At a recent event organised by the American Chamber of Commerce in Bangladesh, Finance Minister Amir Khosru Mahmud Chowdhury said, “We are now moving towards open-pit coal mining in Phulbari and elsewhere because we have no other option.” However, 20 years ago, on August 30, 2006, four days after the Phulbari tragedy, the then BNP-led four-party alliance government signed a six-point agreement with protesters against open-pit coal mining. It explicitly agreed that no open-pit coal mining would take place anywhere in the country.
If the current BNP-led government believes that the country’s ongoing energy crisis justifies abandoning that commitment and proceeding with open-pit mining in Phulbari and elsewhere, it would be making a grave and dangerous mistake. To understand why, we need to recall why the people of Phulbari upazila in Dinajpur rose up against the proposed open-pit coal mining project in August 2006.
Why Phulbari resisted open-pit mining
Phulbari’s coal deposit was discovered by Australian mining firm BHP Minerals, one of the world’s leading mining companies. But given the area’s geological complexity, agricultural features, flood-prone terrain, network of rivers and canals, and dense settlement, BHP Minerals recognised the severe environmental and social risks of mining the deposit. So it did not proceed with mining and transferred the already expired exploration licence to the newly formed Asia Energy Corporation in 1998. Notably, this new company had no prior experience in coal mining.
Asia Energy (now part of GCM Resources Plc) planned to acquire 66.88 sq km of land for a large open-pit mine. According to the company’s EIA report, it began operations in 2004 and intensified them in 2005, running publicity campaigns across Phulbari, Birampur, Parbatipur and Nawabganj to build public support. But locals rejected the project due to its potential to destroy farmland and homesteads. They also objected to exporting the coal while Bangladesh received only a 6 percent royalty. In terms of livelihoods, food and energy security, and environmental protection, the project appeared to Phulbari locals as a threat, not an opportunity.
The movement
In February 2005, local residents formed the Phulbari Town Protection Committee, which was later expanded to include the surrounding villages and became the Phulbari Protection Committee. They organised petitions, demonstrations and hunger strikes. At their request, the National Committee to Protect Oil-Gas-Mineral Resources, Power and Ports joined the movement, giving it national momentum.
In March 2006, the committee organised a Dhaka-to-Phulbari road march. Meanwhile, Asia Energy intensified its publicity, lobbying and other efforts to win local support, but Phulbari residents remained determined to protect their homes and farmland.
On August 26, 2006, tens of thousands of people joined a blockade of Asia Energy’s office under the slogan, “No open-pit mining, no export, no foreign company.” The company was declared unwanted and given one day to leave. As the rally ended, the then Bangladesh Rifles (BDR) opened fire, killing three young protesters—Al Amin, Tariqul and Salekin. The killings triggered widespread protests: an indefinite strike was declared in Phulbari, while protests and expressions of solidarity intensified nationwide. For a while, Phulbari and surrounding areas effectively came under the people’s control.
On August 30, the government signed an agreement with the National Committee representing the people of Phulbari, accepting the protesters’ demands. At the time, it pledged that no open-pit coal mine would be developed anywhere in Bangladesh (including Phulbari), all agreements with Asia Energy would be cancelled, and the company would leave the area.
What Phulbari helped Bangladesh avoid
The Phulbari uprising protected more than a locality; it potentially saved northern Bangladesh from a major social, economic and environmental catastrophe.
The first issue concerns groundwater. The Phulbari-Boropukuria coal seams lie beneath an 80- to 120 metres thick Dupi Tila aquifer. Open-pit mining would require massive levels of groundwater pumping to keep the mine dry. In 2006, a government-appointed committee, led by energy expert Prof Nurul Islam, estimated that groundwater levels could fall across 314 sq km around the mine. Similarly, in 2012, the Mosharraf Committee (headed by former Petrobangla chairman Mosharraf Hossain) warned that tube wells, shallow pumps, and deep tube wells within a 27-km radius would no longer provide sufficient water for agriculture and domestic use.
Bangladesh’s geology differs fundamentally from many coal-producing regions. Elsewhere, the water table often lies below the coal seam, so mining coal does not require dewatering. But in Bangladesh, the water table lies above the coal seam. The Mosharraf Committee contrasted Phulbari with India’s Neyveli lignite mine, where the water table is below the coal seam, highlighting the fundamentally different water management challenge facing Phulbari.
