Mineral Sands Ltd and Paranthan Chemicals eye upswing via PPP
Sri Lanka will be enhancing mineral sand and chemical exports by adding value to it under an ambitious plan to restructure Lanka Mineral Sands Ltd (LMSL) andParanthan Chemicals Factory, a cabinet memorandum prepared by the Prime Minister’s office revealed.
The Ministry of Industry and Commerce has recommended restructuring these two state owned enterprises (SOEs) on Public Private Partnership (PPP) basis.
Cabinet approval has been sought for this purpose as these state owned entities are currently running at a loss and the Treasury has to share the burden of the monthly salary bills of employees.
LMSL has already mined a massive stock of mineral sands over the past 50 years along the beach from Pulmoddai on the east coast exhausting mineral sands and therefore the company is not making much money at present.
The Cabinet Committee on Economic Management (CCEM) has granted approval to call for requests for proposals for both these and report back to CCEM.
The committee has also recommended that a cabinet appointed negotiation committee be set up to negotiate the two deals.
Sri Lanka has the potential of cashing in on the export of mineral sands by refining it to Ilmenite, Rutile and Zircon at its Pulmoddai plant with limited human resources and expertise, officials of the LMSL told the Business Times.
The present production is now limited to 6000 tons of ilmenite,1,800 tons of Rutile and 600 tons of Zircon compared to larger quantities earlier.
LMSL is not in a position to enter into value added production such as making Titanium dioxide used to make Titanium, the valuable metal of the present and future, as it has no financial and human resources as well as necessary expertise, they disclosed.
According to the cabinet memorandum the only option is to enter into a joint venture with local or foreign investors to produce value added mineral products. LMSL currently exports mineral sand to Russia, Japan, US and the UK.
Employees note that modification and upgrading of the present plant in Pulmoddai has been completed, and the company is contributing large sums of money for national coffers but it cannot carry out its functions with maximum productivity due to lack of human resources and other facilities.
Mineral sand deposits are found along the eastern coastal belt from Mullaitivu to Pulmoddai and from there to Kotuwakambi. This is one of the most treasured natural resources of Sri Lanka.
Currently-defunct Paranthan Chemicals Factory, the Sri Lankan chemical pioneer in Kilinochchi, is also to be revived under PPP.
The factory was established in 1954 as the Government Chemicals Factory but was destroyed due to terrorism in 1985.
According to the Minister of Industry and Commerce Rishad Bathiudeen, a sum of Rs.525 million has been earmarked to restart work on the factory.
The factory has the capacity to produce Sri Lanka’s total Chlorine requirements domestically thereby saving foreign exchange of around US$900,000 per year that is spent to import Chlorine. The factory can obtain its required salt from the Elephant Pass salterns.