Home » Sri Lanka precious mineral exploration goes haywire

Sri Lanka precious mineral exploration goes haywire

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Sri Lanka’s precious mineral exploration has become highly irregular activity from the issuance of licences for mining and till the end of exploration owing to corrupt and wasteful administrative practices of Geological Survey and Mines Bureau (GSMB).

It has been observed that Geological Survey and Mines Bureau (GSMB) was mishandling ongoing exploration of some private companies.

The Bureau receives 7% as royalty in mineral exploration. This royalty should be paid to the Department of Treasury.

But a senior treasury official confirmed that the seven percent royalty is not transferred to the Treasury. He also said that the amount received as the royalty is used to pay salaries and bonuses and, in some cases, to throw parties.

In that manner, a large amount of money due to the Government is misused. These parties are held in the guise of official duties or in the pretext of conducting religious programmes, he claimed. .

According to an audit report the GSMB must properly transfer the royalty to the Government. For the Yan Oya project, the relevant construction company still needs to pay the royalty for 1,343,810 cubic metres of earth and 3397 cubic meters of sand.

According to the 2019 Audit Report, royalties amounting to 26,876,200 rupees and 5433490 rupees, and 27,419,690 rupees for soil and sand have yet to be recovered.

The report also says that the royalty charged for graphite in 2016, 2017, and 2018 was 65 percent less than the approved royalty mentioned in the mining licenses, i.e.Rs. 1,427,174,239.00.

According to the audit report, the GSMB has stated that legal measures have been taken regarding the deduced royalty charged for granite.

“So far no proper graphite mining has been carried out. Mines in Kahatagaha and Bogala have not yet been properly operated.

To mine graphite, one has to dig down about 2000 feet underground. No excavation has been done to that extent yet.

The Government should definitely receive the 7 percent royalty for the mineral resources that we export. But as per section 17 of the Geology Act, the bureau has to generate its own income since its establishment as a bureau.

The income is generated from the money received after collecting the related fees and licence fees. But the bureau doesn’t just do bureau work. It maintains tsunami warning stations and conducts other inspections free of charge.

That costs a lot of money and the royalty is used for that. We only give a certain amount to the Ministry of Finance as royalty,an official of the bureau said.

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