The government is advancing a profit-sharing arrangement to revive the stalled Phulbari coalmine in Dinajpur through open-pit mining, aiming to reduce costly coal imports and secure the nation’s energy future. The project offers landowners in Phulbari, Parbatipur, Birampur and Nawabganj upazilas ownership stakes, resettlement assistance, and land return after lease completion. Locals will receive lease payments, jobs, and infrastructure including housing, electricity, and water systems under the new structure.
Government’s Coal Strategy and Economic Targets
The initiative aligns with Bangladesh’s ten-year energy plan that seeks to cut reliance on imported fuels such as LNG, coal and petroleum products, which have been strained by global price volatility. The country imports roughly 20 million tonnes of coal each year at a cost of US$1.19 billion for fiscal year 2024-25. Phulbari’s reserves contain 572 million tonnes of high-quality bituminous coal, of which 475 million tonnes are considered mineable, and could replace up to 75 percent of those imports, saving billions annually.
According to local reports, the mine would produce 15.2 million tonnes annually once fully operational. Developing this resource supports energy-security goals because, at present, only Barapukuria Coal Mining Company Ltd operates in Bangladesh, extracting 15 million tonnes over 21 years via underground methods. Expanding domestic coal production could fuel new coal-fired power plants and lessen dependence on gas and oil plants that face fuel shortages.
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Profit-Sharing Model and Local Benefits
Local communities will own the coalmine rather than merely receiving rehabilitation benefits. Under the plan, they receive profit shares from mining operations, lease payments for their land, and employment opportunities. The Energy and Mineral Resources Division (EMRD) confirmed these terms after meeting with stakeholders that include coal-fired power plants. Asia Energy Corporation (Bangladesh) Pty Ltd, a GCM Resources plc subsidiary, previously submitted feasibility studies and proposed a 1 000-megawatt coal plant at the site.
The arrangement addresses past objections. Project progress stalled after protests by locals and environmentalists who cited inadequate compensation. The new framework aims to rectify this by making landowners direct beneficiaries. Development includes new town infrastructure, housing, and utility services for the local community.
Past Protests and Expert Recommendations
Previous protests centered on insufficient community arrangements. Experts now emphasize transparency and independent verification. Consumers’ Association of Bangladesh (CAB) adviser Professor M Shamsul Alam stresses the need for environmentally sound, corruption-free extraction with clear compensation and profit-sharing mechanisms. He recommends direct consultation with landowners to determine profits, lease payments, and other benefits before development begins.
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Energy expert Professor M Tamim advocates for an independent study through a third party to assess engineering and environmental challenges before open-pit mining at Phulbari. “Whoever develops the coalmine, knowing these challenges and working for their remedies are necessary,” says Mr Tamim, who is currently Vice-chancellor of Independent University, Bangladesh (IUB).
Potential Impact on National Energy Security
Phulbari represents Bangladesh’s largest coal reserve, equivalent to 70 trillion cubic feet of natural gas. With five coal mines holding a total of 2.0 billion tonnes, the project could change how energy is produced in the country. Market insiders estimate it could generate thousands of jobs and save foreign-exchange previously spent on imports.
