on stockpiled soils include water and wind erosion, depletion of oxygen, loss ofstructure through compaction, depletion of nutrients, reduction in beneficial soil micro-organisms andweed infestation. A detailed Soil Management Plan has been prepared that addresses the aboveimpacts.

ES 8.1.2 Land Use and CapabilityThe majority of land in the Mine Footprint is used for agricultural purposes, with villages, towns andsome plantation forests scattered throughout the landscape. Project development will necessitatechanges to land use, some temporary and some permanent.

As mining progresses, previously mined areas will become available for rehabilitation, resulting infurther changes to land use. A Project Rehabilitation and Closure Plan has been developed, whichdescribes the planned changes to land use arising from the rehabilitation process. The ex-pitoverburden dump will not support rice cultivation. Instead, it is proposed that the dump shouldultimately comprise a mixture of permanent native forest and agro-forestry. The in-pit overburden dumpwould be initially suitable for cash crop agriculture and/or agro-forests, and eventually returned to rice

production after land settlement and stabilisation.

ES 8.2 Air QualityOutside the monsoon season, baseline sampling indicates maximum ambient concentrations in theareas outside Phulbari Township are close to, or exceed, the GoB residential standard. Therefore, anyincrease in ambient concentrations is likely to result in an increased frequency of the standard beingexceeded. Project emissions are likely to increase the number of days where ambient PM10(24 hour)concentrations exceed the GoB standard. Until background concentrations can be reduced, satisfyingthe GoB standard would preclude almost any development that generates particulate matter emissions.

An alternative approach would be to allow the development of key projects that include theimplementation of all reasonable and feasible emission control measures. The GoB could combine thisapproach with an overall air quality improvement programme for the region that would also aim toreduce emissions from other sources to best achievable levels. An Air Quality Management Plan hasbeen prepared to address the above impacts. The plan includes an effective series of emissions controland management measures that are currently being used on similar coal mines in Australia and theUnited States of America, and are considered international best practice.


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ES 8.3 Noise, Blasting and VibrationWorld Bank guideline values for environmental noise were adopted as Project Noise Objectives, whichare lower than GoB criteria. An assessment of potential noise impacts from the Project found that noiseimpacts would exceed the Project Noise Objectives during construction and operation of the CHPP; the

haulage of overburden from the initial box cut; mining operations when the mine is next to Phulbari;trucks transporting coal from the mine to the local market; and ex-pit overburden dump operations.

With Project mitigation measures in place, modelling results indicate that noise impacts from the Projectwill generally be below the Project Noise Objectives. The exceptions are:

northern areas of eastern Phulbari Township during the operation of the interim coal out-loading facility. Activities associated with this facility will need to be proactively managed withreduced activity levels during the night time period, particularly in the winter time when noiseenhancing inversion conditions are present; and

from the haul road between the mining pit and the infilling of the infrastructure area, in thesouthern and eastern areas of Phulbari. These impacts can be appropriately managed byrestricting use of the haul road to day time in the initial stages of the Project, priority

resettlement for most affected residences and early development of the noise bunds.

A Noise and Blasting Management Plan has been developed as part of the Project Environmental andSocial Action Plan (ESAP), to ensure that noise impacts are controlled.

ES 8.4 Mine Water BalanceA mine water balance and flow model for both dry and wet seasons for the median rainfall scenario isshown on Figure ES.13and indicates that the Project will have excess water throughout the year.Based on various climatic and mine water demand scenarios it is assessed that during the wet season a

large quantity of groundwater and treated surface water (about 400 to 800 ML/day) will need to bedischarged off-site into nearby watercourses, primarily the Little Jamuna River. During the dry seasonthere is sufficient clean water available to supply irrigation for two crop rotations in the affected area,continuous aquifer injection, and town and mine domestic water requirements. A combined clean andtreated water excess of 100 to 230 ML/day will be available for riparian use, river discharge purposesand possibly water demands for the coal fired power station.

The mine water balance indicates little variation in water availability in the dry season for the variousclimatic scenarios.

ES 8.5 Surface WaterThe Phulbari area is located on the elevated Barind Tract, which is outside the major flood areas ofBangladesh. The mine will be protected from floods by a peripheral Project bund, consisting of a threemetre high flood levee, 120 high metre ex-pit overburden dump, five metre high visual mounds and 15metre high noise protection bunds. Hydrology modelling indicates that for a 1 in 100 Year AverageRainfall Intensity event, villages and transport corridors are not expected to be inundated by theresultant 0.2 to 0.3 metre increase in flood waters due to the presence of the Project bund and westernextension of Phulbari. Land settlement to the north of the mine may increase flood levels, howevervillages are 0.6 metre to one metre higher than the current agricultural floodplain and unlikely to beimpacted by a major flood event.


