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Corruption and red tape keep out substantial foreign investment into mining industry
Sri Lanka had failed to attract substantial foreign investment in the mining industry during the last 50 years mainly due to the high sovereign risks associated with Sri Lanka, Chirantha Weerawardena, a mining engineer, said during a seminar, titled ‘Blueprint for Developing a Sustainable Sri Lankan Mining Industry by Attracting Foreign Investment,’ organised by the Institution of Engineers Sri Lanka (IESL) recently.
Eng. Weerawardena said that mining was a long term investment and investors in the mining sector werevery concerned about the political and economic stability of a country. “They are worried about abrupt changes to mining related law and regulations, significant and abrupt changes to tax and royalty regimes, the lack of rule of law which can result in losing mining rights without valid reasons and the lack of an independent mechanism for appeal or arbitration against the regulator’s or minister’s decisions.”
Eng. Weerawardena said for a mining company exploration is a high risk investment because significant funds need to be spent before hitting an ‘economic deposit.’ Given that mining is an investment spanning 10 to 40 years, once an investment is made, a mining company is “trapped” as it can’t leave easily.
“A few years ago a London Stock Exchange registered company spent about 16 million US dollars to carry out initial exploration of three sites they acquired in Sri Lanka. Then the Geological Survey & Mines Bureau (GSMB) suspended the licence citing an issue with the local ownership requirement of the mining licence holder. In Sri Lanka there is a rule saying an exploration license can be taken by anyone, but the mining licence can be only taken by a company with majority local ownership. The company went to court. I have no problem with this law, but the GSMB should have brought this up at the start. And then the licences were reinstated by the Secretary to the Ministry of Environment under statutory appeal process. Now the issue has been sorted out and the company signed an MOU with the LB group in China – the second largest company in the world in TIO pigment manufacturing, who will invest 81 million dollars to build a mining separation plant at Oluvil,” he said.
That had been one of the two serious investments in the mining sector in the last 50 years, Weerawardena said, adding that the above case demonstrated that Sri Lankan officials and politicians were not interested in facilitating foreign investments and sometimes went of their way to make life difficult for investors. Such actions mainly stem from corruption, especially when they want kickbacks.
Weerawardena said resource nationalism, which was the tendency of people and governments to assert control over natural resources located in their territory, was also tied with sovereign risk. However, resource nationalism is based on several valid and good points and this is not inherently bad.
“However, we must realise politicians and some ‘experts’ sometimes overestimate in-situ value of mineral deposits for various reasons. There is also a widespread anti-mining sentiment among the people as well.
“We have to also be scientific when we estimate the in-situ value of deposits. There are various costs associated with extracting the minerals in the ground. There are ship loading costs, transport costs, processing costs, mining costs, brownfield drilling cost, overheads and amortisation of capital. We have to take these costs into consideration before we value the mineral deposits we have,” he said.
He added that mining is an economic multiplier. In Australia, each mining job creates at least four others in the form of support services.
However, mining can also have a negative impact if a country does not manage its operations properly, he said.
“You can end up degrading a non-renewable resource without much to show. This has happened in Latin American and African countries. Because mining is so profitable, it can lead to corruption and social disharmony among stakeholders and communities. The worst-case scenario is that there can be foreign interference in the country. If we understand both the positives and negatives of mining, the country can go through the correct process to harness the benefits of mining.”
He added that Sri Lanka is a country with high sovereignty risk. Despite opening up the economy in 1977 and although Sri Lanka has several world-class deposits, the country has only got a few mining investments because of this.
“We need to understand that mining companies prefer stable policies. They can’t be lured by promises of cheap minerals. You also need less corruption and red tape. Then mining companies will come to Sri Lanka,” he said. (RK)
The U.S. Embassy in Colombo welcomed the U.S. Sports Envoys to Sri Lanka, former National Basketball Association (NBA) and Women’s National Basketball Association (WNBA) players Stephen Howard and Astou Ndiaye, from June 8 through 14.
The Public Diplomacy section of the U.S. Embassy said that it would launch a weeklong basketball program intended to harness the unifying power of sports, made possible through collaboration with Foundation of Goodness and IImpact Hoop Lab.
