New National Mineral Policy comes into effect after 27 years

By Mangala Pavithrani

Colombo, June 11 (Daily Mirror) - Sri Lanka's National Mineral Policy has been completely revised for the first time in 27 years and was presented to Parliament, Minister of Industry and Entrepreneurship Development Sunil Handunnetthi announced today.

Speaking at a media briefing, the Minister said the new policy officially comes into effect from today (11), marking a significant shift in the management and utilization of the country's mineral resources.

The Minister said that Sri Lanka has lost substantial foreign exchange earnings over the years due to the export of valuable mineral resources in raw form without value addition.

"A mineral exported as a raw material for around US$2,000 per tonne could generate significantly higher income if processed locally. Some minerals have the potential to earn up to US$20,000 from just one kilogram after value addition," he said.

Handunnetthi pointed out that valuable resources such as ilmenite, rutile, zircon, garnet, silica quartz and titanium have not been properly utilized in the past despite their economic potential.

He said Sri Lanka's geological location provides access to significant mineral deposits, including graphite and phosphate found along the eastern coast, Mannar, the southern coastal belt and inland areas. However, outdated policies had enabled the exploitation of these resources through various irregular practices.

The Minister alleged that certain private companies had obtained exploration licences and used them to artificially inflate share prices by claiming to have joint ventures with the government, without carrying out proper mining or value-addition activities. In some instances, mineral-rich lands had been acquired solely for future resale at higher prices, he added.

According to the Minister, the new policy is designed to prevent such practices. Under the revised framework, all mineral exploration, mining, processing and value-addition activities will be strictly regulated by the Geological Survey and Mines Bureau.

He said future exploration activities will be conducted through the Bureau, with findings published through gazette notifications before investors are invited through a transparent and competitive process.

Speaking at the same event, Director General of the Geological Survey and Mines Bureau K.N. Bandara said Sri Lankan minerals are of a higher quality than those found in many major mineral-producing countries.

He explained that the new policy is based on seven key principles aimed at strengthening the economy while ensuring environmental protection.

The policy highlighted scientific assessment of mineral resources, consideration of social and environmental benefits alongside commercial gains, a ban on the export of raw minerals, promotion of value-added industries, encouragement of research and innovation, introduction of new regulatory and financial frameworks, and the establishment of a formal land rehabilitation system to minimize environmental damage caused by mining.

Bandara said that illegal and unregulated mining activities have caused significant environmental harm and noted that mineral resources are non-renewable and must be managed responsibly.

Authorities also announced that raids against illegal mining operations across the country will be intensified under the new policy framework.