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NA=NotAssessed


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Khari Pul River will be diverted east of the ex-pit overburden dump. During construction, and until thenew channel is stabilised, there is potential for increased erosion in the diverted section of the river andincreased turbidity downstream, with associated impacts on aquatic biota. The diversion willincorporate a range of in-stream habitat features such as still pools, areas of slack and fast flowingwater, and provision of ecological links such as fish passages. Long term impacts arising from diversionof the Khari Pul River are expected to be minimal.

Water containing high suspended solids in the mine pit, overburden dumps, coal stockpiles, processingareas, noise bunds, levees and other infrastructure will be collected and treated within the MineFootprint. Excess treated water will be released to nearby watercourses. During the wet season,discharge of treated water is expected to have a negligible impact on water volume or quality ofreceiving surface water bodies. Increased volumes of water in river channels during the dry seasonmay be beneficial for aquatic biota, and downstream farmers. However, it is also important to maintainnatural seasonal variations and flow velocities for biodiversity maintenance.

Encapsulation of acid mine drainage (AMD) materials is common in coal mining operations. Withimplementation of standard mitigation measures, it is considered unlikely that AMD will occur. The

design of leachate capture from the overburden dumps is being finalised.

Effluent discharges from sewage, mining and coal processing operations, and runoff from plant andequipment maintenance areas may contain pathogens, oil, grease, chemical residues and acid minedrainage leachate. These discharges will be collected, appropriately treated and preferentially reusedon-site.

ES 8.6 GroundwaterTo maintain dry and safe working conditions in the open cut mine, aquifers require dewatering andaquitards need to be depressurised. Due to mine dewatering activities, water level drawdown will form

an irregular ellipsoidal shape with water level declines in excess of 10 kilometres from the mine. Thiswould reduce groundwater availability to Phulbari Township, surrounding villages and local farmingcommunities within the given area of influence. Groundwater drawdown may also impact onbiodiversity, wetlands and rivers in the surrounding area. Significant mitigation works will be required toreduce water level impacts on the surrounding community. These include:

Aquifer Inject ion: Computer modelling indicates that repressurisation of the Upper Dupi TilaAquifer through a radial injection system (tubewells or infiltration trenches), some four to fivekilometres from the mine site is a viable method of groundwater level control, subject to fieldtrial verification. Water level drawdown due to mine dewatering activities would be restricted tobetween the mine and injection area, as shown in Figure ES.14. The source of clean waterwould be from the mine dewatering system. If the aquifer injection was installed in a ringedconfiguration around the mine, the Priority Areas for Biodiversity Conservation (Ashoorar,Mollar, Hashkhola and Pakoria beels and Madhyapara, Ashoorar and Rambhdrapur SalForests) would be protected from mine dewatering impacts. An additional benefit is that waterlevels close to the injection zone should not suffer from the current dry season fluctuations,thus groundwater from shallow tubewells should be available throughout the year.

Af fected and Resettl ement Vil lages: Deep tubewells will be constructed to supply reticulatedwater to existing villages affected by Project dewatering activities and resettlement villages.Water supplies will be typically managed by village water committees and financed by themine.

Phulbari Township: Reticulated water supply, waste water and sanitation will be supplied toboth the eastern and western parts of Phulbari Township. Water will be delivered through highlevel tanks connected to the mine dewatering system. Systems will be operated by the

Department of Public Health Engineering with the mine supplying the water, reticulationsystem, equipment replacement and operational costs.


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Water Supplies to Irrigators: Between the mine and injection borefield, some irrigators willlose water from their shallow tubewells, especially in the dry season. In the wet season rainfallirrigation is practiced. Depending on the degree of water level drawdown and distance fromthe mine, reticulated water will be delivered to affected farmers by large diameter pipelines andtrenches/canals from the mine dewatering system; or by construction of new deep tubewells.Sufficient water from the dewatering operation is available for the piped delivery system in thedry season (216 ML/day) for two irrigated crop rotations, thus allowing three crops per year.The irrigation system will be operated by the Barind Multipurpose Development Authority andnon-government organisations (NGOs), in partnership with the mining company.

River Discharges: The preferred watercourse for disposal of excess dewatering water is theLittle Jamuna River, due to its larger catchment and higher natural flows. Water release to theKhari Pul River will maintain riparian flows.

A Water Management Plan (including both surface water and groundwater) has been developed as partof the Project ESAP to ensure that the water issues are appropriately implemented, managed andreported.

ES 8.7 Visual AssessmentThe Project will alter the current landscape of low relief agricultural use to a large operating mine withex-pit overburden dump, noise bunds, levee banks, coal stockpiles and associated infrastructuredevelopments. In the early stages, there will also be significant construction activity, which willdominate the landscape for about three years. Visual impacts will become less prominent as moundsare constructed and rehabilitated with trees. In the longer term, following completion of mining, the ex-pit overburden dump will appear as a forested hill, linking landscape areas around the final void andforested corridors further south to Ashoorar Beel. The remaining area will be developed for agriculturalpursuits. Figure ES.15 shows the end of mine landscape (wet season) from south of PhulbariTownship looking fro

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phulbari coal mine executive summery by asia energy