Elahi, Moriarty deal on Phulbari open-pit mining

Prime minister's energy advisor Tawfiq-e-Elahi Chowdhury agreed to build support in favour of open-pit mining, seemingly under mounting pressure from US diplomats.

A latest US embassy cable leaked by the WikiLeaks said US diplomats repeatedly put pressure on Bangladesh government to reopen the controversial Phulbari coal mine, which was closed following a violent protest.

James F Moriarty, the US ambassador to Bangladesh, held talks with the country's chief energy advisor last year.

In that discussion, Moriarty urged Chowdhury to approve plans by British company Global Coal Management (GCM) to begin open-cast coal mining in the country's Phulbari area, The Guardian newspaper reported.

In the cable, Moriarty also notes that Chowdhury informed him that the coal mine was 'politically sensitive in the light of the impoverished, historically oppressed tribal community residing on the land'.

The energy advisor, however, agreed to build support for the project through the parliamentary process, Moriarty said in the cable.

In a cable posted by WikiLeaks which was sent in July last year, Moriarty says he had urged Chowdhury to authorise coal mining, saying that 'open-pit mining seemed the best way forward'.

Later on in the cable, Moriarty privately noted: "Asia Energy, the company behind the Phulbari project, has sixty percent US investment. Asia Energy officials told the ambassador they were cautiously optimistic that the project would win government approval in the coming months."

On 26 Aug 2006, three boys, 'Salekin', 20, 'Tariqul', 21, and 'Amin', 13, were killed and more than 200 people injured in Phulbari when law enforcers fired shots on a peaceful demonstration protesting the open-pit mining proposed by the UK-based Asia Energy.

Asia Energy's shares crashed in a single day after news spread that Bangladesh had withdrawn its mining rights.

The company requested trading be suspended, on Aug 31, 2006, saying "Asia Energy PLC ("the Company") became aware this morning of press reports quoting a junior minister in Bangladesh stating that the Bangladesh Government is cancelling all the existing agreements with Asia Energy.

"The Company had not received any communication from the government to this effect. In view of this, the shares of Asia Energy were suspended from trading on the AIM (Alternative Investment Market) at 08:40 hrs (British Summer Time) this morning," the company added.

Asia Energy, however, later changed its name to Global Coal Management at the same time as maintaining that it was fully committed to the Phulbari Coal Project in Bangladesh.

On its website, GCM says, "It's a London-based resource exploration and development company with its Phulbari Coal Project poised for development once the government of Bangladesh provides approval."

A parliamentary watchdog on Nov 29 also recommended open-pit coal mining saying that open-cast mining was possible by ensuring effective water management, proper rehabilitation of the affected people and keeping environmental damage to a minimum.

When contacted by The Guardian, GCM declined to make any comment.