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The occurrence of mineral sands was discovered mainly in the northeast coast of Sri Lanka in 1904 during the period of the Principal Mineral Surveyor Dr. Ananda Coomaraswamy from the Colonial Office.

However, the industry dates back to only 1957, with the establishment of Ceylon Mineral Sands Corporation for the exploitation of the Pulmoddai deposit and it should be pointed out that there is no value addition to valuable heavy minerals  namely ilmenite, rutile and zircon for the past 57 years of its existence!



Pulmoddai deposit
The Pulmoddai deposit is about six kilometres in length with an average width of 100 meters and is estimated to contain six million tonnes of heavy sands with an average composition of 70-72 percent ilmenite, 8-10 percent zircon, 8 percent rutile and 0.3 percent monazite. This unique deposit is replenished during the northeast monsoon and the rate of such replenishment is not known.

There are two theories for its  origin namely whether the sands come from the continental shelf or from the Mahaweli River with its discharge into the Koddiyar Bay and heavies  carried up the coast due to ocean currents.

The Atomic Energy Authority (AEA) in collaboration with the Geological Survey Department (Present GSMB) in early 1980s initiated a project for introducing radio isotopes upstream and tried to detect the isotopes at Pulmoddai to prove the latter theory but this project was abandoned. However, since the construction of dams across the Mahaweli, it is noted that deposition of heavy sands has somewhat decreased.

In the late 1940s, the first Sri Lankan government mineralogist Fernando was successful in establishing a pilot plant in Katukurunda, close to Kalutara, with the installation of a magnetic separator and gravity table primarily to separate monazite, a radioactive mineral found on the beaches of Beruwela.

However, in 1954, with the money provision for the newly established Mineralogy Department, a new air float separator, a high tension magnetic separator and a multi grader for separation of mineral sands were installed and completed in 1962.

The above pilot plant also provided facilities for carrying out trials on bulk samples of the Pulmoddai mineral sands for the development of floor sheets and for the testing of the processing equipment.

However, the International Bank for Reconstruction and Development (IBRD) established in 1944 under the World Bank recommended in 1948 that Sri Lanka should export the raw mineral sands and cautioned on the development of the Pulmoddai deposit but there was no market for the raw sands.

With the establishment of Ceylon Mineral Sands Corporation in 1957, plans were formulated for a processing plant with the earlier floor sheets for treatment and refining of sands for export. Preliminary work on the project commenced in 1958 and the test production was in 1961.The first exports amounted to a few thousand tonnes of ilmenite shipped directly from the plant in 1963.

In early 1972, the government successfully negotiated an ADB loan of US $ 25 million to upgrade the facilities at Pulmoddai with the introduction of wet magnetic separators, wet spiral separators, etc. for separation of mainly zircon and rutile with the annual capacity increased to 90,000 tonnes of ilmenite, 9000 tonnes of rutile and 5500 tons of zircon.

A jetty with a conveyor belt to load the vessels with the separated minerals was also built as well as a water intake site at Yan Oya for the supply of fresh water for the spiral separators, etc. of the plant.

The storage of the heavy sands was improved with facilities for the rainy season and surface mining was also modernized by acquisition of heavy equipment to scrape the beach to collect about three inches thick heavies.

Accordingly, ilmenite, rutile and zircon were produced commercially but unfortunately, it was exported to a captive market in Japan. There was no guarantee of realizing the world market price for these minerals.



Value addition to ilmenite and rutile
The mineral sands industry is based on production of two major products.

•     Titanium dioxide minerals in the form of rutile (Ti02), ilmenite (FeTiO) and leucoxene (FeTiO3) mainly used for producing white pigment through the sulphuric acid or the hydrochloric acid routes. The other uses are titanium slag, metal and synthetic rutile.

The breakdown in the use TiO2 minerals are pigment 93 percent metal 4 percent welding 3 percent.

Further, conversion of the titanium pigment to paint and coatings 53 percent, plastics 22 percent paper 8 percent and others 10 percent has been recorded for a wide range of industries.

•     Zircon (ZrSiO4) is a major product and is produced after separation of the titanium minerals.

The most important application of zircon is in the ceramic industry in the production of opacifiers used in surfaces glazers and pigments. Refractory applications of zircon prior to 1980s was the most common use to make refractory bricks and in the steel and glass industries.

