Bangladesh operates at least 7,000 megawatts of coal-fired power capacity, incurring an annual coal import bill of at least BDT 150 billion to keep the plants running. Successive geopolitical shocks, from the Russia–Ukraine war to Middle East conflicts, have repeatedly strained the country’s energy supply. Talks on easing a singular reliance on natural gas by mining domestic coal have recurred for decades. Successive governments, however, have backed away from taking decisive action for reasons that remain unclear. Political administrations across the spectrum have avoided a definitive ruling, a policy vacuum that energy experts say leaves vast coal reserves trapped underground while deepening import dependence.
An energy ministry working paper indicates that extracting 20 percent of the coal across five domestic mines would yield 1,564 million tonnes — equivalent in energy output to 40 trillion cubic feet of natural gas.
State-run Petrobangla currently imports vast volumes of liquefied natural gas to cover 25 to 30 percent of total gas demand. The government spent BDT 590 billion on LNG imports in the 2025–26 fiscal year and channelled a further BDT 146 billion as subsidies into the sector, underscoring the potential savings of domestic coal generation.
M Tamim, an energy expert and professor at Independent University, Bangladesh, said resolving the extraction debate requires an independent review. “The entire extraction management should be examined by an unaligned Bangladeshi third party,” he said. “If they determine the risks are limited and manageable, we proceed. If they find the risks prohibitive, we abandon domestic coal entirely. The proposal requires an honest examination. Engineering challenges shouldn’t deter decision-making, as every major project globally carries them.”
Of the country’s five known coal deposits, only Barapukuria is active. Petrobangla subsidiary Barapukuria Coal Mining Company Ltd extracts up to 950,000 tonnes annually from a field containing 390 million tonnes in remaining reserves. Cumulative production since operations began reached 16.46 million tonnes by the end of FY 2025–26.
The deepest coal mine, at Jamalganj in Joypurhat, lies between 640 and 1,158 metres underground and holds an estimated 5,450 million tonnes. Discovered by the Geological Survey of Bangladesh in 1959, the field underwent a feasibility study, but the state has taken no decision on extraction. Six decades on, Petrobangla has settled neither the mining methodology and technical requirements nor the involvement of foreign partners.
Three further deposits remain untapped. Dighipara in Dinajpur, discovered in 1995, holds 865 million tonnes; Khalashpir in Rangpur contains 685 million tonnes; and Phulbari holds 572 million tonnes.
Feasibility studies cover four of the five fields, yet the energy ministry has reached a final decision on none. Successive administrations launched multiple initiatives only to leave them unresolved.
Addressing the long-standing impasse, Maqbul-E-Elahi Chowdhury, a former member at the Bangladesh Energy Regulatory Commission, said: “From the outset, the primary constraint was a lack of technical capacity, followed by environmental concerns. We have yet to establish how to mine coal while protecting local ecosystems. With a firm policy stance, however, these resources could have been developed, and supplying domestic coal to power plants would have substantially cut foreign exchange expenditure.”
The government licensed Petrobangla to develop the 865-million-tonne Dighipara coal mine in 2005, following its discovery by the Geological Survey of Bangladesh. The Awami League administration initiated development work in 2018, when state-run BCMCL engaged a consortium of two German firms and an Australian company to conduct a three-year feasibility study. Submitted in 2020, the study recommended underground mining.
The report estimated recoverable reserves at 706 million tonnes, proposing an annual extraction rate of 3 million tonnes to yield 90 million tonnes over 30 years at $160 per tonne. Deeming that unit cost prohibitive, BCMCL commissioned UK-based firm DMT to review the findings.
The Khalashpir deposit in Rangpur, discovered in 1989, carries conflicting reserve estimates: BCMCL reports 685 million tonnes, while GSB assesses the reserve at 143 million tonnes. More than 35 years after its discovery, neither the energy ministry nor Petrobangla has determined its development path.
Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmood informed parliament on on April 2 that any decision on extraction would await a full feasibility study.
The Phulbari field in Dinajpur, discovered by BHP Minerals in 1997, holds an estimated 572 million tonnes, according to BCMCL. Developing the mine would require approximately $15 billion in capital and operating expenditure, an investment that could yield recoverable coal worth an estimated $83 billion at prevailing Barapukuria prices.
The proposed extraction method at Phulbari has provoked local opposition. In 2006, protests against open-pit mining resulted in three deaths and numerous injuries, as opponents warned the method would displace communities, destroy agricultural livelihoods and wreck the local ecosystem. The civil unrest forced the government to sign the “Phulbari agreement”, halting progress.
The project stalled for nearly two decades until the former interim government sought to revive open-pit mining to alleviate the national energy crisis. That move prompted energy experts and economists to caution the non-elected government against entering into such commitments.
UK-based GCM Resources disclosed a contract titled “Phulbari Coal Mine Infrastructure Construction and Overburden Stripping Contract” on its website on March 11, 2025. The agreement, signed with Power Construction Corporation of China (PowerChina), covers the development of the Phulbari open-pit mine alongside an integrated power plant with a capacity exceeding 6,500 megawatts. GCM’s local subsidiary, Asia Energy Corporation, maintains its presence in Bangladesh.