Sri Lanka fails to achieve ‘Black Gold’ export targets
Lanka Mineral Sands Ltd established as a fully state-owned company 29 years ago has still not been able to generate sufficient foreign exchange to the country from what-should-be lucrative mining, processing and sales of mineral sand known as ‘black gold’.
The aim of converting the company with the processing plant set up near the Pulmoddai coastal belt in 1958 to a state-owned company in 1992 was to harness maximum benefit from mineral sand containing Ilmenite and Rutile which are mainly used for the production of Titanium Dioxide.
However, the company has failed to achieve its objectives due to reasons such as absence of a proper marketing plan, determination of price without being based on the cost, failure in implementing proper standards in sales and not seeking direct buyers, the Auditor General’s recent report revealed.
Tender irregularities, corruption waste and political appointments to top posts were the other factors for the downfall of the company.
It has been expected to sell 113,996 metric tons of minerals of the company at a sum of Rs. 4,660.52 million in 2020, the report revealed. However, only 14,955 metric tons of minerals had been sold at a sum of Rs. 696.59 million during the year under review.
Although the company had obtained licenses for a period of 10 years from 15 August 2018 to mine mineral sands in the deposit in extent of 4.5 hectares in Thevikkallu area, action had not been taken to commence mining activities even by March 2021.
In 2012, the company acquired 17.6 hectares of land in the mineral-rich Kokilai area and purchased machinery worth Rs. 39.34 million for the Kokilai project in the same year.
However excavation work had not been carried out in the area even by the end of 2020 as the required excavation permit had not been obtained, the report observed.
Further, all the assets purchased for the project were installed elsewhere in the Pulmoddai plant and remained idle and some machineries had been stacked idly in the warehouse, the report revealed.
According to the latest report of the Committee on Public Enterprises, the tender for the sale of 85,000 metric tons of ilmenite has been awarded to the third-placed bidder at prices of US$ 147 per ton instead of the buyer who had offered the highest price of $165 per ton of ilmenite.
It is observed that the officials of the company have taken steps to mislead even the Cabinet of Ministers several months ago.
The current price of a metric ton of ilmenite is close to $240. The committee focused its attention on the decline in sales in 2020 compared to the total sales in 2018 and 2019.