Bangladesh sees no imminent setback

Bangladesh is unlikely to face any immediate effect for the coal export ban by Indonesia, the world's biggest thermal coal exporter.

This is due to the major sectors, namely power plants and brick fields, having stocks that will last two to three months, said insiders.

Indonesia's ban in January was for concerns that low supplies at domestic power plants could lead to widespread blackouts, which, Reuters says, unnerved global markets for the fuel and triggered energy security concerns in some major economies.

"We are yet to see any impact," said Falah Uddin Ali Ahmed, a major coal importer, citing that prices remained unchanged at local markets at Tk 16,000-Tk 17,000 per tonne.

He said Bangladesh imports nearly 35 lakh tonnes of coal from Indonesia every year, which was 43 per cent of the total requirement of about 80 lakh tonnes.

Most of the coal is used in brick kilns as burning of firewood for the purpose of baking bricks has been banned.

The rest goes to garment makers and the power sector, he said.

Ali said as much as 40 per cent of brick fields were not operational this year.

Besides, he alleged, a section of brick kiln owners use woods to bake bricks bribing officials at local administrations and law enforcers.

Shah Abdul Moula, project director of Payra 1,320 MW coal power project of Bangladesh-China Power Company (Pvt.), said they import coal from Indonesia and the daily requirement was now nearly 6,000 tonnes.

He said the power plant has more than 2 lakh tonnes of coal in stock for use in the next two months.

"We will observe the situation for a few more days," he said.

Officials said the power producer has a memorandum of understanding in place with Australia and if supplies from Indonesia faced any setback, it may consider importing coal from other sources.

Reuters reported that the Indonesian government had pledged to start a review of the ban on Wednesday but talks were postponed and energy ministry officials on Thursday said it was unclear when they might decide to end the ban.

An official at the Indonesia Coal Miners Association on Thursday said discussions were ongoing, it added.

Mosharraf Hossen, a coal importer, said if India continues to supply coal, any crisis here was unlikely to surface.

Coal imports from Meghalaya via Tamabil border of Sylhet division resumed nearly two months ago, he said.

"We will be able to cater to local demand if India continues to provide supplies," he said.

Khalilur Rahman, president of Bangladesh Brick Manufacturing Owners Association (BBMOA), said brick field owners stocked up on their requirement of coal in October and November before starting production.

He said the price of bricks increased by Tk 1,000 per thousand units due to an increase in coal prices in the international market in October last year.

Bangladesh needs around 1,500 crore bricks per year for construction activities.