Industry and Commerce Minister Rishad Bathiudeen (far right) with officials of Lanka Mineral Sands Ltd under him led by Chairman and MD Dr. Mahinda Moragolle (second from right) at the EDB
Export prospects for Sri Lanka’s industrial mineral of ‘remarkable durability’ suddenly brightened for the first time recently when a ministerial order was issued towards immediate value addition work and Sri Lanka’s mineral sands monopoly Lanka Mineral Sands Limited (LMSL) is shining with a huge sales windfall, as revealed in Colombo recently.
“Due to corruption and politicization, many government-owned businesses are incurring losses. I am pleased that LMSL is not in this category,” stressed Industry and Commerce Minister Rishad Bathiudeen.
Minister Bathiudeen was addressing the management and technical team of LMSL operating under his ministry at the Export Development Board (EDB). Joining the session was LMSL Chairman and MD Dr. Mahinda Moragolle.
The LMSL team was briefing Minister Bathiudeen on the latest mineral sand trends and new technological additions needed to go for higher value addition for Non-Magnetic Heavy Mineral Concentrates (NMHMC) produced by LMSL.
The NMHMC (current market price at US US $ 164 per MT) produced by LMSL consists of major mineral sand products used globally -zircon, rutile and high-titanium ilmenite, each of which are extracted separately from NMHMC by LMSL. The only mineral sand producer monopoly in Sri Lanka, LMSL delivers both types of major mineral sand products in the world –‘titanium dioxide minerals’ and ‘zircon’.
Sands mined by LMSL have 80 percent titanium dioxide content, making it one of the few producers in the world that creates high-quality mineral sands. The industrial mineral zircon is considered to be a material of ‘remarkable durability’. As for Lankan zircon, though many other global zircon mineral producers’ zirconiam dioxide (ZrO2-the element sought in zircon mineral by buyers) levels are around 50-55 percent, Sri Lankan zircon mineral produced by LMSL is considered to be in the 65 percent ZrO2 range.
This, in combination with Sri Lankan zircon’s very low moisture (at 0.2-0.5 percent maximum) makes it a premium zircon mineral for high thermal applications such as advanced ceramics and nuclear power plants sought globally. At LMSL’s ‘freshly extracted’ stage (but prior to any ‘further processing’ stages) one MT of LMSL made Zircon fetches US US $ 850 from the global market. If it is further processed to ‘zircon flour’ stages and zircon flour extracted, the same one MT of zircon forex revenue climbs to US US $ 1600 per MT, thereby immediately doubling zircon export revenues.
Currently however, LMSL does not have the ‘zircon flour’ processing technological capacity with it. The LMSL’s meeting with Minister Bathiudeen is to secure his nod for zircon and other value additions.
“Zircon is considered to be a ‘valuable’ mineral sand, with ‘low magnetic susceptibility and electrical conductivity. One third of present Zircon production is used in ceramics,” said Dr. Moragolle and added, “Almost all the annual 2000Mt produced in Sri Lanka are processed by LMSL and exported. We are also pleased to report you of strongly increased revenues in 2014 at Rs.1220 million.”
LMSL reported US $ 5 million (Rs.679 million) sales revenue in 2013 and saw it surging by a huge 80 percent to US $ 9 million (Rs.1220 million) in 2014. Its net profit in 2014 reported at US $ 2.4 million.
Dr. Moragolle added, “Chemicals, foundries and refractories are other key uses of Zircon. We need your directions to start evaluating zircon flour production which can double our export earnings and we look for your directions.”
“I have been given to understand that LMSL is a profit-earning venture,” said Minister Bathiudeen.
“Before we embark on investing in such ventures it is important to see whether such loans and interests that burden the taxpayer would occur. And there are times when, for the sake of technological development of the industry and the country, such loans could be useful. If LMSL cannot invest on its own, a public-private partnership for a venture of this nature can therefore bring benefits.
We need to explore these options. I believe that we should not waste any more time and LMSL should promptly advance towards higher grade zircon Flour production and other extract value additions so that we can double our mineral revenues. LMSL team should immediately study and find ways to upgrade to zircon flour production and if feasible, I shall help to add this technology immediately,” the minister said.
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