• Shortcomings found in exploration licence issuance, inactivity by licensees and related data inaccuracy
• Mannar Island mineral sand exploration not carried out in 195 km2 for 13 yrs. despite 5 cos. with 9 licences  
• No rehab. of land post-mining in case of 3,150 licences 
• COPE calls for law reform, new mechanism and strategic plan including clear quartz export solely by Nat. Gem-Jewellery Authority due to GSMB complicity in smuggling

Due to the Geological Survey and Mines Bureau (GSMB) not properly charging the State royalty, a large amount of money has been lost to the Government.

This was disclosed at the recent meeting of the Parliamentary Committee on Public Enterprises (COPE) which met in the Parliament on 12 September under the Chairpersonship of Dr. Nishantha Samaraweera.

It was also disclosed that the bureau had issued a mining licence from December 2023 to September of last year (2024) to a private company for sand removal at the Mukkutoduwawa Estate in the Puttalam District belonging to Chilaw Plantations Limited. However, although the contractor had removed a sand stock ranging from 36,531 to 45,561 cubic metres, the  royalty had been paid only for 1,594 cubic metres, amounting to Rs. 686,464. Accordingly, it was pointed out by the committee that a royalty of over Rs. 12 million had been lost. 

Discussions were also held on the calculation of royalty for stone quarries based on the explosives issued for the quarry. It was pointed out by the committee that due to the use of explosives in an illegal manner, the actual volume of rock removed could not be calculated, resulting in a large loss of revenue to the Government. Even though massive rock excavation takes place in stone quarries in different parts of the country, in reality, only a small revenue is received by the Government, as pointed out by the committee. Accordingly, the committee recommended to the Secretary of the Ministry of Environment and the officials of the GSMB that a stronger monitoring mechanism should be established beyond the issuance of mining licences, and that urgent steps should be taken to amend the act to overcome existing legal shortcomings.

Attention was also drawn to serious shortcomings in the mechanism of issuing Exploration Licences (EL) prior to mining. It was revealed that under the prevailing system, many institutions obtaining ELs, sell them to other persons at higher prices, without actually carrying out exploration or mining activities. Although data is submitted to the bureau after exploration, there is a serious issue regarding the accuracy of such data. 

Since 1993, the bureau has issued more than 450 ELs, but, currently, only 43 remain active, as revealed. Accordingly, it was pointed out that the current system does not ensure a proper scientific and transparent exploration process, and that the bureau does not have a mechanism to properly monitor the activities after the issuance of ELs. Therefore, instead of ad-hoc solutions, a new mechanism and a strategic plan important for sustainable national development should be prepared, as highlighted.

The committee also drew attention to the fact that although nine licences had been issued to five companies registered in Sri Lanka for mineral sand exploration in the Mannar Island, those companies had not carried out exploration for 10-13 years. 

It was revealed that all five companies are managed by one company registered in Australia. As a result, the licence holders have reserved these areas for long periods without exploration, limiting opportunities for other local and foreign investors who wish to explore minerals. Due to this, an extent of about 195 square kilometres has been blocked, which was pointed out by Dr. Samaraweera as an obstacle to the country’s development.

According to the Mines and Minerals Act, mining lands should be rehabilitated after mining. However, attention was drawn to the fact that by 11 August, the bureau had not implemented rehabilitation works for 3,150 licences. It was discussed that although a bond (deposit) is obtained at the time of licence issuance for rehabilitation, miners tend to consider abandoning the deposit more profitable than rehabilitating the land. However, the officials stated that legal action had been taken against licence holders who failed to carry out rehabilitation.

Attention was also drawn to the issue of quartz exports. It was discussed that clear quartz is being illegally exported along with quartz, and that certain insiders within the bureau appear to be supporting this smuggling. The committee pointed out that a mechanism should be established to hand over the export of clear quartz to the National Gem and Jewellery Authority and to allow only other quartz to be legally exported.

The committee pointed out that throughout its past history, the GSMB has not operated with proper planning according to the legal principles of the act.