However, the limited supplies and high prices of zircon in the late 1980s forced the steel industry to shift to alternative refractory materials.
Zircon is also used for the production of zirconium metal, zirconium chemicals and high value of these products with the extensive and growing applications has made zircon a strategic mineral.

•     Monazite (Ce, La, Th, Nd, Y) PO4 are found in offshore areas of Beruwela, Kalpitiya as well as in minor quantities in Pulmoddai. The perfection of breeder reactors in Japan and a pilot nuclear plant in Madras have demonstrated that thorium can be used instead of uranium for atomic power generation and thus monazite is also now identified as a strategic mineral.

Exploration for heavy sands north and south of Pulmoddai
In early 1981, SIMEC Ltd, a joint venture (JV) between State Mining and Mineral Development Corporation (former Graphite Corporation) and Intersite BV/Fugro of Netherlands carried out a detailed survey of the beach between Nilaweli and Mullaitivu and proved four very promising heavy mineral deposits with a total reserve of over seven million tonnes covering Pudevakkaddu, south of Pulmoddai and Kokkilai, Nayaru and Kokkuttuduvai to the north. These four deposits were earlier discovered by me by traversing this coastal area on foot with a Geiger counter in 1979.

The most interesting deposit is at Pudevakkaddu where 85 bore holes varying from six to 14 meters were done and this deposit is on the back bay of the Koduwakattumalai promontory that acted as a shield for the deposition of heavy sands.

Further, the deposit continues inland for over three miles along the Kodikkaddi Aru, which is an old river bed. I am convinced that this deposit itself is more promising than even Puilmoddai and most of the ilmenite found is weathered to leucoxene. However, no development work is in progress due to a legal dispute by the tenement holder and the GSMB.

It is also interesting that all these deposits were located at the mouths of lagoons with promontories in the Back Bay areas and future targets should include area north of Mullaittivu including the famous Nanthi Kadal Lagoon.



Exploration licences issued by GSMB
The Sri Lanka Minerals Yearbook 2013 in Table 8c has reported that as at June 30, 2012, the number of valid exploration licences issued is 34 covering an area of 1156 square kilometres and the largest number is covered by mineral sands as compared to other minerals.

However, the map (Fig 5) of the report shows at least three fourth of the coastal stretch covered with exploration licences “issued and pending” is nearly 85 percent and it is pertinent for the GSMB to list out these licences and indicate to whom they were issued and for how long have they held them and the reasons why no activity is reported.

It is reliably learnt that genuine exploration companies locally and from abroad had been involved in exploration for over a decade expending risk capital running into thousands of dollars but no mining licences have been issued to them.

Some companies had even carried EIAs but still there is no decision by the GSMB to issue them licenses. It is strongly felt that there is no level playing field as some companies have tied down some promising deposits such as Pudevakkaddu without any development.

It is suggested that the GSMB should submit a report on the number of exploration licences issued and the other details and explain to the Environment and Renewable Energy Ministry (MOERE) the present status of each licence. It is also learnt that some prospectors have been selling their licences to third parties for financial benefits.



Value addition to mineral sands in Sri Lanka
It was reported in the local press on March 1, 2012 that a local company has signed a JV agreement with a local Nanotechnology Research Institute with an investment of US $ 8 million to manufacture 10,000 tonnes of Nano titanium Dioxide pigment where the local demand will be 5000 tonnes per annum and the balance for the export market.

It has also been reported that a pilot project will be set up near Sapugaskanda refinery which will produce the TiO2, where the Research institute will have its own processes probably with a patent and the commercial company will look out for the local and foreign markets. It is surprising why the Lanka Mineral Sands Ltd, the only producer of the raw material ilmenite, is not a JV partner.

Further, for the interest of the public it would be opportune to disclose information on the progress of this project as it was targeted for completion at the end of this year and whether foreign and local markets have been secured.



Production and export of mineral sands
According to the Minerals Yearbook of the GSMB, the production of ilmenite for 2012 was 40,118 tonnes (less than 50 percent of the installed capacity), rutile 1590 tonnes (17 percent of capacity) and zircon 293 tonnes (6 percent of capacity by the Lanka Mineral Sands Ltd (LMSL). It is also learnt the studies are being initiated by LMSL consultants to increase the production capacity of the plant and identify bottle necks like supply of fresh water from Yan Oya, etc.