The second conflict is displacement. Asia Energy estimated that at least 66.88 sq km of land would need to be acquired, including 54.28 sq km for the mine, thus displacing 12,312 families or 54,074 people. But the Mosharraf Committee estimated that the number affected could reach 10 lakh. If the project were to be taken up today, this number would be far higher, making resettlement even more difficult in densely populated Bangladesh.
The third concern involves agricultural land and food security. About 42.34 sq km of the required land, as outlined by Asia Energy, is agricultural. Mining would strip away the fertile topsoil, destroying centuries-old fertility. Another 26.4 sq km would be permanently lost to overburden dumping and water reservoirs—an area roughly the size of Dinajpur town, which the Nurul Islam Committee deemed unacceptable.
Employment constitutes the fourth point of concern. Despite acquiring nearly 67 sq km of land and destroying the livelihoods of a large number of farmers, residents and businesses, the project was expected to create only about 2,100 jobs initially and 1,200 in the long term. Moreover, the project’s specialised skill requirements meant few of those displaced would be deemed employable.
The fifth issue is the environmental impact of the project. The coal-bearing strata contain 2 to 8 percent sulphur, which reaches 20 percent in some areas. Mining could generate acid mine drainage, potentially contaminating groundwater and surface water with toxic heavy metals such as copper, lead and mercury. The Nurul Islam Committee noted that even the US, despite strong environmental institutions and regulations, has failed to prevent such pollution. Thousands of miles of rivers in several states of the country have been contaminated by acid mine drainage.
Corporate interests behind the renewed push
There is little doubt that open-pit mining would have severe social, economic and environmental consequences. People will still resist any attempt at open-pit mining. Still, attempts to gain public support for the Phulbari mine periodically resurface. The argument for it has now changed. Asia Energy once promoted the prospect of export earnings; today, the justification is for reducing dependency on imported coal.
Ironically, when Bangladesh was building its coal-fired plants, imported coal was promoted as a source of cheap electricity, despite warnings about health and environmental costs. Now that dependency on imported coal exists, it is being invoked to justify destroying farmland, water resources, and livelihoods to mine coal domestically.
Critics have warned of this bait-and-switch move for some time, wherein Bangladesh would first be encouraged to build coal-fired plants based on the promise of cheap imported coal and, later, the resulting import burden will be used to justify domestic mining despite the immense environmental costs. That warning is now becoming a reality.
The current government champions energy security and foreign exchange savings, but it does not adequately account for the enormous, long-term environmental and economic costs of mining—costs foreseen by multiple government-appointed expert committees.
There is also a clear corporate interest behind the renewed push. GCM Resources has never hidden its commercial stake in Phulbari. Despite having no legal approval to mine—only an expired exploration licence—the company has raised millions of pounds on London’s Alternative Investment Market. Before Bangladesh’s national election in February 2026, it raised another one million pounds on January 16 and 1.25 million pounds on February 11, telling shareholders that the funds would support its Phulbari-related activities.
Following the finance minister’s remarks, GCM’s share price surged, and the company welcomed the government’s position.
GCM has also signed an MoU and a $1 billion EPC contract with PowerChina, which has stakes in two Bangladeshi private coal plants: the 1,320 MW S.S. Power Plant in Banshkhali and the 350 MW Barishal plant, both interested in buying Phulbari coal. GCM has also hired Bangladesh-linked DGI Infratech to help secure government approval.
These connections make the corporate interests behind the renewed push for open-pit mining clearer, despite the potential costs to the country’s environment and economy. If the current BNP government prioritises these corporate interests over people and the environment, it will once again be on course to make a grave mistake.
Bangladesh has alternatives
The country has never lacked alternatives to coal-fired power. Existing coal-based plants are already incurring environmental and economic costs. Destroying vast areas of farmland, homes and water resources merely to provide those plants with cheaper domestic coal cannot constitute a sustainable energy strategy.
For Bangladesh, the priority should instead be domestic onshore and offshore gas exploration and rapid expansion of renewable energy. The more money and time we continue to spend on coal and LNG while neglecting these alternatives, the more difficult it will be to effectively overcome the ongoing energy crisis.
Kallol Mustafa is an engineer and writer who focuses on power, energy, environment, and development economics. He can be reached at [email protected].
Views expressed in this article are the author's own.
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