Govt. wants mineral export a thrust sector; but red tape dampens the industry
Chamber Chairman Amal Jayasinghe. Pic By Akila Jayawardena
While many foreign investors are eyeing Sri Lanka’s rich mineral deposits that are available in its natural habitat, there is a lot of red tape that dampens the industry. With the advancement of technology, minerals can be value added and exported. Any local mineral mining company goes through eight government institutions to renew the permit license every year. The government of Sri Lanka must create a conducive environment for potential investors, industry experts stressed.
Last Wednesday the new Chamber of Mineral Exporters outlined a number of issues the industry is facing, during a media briefing held at the Cinnamon Grand Hotel in Colombo.
Vice Chairman of the Chamber, A.F.M. Farook told the Business Times that there is not much attention given to mining in Sri Lanka as the country does not have a big industry for mining. “Things are difficult because the mining industry is small. Minerals such as feldspar, clay, dolomite that are used in the ceramic industry in Sri Lanka, are done on a large scale. The construction industry needs river sand, metal and so on which are also done on large scale. But export minerals such as graphite, quartz, mineral sands, mica, and dimension stones is a very small industry,” he said.
The volumes are small, only because of the hurdles that are in place. The current export earning volume of US$65 million can be doubled, provided the necessary encouragement comes from the government and getting approvals is made easy, added Mr. Farook.
China shows a lot of interest in the Sri Lankan minerals Mr. Farook noted, while elaborating that China is looking to stockpile minerals anticipating certain problems going forward with the West. He also mentioned that Sri Lanka exports minerals to Japan, Singapore, US, Europe, Korea, Thailand, Malaysia, Taiwan and Australia.
During the media briefing Mr. Farook highlighted that accessibility to raw materials is the biggest challenge in the industry. “Acts and ordinances have to be in place to safeguard the minerals in the country. There is a framework, but the mineral rights are not yet implemented by the government. There is no proper survey on the mineral resources that are available in the country while not all minerals are given the due recognition in the global picture.”
Investors question the number of minerals and the quality of them. But there is no data that Sri Lanka can show. The government must make the investment environment more conducive for investors without having to go through eight government institutions to renew a permit every year. No investor would be interested to invest in Sri Lanka if red tape exists in the industry. Without the political will, nothing will move forward in the mineral resource industry. There needs to be clarity and a level playing field for all players in the industry, noted Mr. Farook.
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