Phulbari coal, power crisis, and a dangerous revisionism

Regarding the Phulbari Open-Pit Coal Mining Project, the chief adviser's press secretary recently made a Facebook post suggesting that Bangladesh is facing a severe power crisis because coal at Phulbari was not extracted. He went further, implying that those who resisted the project are responsible for today's dependence on India and the resulting energy insecurity. When a press secretary speaks on a matter of such national importance, it is natural to expect the chief adviser to clarify his stance if the views expressed by his press secretary do not coincide with his. The reason for that is, the press secretary's post is not only misleading but also factually incorrect, historically distorted, and deeply unjust to a movement that remains one of the proudest examples of public resistance in Bangladesh's history.

The claim that Bangladesh would not have faced a power crisis had Phulbari coal been extracted is simply untrue. The proposed 30-year project by British company Asia Energy was based on open-pit mining, which would have required excavating vast areas of Dinajpur, destroying three-crop agricultural land across six upazilas in one of the country's most important food-producing regions. To reach the coal, underground water aquifers would have been permanently drained. Hundreds of thousands of people would have been forced from their homes, turning them into environmental refugees, many with nowhere to go but already overstretched cities like Dhaka. The environmental damage would not have been contained within Phulbari and its adjacent region. Given Bangladesh's dense network of rivers and wetlands, contamination would have spread far beyond the mining site, creating a cascading ecological disaster.

And in return for all this destruction, Bangladesh was offered only a six percent royalty. Eighty percent of the coal was earmarked for export. Even more absurdly, the plan included a railway line from Dinajpur to the project site to facilitate that export, with the cost to be borne by Bangladesh. In other words, the country would have lost land, water, food security, and livelihoods along with its coal resources, while paying to export its own coal abroad to ensure huge profit for the company. This was not development; it was an absurd project of a company to make super profit at the cost of unprecedented environmental destruction for the country, along with its loss of agricultural land and human catastrophe.

That is why people resisted. On August 26, 2006, more than a hundred thousand people gathered in Phulbari to protest the project. The then Bangladesh Rifles opened fire on the crowd. Three people were killed. Many more were injured. What followed was a mass uprising and protest across the country, which forced the then-government to retreat from signing the project with Asia Energy. Instead, the government signed the Phulbari Agreement with local people and the National Committee to Protect Oil, Gas, Mineral Resources, Port and Power as their representative just four days later, on August 30. Among local resistance movements in Bangladesh, Phulbari stands out not only for its scale but also for its global significance. It remains a rare example of a grassroots movement successfully stopping a powerful multinational project. To now blame that resistance for today's power crisis is to patronise that destructive project and to erase people's sacrifice, suffering, and democratic courage to uphold national interest.

Bangladesh's current energy crisis and import dependence did not emerge because coal was left underground in Phulbari. It emerged because of deliberate wrong policy choices. Over the past decade, the state pushed ahead with coal-based power plants such as Rampal, Payra, Matarbari, and Banshkhali despite sustained warnings that Bangladesh cannot afford to take the coal path to meet demand for power generation. Instead, the focus should be on investments in renewable energy and building national capability for domestic gas exploration. The past government did not listen; on the contrary, it adopted an expensive, environmentally risky, import-dependent energy model, increasing reliance on LNG (liquified natural gas) and imported coal under the Power System Master Plan (PSMP). When global prices rose, the consequences were inevitable, and ordinary people are now paying the cost. Environmental problems are also accumulating. Trying to rationalise another destructive coal project to supply coal to these problematic power plants will only deepen the crisis and disaster.

What makes the FB post even more alarming is that it tries to rationalise a problematic corporate operation. Asia Energy, now operating as GCM Resources, does not hold a mining licence in Bangladesh. The company's Phulbari project was effectively cancelled after the mass uprising of 2006. Since then, the licence has never been renewed. Yet, year after year, the company has continued to trade on the London stock exchange market by presenting Bangladesh's coal resources as its asset (GCM Resources PLC filings), despite having no legal right to mine them. Successive governments have acknowledged this reality on multiple occasions, but no serious attempt has been made to stop the illegal use of Bangladesh's natural resources in foreign financial markets.

It is imperative to investigate the network of beneficiaries of this illegal share market business. The reason is that, even without any licence, Asia Energy continues to enter into agreements with foreign investors, including Chinese companies, projecting Phulbari as a future mine. No visible action has been taken by the present government to challenge or halt these activities. These activities are not harmless technical lapses; they are a continuing breach. The timing of the press secretary's statement is also significant as it was posted only one and a half weeks before the company's annual general meeting held on December 17. The FB post written in English is likely to convince hesitant shareholders that Bangladesh's government may revive the Phulbari project. This is how speculative share prices are inflated—through political signalling and lobbying. That's why the government must officially clarify its position immediately.

Besides, it is particularly disturbing to hear pro-coal lobbyist arguments coming from an official of the government, whose chief speaks globally of "Three Zeros"—zero carbon emissions, zero unemployment, and zero poverty. Supporting coal expansion does the opposite. It worsens environmental risk, displaces communities, and locks a country into an unsustainable economic path.

The government's responsibility now is clear. It must respect public resistance against a disastrous project, and not rewrite history to please corporate interests. It must fully uphold the Phulbari Agreement, stop Asia Energy's illegal activities in foreign markets, withdraw the false and harassing cases against Phulbari organisers, and commit to energy choices that are environmentally sound, economically rational, and rooted in public interest. Phulbari is not just about coal. It is about whether truth still matters in policymaking, and whether people's interest and their struggles still count in the future of this country.

Anu Muhammad is a former professor of economics at Jahangirnagar University.

Views expressed in this article are the author's own. 

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