Lanka’s tough stance on permitting mineral mining for foreign companies
Sri Lanka will take a tough stance on granting permission for foreign companies to carry out mineral mining in the island with no new licences to be issued, Minister of Environment and Renewable Energy Susil Premajayantha said.
The necessary regulatory framework will be devised for this by amending the Mines and Minerals Act, he told Business Times adding that several licences were issued sometime back and that too will be evaluated on case by case basis.
Bogala Graphite Lanka, Kahatagaha Graphite Lanka and Rangala/Ragedara are currently carrying out mining while several other existing licence holders including MRL Graphite (Pvt) Ltd are engaged in mineral explorations, he added.
No Chinese or Australian company have been issued with new mineral mining licences in Sri Lanka, he emphasised.
He was responding to question on the recent move of a Chinese firm to enter into mineral sand mining field in Sri Lanka with the backing of a local company with connections to highly influential politicians.
China’s Demi Shenzen Co has recently submitted a proposal for mineral sand mining in 500 acre land around Pulmoddai in Eastern Coast, official sources revealed.
The company plans to manufacture Nano Titanium Dioxide from Pulmoddai mineral sands in a US$75 million mining project.
Minister Premajayantha said that he was not aware on any licence being given to this Chinese company.
He disclosed that even the licence issued to Bora Bora Resources Ltd, an Australian company, has been suspended.
Normally the Mineral Investment Agreement (MIA) has to be negotiated with the Secretary of the Ministry of Environment and Renewable Energy, he disclosed.
This is a legal prerequisite for exploration, mining and further development of mineral based industries with foreign and local private equity participation, he added.
The exploration for and development of minerals is governed by the Mines and Minerals Act and subsequent revisions. This Act is administered by the Geological Survey and Mining Bureau (GSMB).
One such licence holder, MRL Graphite (Pvt) Ltd (MRL), a Sri Lankan listed entity, is progressively working up exploration targets in 630 square kms in four areas of the country, a top official of the company said.
The company holds a 100 per cent interest over four projects known as Warakapola, Pujapitiya, Palinda Nuwara and Hikkaduwa. The projects cover historical workings within a known graphite province that produced large volumes of vein or lump graphite from he 1890’s to the 1930’s.
The MRL has spent approximately $1 million on exploration activities. This has been funded by way of investment from the parent company, MRL Corporation Ltd which has raised funds from its shareholders on the Australian Securities Exchange (ASX) to enable this investment in Sri Lanka, Managing Director of the company Craig McGuckin said in an e-mail communiqué to Business Times.
The company has conducted several geophysical surveys including a Fixed Loop Ground Electro-Magnetic survey within the Warakapola Project area and ground surveys within the Pujipitiya Project area, he revealed.
It will also conduct initial geological exploration mapping and provide reports on a number of the company’s licensed areas.
MRL has commenced drilling at its priority one area with the Warakapola Project and a number of the diamond drill holes planned is expected to be the deepest mineral exploration drill holes of this type drilled in Sri Lanka.
The company has introduced the latest technology tools and training for the measurement of down hole diamond core orientation and drill hole survey, he revealed.
In this first exploration phase the company employs approximately 16 to 23 full time and part time employees. Subject to additional funding be made available it will look to double this number over the next six months,
All employees are given a stringent safety training programme and the company has a full time Occupational Health and Safety (OHS) Officer.
The company has employed a very experienced senior geologist as well as two younger geologists. While engagement of foreign expatriates is kept to a minimum the company has recently engaged drilling, geological and technical experts to provide training and assistance to its geologists with a range of newly introduced survey and orientation tools not previously used in Sri Lanka, he disclosed.
Graphite is one of the main minerals mined and exported by Sri Lanka over the last 170 years and has ranked as an important export commodity similar to tea, rubber and coconut.
Sri Lanka’s graphite production is now approximately 5,000 tonnes per annum, with 40 per cent of the output coming from Bogala Graphite Lanka, 33 per cent from Kahatagaha Graphite Lanka and the balance from Rangala/Ragedara and others.
| Mining licences and rights
Companies seeking to get involved in mining must file an application in the prescribed format and pay the prescribed fee to Geological survey and Mines and Bureau (GSMB) who may grant an exploration licence which gives the holder the exclusive right to explore for all mineral categories authorised by the licence. The licence conditions also demand minimum exploration expenditure amounts from the holder. A licence is granted for two years after which it may be extended for further periods subject to the holder having met the minimum expenditure requirements and having submitted regular six monthly reports to the GSMB. Licences can be cancelled if the holder has contravened any terms and conditions attached to the licence. An exploration licence can be converted to a mining licence should exploration activities be successful. Amongst other things the applicant must submit an Environmental Impact Assessment, an Economic Viability Report and a Mine Restoration Plan when making the application. Existing mining exploration licence holders will be allowed to carry out their operations in the island. |