• Seeks investors to develop technology for mineral processing purposes

Sri Lanka’s mineral industry is seeking investors to develop the required technology for mineral processing, as the country currently lacks such technology due to lack of funding, The Daily Morning Business learns. 

Speaking to The Daily Morning Business, Chamber of Mineral Exporters Vice Chairman F.A.M. Farook said: “We should attract investors to come and set up factories and processing plants in Sri Lanka. As the Chamber of Minerals, we have urged the Geological Survey and Mines Bureau (GSMB), the regulatory body, to take the lead in ensuring the accurate estimation of their mineral reserves.”

According to him, this information is crucial for attracting potential investors, as having concrete data on the extent of reserves, such as the number of millions of tonnes available, makes it easier to pitch investment opportunities. 

“When investors have a clear understanding of the available resources, they can plan and tailor their projects accordingly. Without this essential data, it’s unlikely that anyone would be willing to establish a processing plant,” he added. 

Moreover, attracting investors for the mineral industry will contribute to the gross domestic product (GDP) of the country and will also optimistically impact the overall socioeconomic factor, according to him. Farook believes that if a foreign investor sets up a processing plant, there will be technology transfer and employment creation, while other industries will also develop around this particular industry.

“There are so many other benefits to a country in setting up a manufacturing plant which helps in producing added value rather than just exporting the raw minerals, which has always been what the Government has been encouraging for the last 20 years as well. But suddenly, taking the decision to export the raw minerals does not sit well with us at all,” Farook explained.

According to the Chamber of Mineral Exporters, the Government takes 9% as royalty off the top and that is not from the mineral value, but on the export value, which, he claimed, is unfair. 

He added that nowhere in the world is royalty charged on the value-added product. “Royalty is usually charged on the pit head value of the mineral. After they buy the mineral from the mines, it is their labour, their electricity, and their machinery, which increases the value of the mineral by 3-4 times. At the point of export, the Government comes in and takes 9% off of it and says: “This is your royalty”, which is wrong,” he said.  

A recent TED talk by Ryan Rockwood, who is the General Manager of Puttalam Ilmenite Ltd. highlighted that the Sri Lankan Government takes 70% of the revenue from minerals. It’s apparent that the Government makes more money, not the private companies, Farook said.