Tatas to scout for coal in Bangladesh

India's Tata group, which plans to invest $2 billion in Bangladesh, wants to explore coal as a source of energy for its proposed steel and power plants in the country.

Coal, instead of natural gas, could be used as the primary source of energy for Tata's proposed 2.4 million tonne basic steel plant and 1,000 megawatt power plant.

The pre-feasibility study on the planned investment is now in the final stage and would be ready for submission by the end of the current month.

The group has sought licenses to explore coal mining blocks in northern Bangladesh where a number of coal fields, including the major Barapukria mine developed by China is located.

This was conveyed during talks on Wednesday between T Mukherjee, deputy managing director of Tata Steel and Bangladesh's State Minister for Energy Mosharraf Hossain.

He told the minister that Tata was "examining the possibility" of using coal as an energy source instead of natural gas at the proposed steel and power plants and they would carry out exploration through "open-pit system."

Tata wants to set up coal-powered plants instead of using natural gas. "A Tata expert suggested that the group should use coal as it is a better option," Mukherjee told the New Age newspaper.

Hossain in turn said it would have to follow all guidelines for such a venture and seek license from the government, adding the option would be good as it would put pressure on natural gas supply of the country once the Tata plants go into operation.