Political crisis seen delaying Iluka mining investment in Sri Lanka
ECONOMYNEXT – Australian mineral sands miner Iluka Resources Ltd. has said Sri Lanka’s recent political crisis could delay its plans for investing in an ilmenite deposit on which it has been having talks with the government.
The company, one of the world’s biggest producers of minerals sands, said in a stock exchange filing a pre-feasibility study is underway on the Puttalam deposit on the island’s northwest coast, 170 kilometres north of the capital Colombo.
The study, including work packages relating to pre-mining or baseline conditions of the Puttalam deposit, is expected to be completed in the first half of 2019.
“Recent political uncertainty is expected to delay progress on achieving certainty in respect of fiscal arrangements,” the statement said.
It was referring to the political crisis triggered in October 2018 when President Maithripala Sirisena sacked Prime Minister Ranil Wickremesinghe, replacing him with former president Mahinda Rajapaksa, and dissolved parliament.
The crisis led to Sri Lanka’s credit ratings being downgraded.
The island’s supreme court overturned the decision in December saying it was illegal.
Iluka has been focusing on legal and investment terms for the development of the Puttalam deposit.
These include securing surface access rights, ministerial and other government approvals for any subsequent mining licence and reaching a deal with the government on fiscal and other arrangements that will apply to the project.