Yearbook of the GSMB for 2012 also records, “In 2004, Alchemy Boulders Heavy Metal (Pvt) Ltd has established a mineral sand separation plant to separate rutile and zircon from mineral sands purchased from Lanka Mineral Sands Ltd (LMSL).”

It is regretted that the production and export volume of this company with the amount of sands purchased and transfer prices from the Pulmoddai mine gate are not provided in the Year Book for 2012.

Another fact that has emerged from my study is that notice calling for tenders for mineral sands issued from the LMSL website Tender No. LMS/MKT/TDR/13/07 has put out only 5000 tonnes of ilmenite with a refundable tender deposit of Rs.10 million or US $ 78,280 that would correspond to a security of Rs.1000 or US $ 15.65 per tonne. It is apparent that compared to the world market price of ilmenite the cash deposit is high and further the conditions given in four (i to ix )  are not appropriate to international tender procedures as I as the Director of the Geological Survey Department, have been a member of  such tender boards of the Ministry of industries in the 1980s.

The other strange fact that has emerged is that with a production of 40,000 tonnes of ilmenite by LMSL in 2012, why is it that the quantity offered for tender is 5000 tonnes, which is only 12.5 percent and what is the justification of LMSL for stock piling the excess ilmenite?



Recommendations
As elaborated in my article in the Business Section of Daily Mirror of March 11, 2014 on a ‘National policy for value addition to minerals’, the involvement of four ministries in such activities has complicated policy direction and the objectives of the lead ministry namely the Environment and Renewable Energy Ministry (MOERE). In order to avoid duplication and ad hoc decisions of the other ministries and the strengthening of coordination with MOERE, I suggest the following:

•     The GSMB should provide a detailed list of licences issued to individuals and companies for exploration for mineral sands along the coastal stretch of Sri Lanka and status of each licence including how many licence holders have officially applied for mining licences.
   
•     The MOERE in collaboration with the GSMB review the status of each licence by having meetings with the tenement holders including foreign and local companies and consider issuance of mining permits after evaluation of a technical committee and insist that each tenement should be subject to EIAs.
   
•     Review the activities of Alchemy Boulders Heavy Metal (Pvt.) Ltd as reported in the GSMB Mineral Year Book and ascertain the transfer prices of mineral sands from Pulmoddai to their separating plant and the quantity of rutile and zircon produced and exported to markets abroad and the fob prices realized with documentary proof. Also ascertain the future plans for the expansion of this facility.
   
•    Review the activities of LMSL in close coordination with the State Resources and Enterprise Development Ministry and Industries and Commerce Ministry and ascertain reasons for low production of ilmenite, rutile and zircon and stockpiling ilmenite.
   
•     Review the project of the Nanotechnology Research Institute (SLINTEC) of the Science and Technology Ministry with the private sector and the progress made on the Nano Ilmenite project to produce 10,000 tonnes of titanium pigment for the local market and export and whether these markets have been identified and secured.
   
•    Appoint a committee chaired by the MOERE Secretary to formulate a national policy for value addition to mineral sands taking into consideration the above factors that impede value addition to this mineral resource.

Conclusions
With my experience in the mineral sector for over 50 years locally and with the United Nations in the Asia Pacific region, it is regretted that there is no cohesive and integrated national policy for value addition to minerals that has led to confusion mainly attributed to ad hoc policies of various ministries and by passing the lead ministry, the MOERE, that administers the GSMB and the Mines and Minerals Act No. 33 of 1992, its amendments and related regulations.

In order to avoid such ad hoc decisions and duplication of efforts, the Government of Sri Lanka (GOSL) should take immediate action to rectify the situation so as to catalyse investment flows from abroad in the form of foreign direct investments (FDIs) as Sri Lanka compared to the size has some strategic minerals that are essential for new technologies especially for the newly emerging green technology primarily to arrest the rapid deterioration of the environment basically due to climate change.

The correct course of action will save our future generations from economic, social and environmental disaster.

(Dulip Jayawardena, a retired Economic Affairs Officer United Nations ESCAP, can be contacted at [email protected])