$12 mln mineral processing venture comes to a grinding halt amidst tender charges
View(s):By Bandula Sirimanna
A project by a private consortium aimed at making optimum utilisation of 65,000 metric tons of mineral sand residue stock piled up at the Lanka Mineral Sands Ltd (LMS) at Pulmoddai since 2009 has been shelved following allegations that there was an attempt to sell this stock in bulk to the same company at a low price depriving the Treasury of Rs.1.7 billion, officials said.
The stock value was over US$ 25 million according to current estimates and there was potential to attract competitive price offers, they added.
A cabinet memorandum had been presented to grant approval to sell the non-magnetic heavy mineral concentrate at the LMS factory premises after the separation of ilmenite to sell it to the local Gold Medal Consortium at below the market price, they revealed.
Responding to a question raised by MP Anura Kumara Dissnayake in parliament recently Minister of Public Resources and Enterprise Development Dayashritha Tissera said that, “The Board of Investment has given its recommendations to follow any method to get rid of the stock without incurring a loss to the LMSL but I am waiting for the Cabinet approval, to make a decision following proper tender procedures”.
Non-magnetic heavy mineral was sold at $30 per metric ton before he took over the Ministry. But they have managed to sell the same at $393 having followed the tender procedures, he added.
The Ministry has credited Rs. 1.7 billion to the Treasury as dividends from the proceeds of this sale, a senior official of the Finance Ministry said.
However trade union officials at LMS alleged that the top level officers of the Public Resources and Enterprise Development Ministry have engaged in a game of what appears to be wheeler dealing to suit the Gold Medal Consortium owners who used to buy valuable mineral sand at a low price of $30 and $140 on several previous occasions.
They noted that the company could sell it at a price of $400 to $450 and earn a profit of $6.7million (Rs.850 million).
Clarifying the company position, officials of the Gold Medal Consortium said that they used to purchase non-magnetic heavy mineral in open tenders quoting their price which was very much lower than $140.
The company has also submitted a project proposal to set up a mineral sand separation plant at an investment of $2 million in the Eastern Province giving employment to at least 1,000 youths in the area with the aim of exporting value added mineral in order to bring foreign exchange to the country.
They had plans to purchase 10,000 metric tons of this mineral concentrate containing around 40 per cent of zircon, ilmenite and rutile and other minerals lying idle at the Pulmoddai factory premises. Some 60 per cent of the stock was raw sea sand with no monetary value, the officials told the Business Times.
This stock was to be used for testing purposes before purchasing machinery from Australia to separate mineral from sea sand, they said.
They said that Supreme Solution Pvt Ltd (the company which launched the satellite in China about two months ago) was involved in only supplying machinery to the Gold Medal Consortium and denied allegations that it was acting as a front company in the deal.
Officials said the company has received the BOI approval for its project proposal, and it had followed proper procedure and tendered their bids sticking to proper tender procedure.
But under the present circumstances it has no intention to go ahead with the project, they said.
Follow @timesonlinelk
comments powered by Disqus