Indian companies to enter mineral mining here

Major Indian companies are to enter critical mineral mining in Sri Lanka taking advantage of the new national policy on mineral resources aimed at attracting foreign investors and/or technology holders to establish joint ventures with Sri Lankan partners.

Moreover, India and Pakistan have been provided market access to the mineral deposits with duty concession under the Indo-Sri Lanka Free Trade Agreement (ISLFTA) and Pakistan-Sri Lanka Free Trade Agreement (PSLFTA) with 100 per cent duty free for any machinery related to the business.

Several overseas companies mainly India and Australia have applied for mining licenses after the change in awarding criteria, State Investment Minister Dilum Amunugama disclosed.

Measures have been taken to promote foreign and local investment in the country’s mineral resources sector to enhance revenues, he said adding that the previous procedure of issuing mineral mining licences has been tainted with corruption.

The Geological Survey and Mines Bureau (GSMB) is drafting necessary policy and regulatory changes to sell the valuable mineral deposit to foreign companies for mineral explorations.

The new regulation gazetted under number 2313/37 in January 2023 and under 9(e) the mineral rights of the state have been changed by giving priority to the landowner to explore minerals or sell it to another party for exploration.

This sudden decision to promote widespread mining with foreign investment, may lead to unsustainable consequences, several environmentalists said.

Several Indian companies including Ola Electric, Hindalco Industries, and Gujarat Mineral Development Corporation are exploring the prospects of graphite mining in Sri Lanka, informed sources said.

The country has exported around 2,500 tonnes of graphite in 2023 valued at around US $6 million. Sri Lanka has graphite reserves of around 1.3 million tonnes, GSMB data showed.