While in Sri Lanka, Howard and Ndiaye, both retired professional basketball players, will conduct a weeklong program, Hoops for Hope: Bridging Borders through Basketball. The Sports Envoys will lead basketball clinics and exhibition matches and engage in leadership sessions in Colombo and Southern Province for youth aged 14-18 from Northern, Uva, Eastern and Western Provinces, offering skills and leadership training both on and off the court. The U.S. Envoys will also share their expertise with the Sri Lanka Basketball Federation, national coaches, and players, furthering the development of basketball in the country. Beyond the clinics, they will collaborate with Sri Lankan schoolchildren to take part in a community service project in the Colombo area.
“We are so proud to welcome Stephen and Astou as our Sports Envoys to Sri Lanka, to build on the strong people-to-people connections between the United States and Sri Lanka,” said U.S. Ambassador Julie Chung. “The lessons that will be shared by our Sports Envoys – communication, teamwork, resilience, inclusion, and conflict resolution – are essential for leadership development, community building, equality, and peace. The U.S. Sports Envoy program is a testament to our belief that sports can be a powerful tool in promoting peace and unity.”
SJB Colombo District MP Mujibur Rahuman in parliament demanded to know from the government the reasons for CEB suspending the leave of all its employees until further notice from Thursday.
MP Rahuman said that the CEB has got an acting General Manager anew and the latter yesterday morning issued a circular suspending leave of all CEB employees with immediate effect until further notice.
“We demand that Minister Kanchana Wijesekera should explain this to the House. This circular was issued while this debate on the new Electricity Amendment Bill was pending. There are many who oppose this Bill. The Minister must tell parliament the reason for the urge to cancel the leave of CEB employees,” the MP said.However, Speaker Mahinda Yapa Abeywardena prevented Minister Wijesekera responding to the query and said that the matter raised by MP Rahuman was not relevant.
The Chartered Institute of Personnel Management (CIPM) successfully concluded the 8th Annual CIPM Symposium, which took place on 31st May 2024. Themed “Nurturing the Human Element—Redefining HRM in a Rapidly Changing World,” the symposium underscored the pivotal role of human resource management (HRM) in today’s dynamic global landscape. Since its inception in 1959, CIPM has been dedicated to advancing the HR profession through education, professional development, and advocacy, solidifying its position as Sri Lanka’s leading professional body for HRM.
Ken Vijayakumar, the President of the CIPM, graced the occasion as the chief guest. The symposium commenced with the welcome address by the Chairperson, Prof. Arosha Adikaram, followed by the Web Launch of the Symposium Proceedings and Abstract Book by the CIPM President. The event featured distinguished addresses, including a speech by Chief Guest Ken Vijayakumar, President of CIPM, and an address by Guest of Honor Shakthi Ranatunga, Chief Operating Officer of MAS Holdings Pvt. Ltd., Sri Lanka.
The symposium also featured an inspiring keynote address by Prof. Mario Fernando, Professor of Management and Director of the Centre for Cross Cultural Management (CCCM) at the University of Wollongong, Australia.
Vote of Thanks of the inauguration session was delivered by Dr. Dillanjani Weeratunga, Symposium Co-chair.
The symposium served as a comprehensive platform for researchers to present their findings across a wide range of critical topics in HRM. These included Cultural Diversity and Inclusion, Talent Development and Retention, Ethical Leadership and Corporate Social Responsibility, Adapting to Technological Advancements, Mental Health and Well-being at Work, Global Workforce Challenges, Employee Empowerment, and Reskilling and Upskilling.
The plenary session was led by Prof. Wasantha Rajapakse. Certificates were awarded to the best paper presenters during the valedictory session, followed by a vote of thanks delivered by Kamani Perera, Manager of Research and Development.
The annual symposium of CIPM was a truly inclusive event, attracting a diverse audience that spanned undergraduates, graduates, working professionals, research scholars and lecturers. This widespread interest highlights the symposium’s significance in the field of HRM, offering a unique opportunity for everyone to network and learn from scholarly brains.The CIPM International Research Symposium was sponsored by Hambantota International Port, Sri Lanka Institute of Information Technology (SLIIT), E B Creasy & Co. PLC, and Print Xcel Company.
US sports envoys to Lanka to champion youth development
Rahuman questions sudden cancellation of leave of CEB employees
