DEMONSTRATIONS AT COAL MINE TURN VIOLENT

UNCLAS DHAKA 005452 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ENRG EINV PGOV EMIN BG SUBJECT: DEMONSTRATIONS AT COAL MINE TURN VIOLENT ¶1. Police and the Bangladesh Rifles opened fire August 26 on demonstrators in Phulbari (Northwest Bangladesh) protesting UK listed Asia Energy Corporation's plans to begin open cast coal mining in the area. At least seven protestors were killed and 60-300 people were injured, according to reports. Police claim to have opened fire when the crowd brandished "lethal weapons" (reportedly ranging from pitch forks to machetes and bows and arrows),became unruly, and attacked police after police fired tear gas to disperse the crowd. The demonstration was organized by the National Committee to Protect Oil, Gas, and Mineral Resources, which has campaigned against the coal project. ¶2. Protests continued August 27 and 28, with protesters calling an indefinite hartal in the Phulbari area in protest against the police action and to force Asia Energy to abandon its business in Bangladesh. The Awami League has announced its support for the local hartal and called for a nationwide hartal on August 30. ¶3. Asia Energy's Chief Executive Officer, Gary Lye, expressed regret over the violence in interviews with the press and added that it was unfortunate that "unrepresentative outsiders" (referring to the National Committee) had come to Phulbari to cause trouble. Econoff was unable to reach Lye for comment, who was unavailable due to the ongoing disturbances. Lye had previously discussed his concerns about the National Committee with Econoff, claiming that residents in the area that would be affected by the mine strongly supported the project because of the economic opportunities it would bring to the area. Lye maintains that the National Committee is almost entirely made up of groups from outside the area who, for their own interests, have opposed Asia Energy's plans to develop coal in the region. ¶4. Asia Energy Corporation (Bangladesh) Pty Ltd is a wholly owned subsidiary of London listed Asia Energy Corporation. The company has an existing agreement with the BDG to explore for coal on the Phulbari site and develop any deposits. Asia Energy has determined that high quality coal exists in commercially significant quantities and presented a plan to the BDG in October 2005 to establish an open-cast mine to extract these deposits. Under the terms of its agreement, the BDG was to have acknowledged the feasibility report within 90 days, after which Asia Energy could begin mining. The BDG, however, has yet to take action on the report. Once mining begins, Asia Energy expects to import in excess of $300 million in U.S. heavy machinery and equipment for operating the mine. The Asia Development Bank is also reviewing funding proposals for significant rail and road upgrades from Phulbari to the port of Mongla near Khulna and improvements to the port. BUTENIS