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GSMB: Issuance of mining permits, exploration licenses and consultancies

9 July 2013 05:24 am - 0     - {{hitsCtrl.values.hits}}

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As a former Director of the Geological Survey Department (Present GSMB) I have critically analyzed the Minerals Yearbook 2012 released by the Director General GSMB in August 2012. In the first instance the designation of post of Director General is a misnomer as this institution has no Directors. The change of designation was instituted by the Mines and Minerals (Amendment) Act no.66 of 2009.It is interesting to probe the consultancies   given by GSMB without calling for Expression of Interests (EOIs).The practice of appointing a geologist as CEO followed by the Geological Survey Department (GSD) since 1944 was discontinued with the establishment of the GSMB in 1992 resulting in the mess that this government institution is in at present.

I shall deal with issuance of mining permits and exploration licenses and consultancies.
There are altogether 3 groups of mining licenses namely (A) artisanal (B) Industrial license and (C) reserved mineral licenses later is at the discretion of the Minister and is  excluded .


 
Artisanal Mining License (AML)
This license is issued to grant the holder the exclusive right to   mine all minerals specified within an area not exceeding 10 hectares or to a depth not exceeding 25 meters and to process and trade in these minerals.
 
There are two categories   of (AML) namely (A) the depth of the hole to be less than 1.5 meters (B) the production not less than 100 m 3 and not more than 600 m3 per month.
 
This is highly impractical to supervise as the conditions are very vague and also lead to abuse.
 
During the year 2011, 654 AML/A, 1189 AML/B making a total of 1843 licenses were issued. Out of this total Gampaha, Badulla, Kandy, Matale, Kalutara and Moneragala Districts a total 1523 licenses were issued which is 82 per cent. It is obvious that most of these licenses   were for sand mining and the authorities should investigate whether machinery was used and the monthly output was less than 600 m3 from each artisanal mine. The frequency of inspection by the mining engineers assigned to these districts from the regional offices of GSMB should be queried and whether the Director General or the Chairman visits these offices   on periodic inspection.


 
Industrial Mining License
Industrial mining license grants the holder the exclusive right to explore for, mine, process and trade in all minerals mined within the area specified.
There are 3 categories of Industrial Mining Licenses namely A, B and C.
 
 Category A - mining should be by multi bore hole and using delayed element?   And the bore hole should be more than 3 meters and the production volume is more than 1500 m3 per month. Track drills, jack hammers, rock breakers front end loaders and other machinery (not stipulated) can be used.
 Category B - The blasting method is single bore hole using high explosives or multi bore holes   using low explosives.  Depth of bore hole not less than 1.5 meters and not more than 3 meters. Production volume is not less than 600 m3 or not more than 1500 m3 a month. Jack hammers, front end loaders and excavators can be used.
 
Category C –Single shot hole, depth of bore hole less than 1.5 meters production volume less than 600 m3 per month.
 
During 2011  a total of 1488 of IM Licenses were issued as follows IML (A)  49  IML(B) 545  and IML (C) 894 .It has been noted that the total licenses  issued  covered  by  A and B is 1439 which is 96 per cent. Further there is a lot of ambiguity on conditions stipulated above and again it must be queried whether the mining engineers from the District offices have visited   these mines periodically on the instructions of the Director General or the Chairman. Further Ampara, Anuradhapura , Badulla, Colombo Galle, Gampha  ,Hambantota,  Kalutara, Kandy, Matale , Moneragala  and Ratnapura Districts account for 951 licenses of  A and B categories which is 66 per cent.It is strange that both the artisanal and Industrial mining licenses of the A and B categories  are mostly issued to the Gampaha, Badulla , Kandy , Kalutara districts and the authorities should investigate the activities of the   mining engineers in charge of above Districts and also the Director General.Further the Minerals Year Book conveniently   omitted the minerals for which all types of licenses were issued except sand and it is recommended that the records of these licenses should be looked into to see what minerals have been given the maximum number of licenses. This was overlooked by a former Director General who was given the consultancy. It is also proposed to ascertain the FOB prices approved by GSMB for export of minerals and look at any under invoicing as the Minerals Intelligence Unit is unable to get this information from the Director General.
 
It is also recorded that in 2011 a total of sand mining licenses issued from all categories was 2334 out of a total of 3331 for all minerals which is 70 per cent.It is recommended that the authorities should investigate the sand mining licenses and ascertain whether there had been any irregularities.


 
Exploration Licenses
It has been recorded that a total of 34 valid exploration licenses covering an area of 1044 sq. kms have been issued up to 30 June 2012.This covers 16 per cent of the total land area and near shore areas for sea sand. However Fig 2 of the Year Book for 2012 shows much larger area as reserved for mineral exploration without any category of minerals  reported  .The alarming fact is that at least half of the coastal stretch has been tied up with exclusive rights out of a total  of 1300 kms of coastline. The map is very deceptive and it is recommended the parties who were issued these licenses and for how long they have held they should be investigated. It is also stressed that there will be conflicting use of the coastline especially from Puttalam to Kalpitiya and Kalutara to Balapitiya as well as from Trincomalee to Mulaitivu where the GOSL is developing the tourist industry. Further a leading international mining company has tied up the new mineral discoveries made from the stretch from Molaitivu to Trinco as well as from Puttalam to Kalpitiya so that it will block the development of these promising deposits containing valuable mineral sands. It is recommended that the GOSL should investigate to whom these licenses were issued and the period of validity. It is known that a company has been issued licenses to estimate limestone deposits from Mannar to Poneryn and beyond for a new cement factory .It is not advisable to extract these   deposits due to influx of sea water causing environmental degradation. The exploration was undertaken by GSMB Technical Services Ltd a JV with the Chairman GSMB holding this Chairman‘s post too.


 
Consultancy Services 
It is known that consultancies are given to the favorites of the Chairman without calling for Expression of Interests (EOI) The authorities should investigate as to how many consultancies have been given to former Directors of the GSD and a working Director of GSMB as well as former Directors General and Board members and ascertain the total value of these consultancies and the reason for not calling EOIs


 
Conclusion
I would strongly recommend that the GOSL should appoint an independent commission of inquiry on the functioning of the GSMB during the past decade or beyond and hold the Chairmen as well as the Board of Management respectively if such irregularities have occurred. A case in point is the publication of a monograph titled “Saga of the Geological Survey Department “which conveniently excluded the valuable contributions of the Directors of GSD except one and highlighted some   achievements of the former Working Director, and the former Chairman to gain popularity without calling for EOIs .it is also recommended that the total amount spent for this publication be ascertained and the members of the former Board surcharged.
 
(The writer is a former Director Geological Survey (GSMB) and retired Economic Affairs Officer United Nations ESCAP and can be reached at fasttrack@eol.lk )
 
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