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Saturday April 20th, 2024

Sri Lanka analyzing financial capabilities of mining applicants – Minister

ECONOMYNEXT – Sri Lanka’s Board of Investment (BOI) is analyzing the financial capabilities of applicants who have requested for mining licenses after the awarding criteria were changed, State Investment Minister Dilum Amunugama said.

The Cabinet in August approved several proposals by President Ranil Wickremesinghe aimed at promoting foreign and local investment in the country’s mineral resources sector to boost revenues in a sector which has been long dragged by corruption.

The new cabinet proposal has changed the earlier mandatory requirement of value addition from the first day of the business.

Instead, the government has changed it and considers separation of minerals from the deposits as the initial value addition and the licensee could export the minerals either for 24 months or a maximum 30 percent of the grids. The licensee then could put up a value addition plant.

“We are getting a lot of inquiries these days. Now we study the applications and analyze the financial capabilities (of the applicants). Only if they are capable, we will sign and then the GMSB (Geological Survey and Mines Bureau) will issue the certificate,” State Investment Minister Amunugama told reporters at a media briefing on Friday (13).

However, the Minister did not reveal the number and the details of the new applicants under processing.

“At one point (in the past), all got the certificates with no investor. Then the grid gets blocked, and nobody can use it. That’s why we have changed this.”

According to the BOI data, Sri Lanka has 7.5 million metric tons (MT) of Ilmanite/Rutile/Zircon deposits in both Eastern coastal town of Pulmudai in Trincomalee district and Northwestern coastal town of Puttalam), 45,000 MT of graphite, and 60 million MT of Apatite.

Both India and Pakistan are given market access to the deposits with duty concession under Indo-Sri Lanka Free Trade Agreement (ISLFTA) and Pakistan-Sri Lanka Free Trade Agreement (PSLFTA) with 100 percent duty free for any machinery related to the business.

Sri Lanka exports the minerals to the United States, United Kingdom, China, India, and Pakistan. The island nation earns around $30 million annually with 200,000 mt of production, BOI data showed.  (Colombo/Oct 16/2023)

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Sri Lanka discussing giving extra land, water for Chinese oil refinery

ECONOMYNEXT – Sri Lanka is in discussions with China’s Sinopec to give extra land and assure water supplies after the company decided to expand the capacity of a planned oil refinery in Hambantota, Energy Minister Kanchana Wijesekera said.

“There are concerns on how the water supply is going to be provided for the refinery,” Minister Wijesekera told reporters Friday.

The refinery will need more land and also revise conditions in a Board of Investment agreement, he said.

Read more
Sinopec to double capacity of new refinery in Sri Lanka’s Hambantota

Recommendations and decisions from Sri Lanka’s side had already been sent and Sinopec is expected to revert back in May.

“We are hoping to sign the agreement once everyone has agreed,” Wijesekara said.

The principle agreements are expected to be signed by June, he said.

The refinery could sell up to 10 percent of its output in the domestic market.

“There is no commitment by the government to purchase anything,” Minister Wijesekera said. (Colombo/Apr19/2024)

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Sri Lanka rupee closes weaker at 302.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 302.00/50 to the US dollar in the spot forex market on Friday, down from 301.50/302.00 a day earlier, dealers said.

There was increased demand for dollars after the central bank bought 715 million dollars from forex markets. In the previous two months it was buying on average about 200 million US dollars, leaving market participants and bank in a ‘oversold’ position.

There were some official dollars sales Friday dealers said.

READ Sri Lanka rupee quoted wide to US dollar as peg inconsistencies flare up

Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed at 11.30/40 percent down from 11.35/40 percent.

A bond maturing on 15.09.2027 closed at 11.95/12.05 percent up from 11.90/12.05 percent.

A bond maturing on 15.12.2028 closed stable at 12.15/25 percent.

A bond maturing on 15.09.2029 closed stable at 12.30/40 percent.

A bond maturing on 01.10.2032 closed stable at 12.40/50 percent. (Colombo/Apr19/2024)

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Sri Lanka stocks close down, banks trade down

ECONOMYNEXT – The Colombo Stock Exchange closed down on Friday, data on its site showed.

The broader All Share Index closed down 0.38 percent, or 44.80 points, at 11,753; while the S&P SL20 Index closed down 0.53 percent, or 18.46 points, at 3,456.

Turnover was at 1.4 billion. The diversified financials (Rs366mn) and banks (Rs266mn) sectors continued to see selling pressure.

“This was possibly due to uncertainty around the bond discussions,” market participants said.

With the exception of Sampath Bank Plc (up at 77.50) all other banks traded down in the day. Commercial Bank of Ceylon Plc was down at 104.50, Hatton National Bank Plc was down at 188.50, and DFCC Bank Plc was down at 77.00.

LOLC Finance Plc saw the most trades and closed up at 6.40. Another LOLC company, Browns Investments Plc, also saw high traded volumes and closed up at 5.60.

Softlogic Capital Plc was up at 7.00, and Softlogic Holdings Plc was up at 11.20. A trading suspension imposed on SHL.N0000 was lifted effective today as the company submitted the annual report for the year ended 31st March 2023.

However, shares of the Company will remain in the Watch List “due to Qualified Audit Opinion and Emphasis of matter on going concern in the Independent Auditor’s Report in the Audited Financial Statements for the year ended 31st March 2022.”

Dialog Axiata Plc, which announced its merger with Bharti Airtel Thursday, saw its share price close up at 11.90.

“There was some traction on index heavyweights,” market participants pointed out.

Top contributors to the APSI included Aitken Spence Plc (up at 134.50), Ceylon Tobacco Company Plc (up at 1,245.25, and Lion Brewery (Ceylon) Plc (up at 1,048.50).

There was a net foreign inflow of 5 million. (Colombo/Apr19/2024)

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