News
Corruption and red tape keep out substantial foreign investment into mining industry
Sri Lanka had failed to attract substantial foreign investment in the mining industry during the last 50 years mainly due to the high sovereign risks associated with Sri Lanka, Chirantha Weerawardena, a mining engineer, said during a seminar, titled ‘Blueprint for Developing a Sustainable Sri Lankan Mining Industry by Attracting Foreign Investment,’ organised by the Institution of Engineers Sri Lanka (IESL) recently.
Eng. Weerawardena said that mining was a long term investment and investors in the mining sector werevery concerned about the political and economic stability of a country. “They are worried about abrupt changes to mining related law and regulations, significant and abrupt changes to tax and royalty regimes, the lack of rule of law which can result in losing mining rights without valid reasons and the lack of an independent mechanism for appeal or arbitration against the regulator’s or minister’s decisions.”
Eng. Weerawardena said for a mining company exploration is a high risk investment because significant funds need to be spent before hitting an ‘economic deposit.’ Given that mining is an investment spanning 10 to 40 years, once an investment is made, a mining company is “trapped” as it can’t leave easily.
“A few years ago a London Stock Exchange registered company spent about 16 million US dollars to carry out initial exploration of three sites they acquired in Sri Lanka. Then the Geological Survey & Mines Bureau (GSMB) suspended the licence citing an issue with the local ownership requirement of the mining licence holder. In Sri Lanka there is a rule saying an exploration license can be taken by anyone, but the mining licence can be only taken by a company with majority local ownership. The company went to court. I have no problem with this law, but the GSMB should have brought this up at the start. And then the licences were reinstated by the Secretary to the Ministry of Environment under statutory appeal process. Now the issue has been sorted out and the company signed an MOU with the LB group in China – the second largest company in the world in TIO pigment manufacturing, who will invest 81 million dollars to build a mining separation plant at Oluvil,” he said.
That had been one of the two serious investments in the mining sector in the last 50 years, Weerawardena said, adding that the above case demonstrated that Sri Lankan officials and politicians were not interested in facilitating foreign investments and sometimes went of their way to make life difficult for investors. Such actions mainly stem from corruption, especially when they want kickbacks.
Weerawardena said resource nationalism, which was the tendency of people and governments to assert control over natural resources located in their territory, was also tied with sovereign risk. However, resource nationalism is based on several valid and good points and this is not inherently bad.
“However, we must realise politicians and some ‘experts’ sometimes overestimate in-situ value of mineral deposits for various reasons. There is also a widespread anti-mining sentiment among the people as well.
“We have to also be scientific when we estimate the in-situ value of deposits. There are various costs associated with extracting the minerals in the ground. There are ship loading costs, transport costs, processing costs, mining costs, brownfield drilling cost, overheads and amortisation of capital. We have to take these costs into consideration before we value the mineral deposits we have,” he said.
He added that mining is an economic multiplier. In Australia, each mining job creates at least four others in the form of support services.
However, mining can also have a negative impact if a country does not manage its operations properly, he said.
“You can end up degrading a non-renewable resource without much to show. This has happened in Latin American and African countries. Because mining is so profitable, it can lead to corruption and social disharmony among stakeholders and communities. The worst-case scenario is that there can be foreign interference in the country. If we understand both the positives and negatives of mining, the country can go through the correct process to harness the benefits of mining.”
He added that Sri Lanka is a country with high sovereignty risk. Despite opening up the economy in 1977 and although Sri Lanka has several world-class deposits, the country has only got a few mining investments because of this.
“We need to understand that mining companies prefer stable policies. They can’t be lured by promises of cheap minerals. You also need less corruption and red tape. Then mining companies will come to Sri Lanka,” he said. (RK)
The Government’s ‘Rebuilding Sri Lanka’ Fund, established to provide relief and support to communities affected by Cyclone Ditwah, continues to receive financial contributions on a daily basis.
Accordingly, the Containers Transport Owners Association made a financial contribution of Rs. 1.5 million, while the Association of SriLankan Airlines Licensed Aircraft Engineers contributed Rs. 1.35 million to the Fund.
The respective cheques were formally presented to the Secretary to the President, Dr. Nandika Sanath Kumanayake, at the Presidential Secretariat on Friday (19).
The occasion was attended by W. M. S. K. Manjula, Chairman of the Containers Transport Owners Association, together with Dilip Nihal Anslem Perera and Jayantha Karunadhipathi.
Representing the Association of SriLankan Airlines Licensed Aircraft Engineers were Deshan Rajapaksa, Samudika Perera and Devshan Rodrigo handed over the cheque.
A meeting between Prime Minister Dr. Harini Amarasuriya and a delegation of UNICEF representatives was held on Saturday, (December 20) at the Prime Minister’s Office.
During the meeting, the Prime Minister explained the measures taken by the Government to ensure the protection of the affected student community and to restore the damaged school system, as well as the challenges encountered in this process.
The Prime Minister stated that reopening schools located in landslide-prone areas would be extremely dangerous. Accordingly, the Government is focusing on identifying such schools and relocating them to suitable locations based on scientific assessments.
The Prime Minister further noted that financial assistance has been provided to students affected by the disaster, enabling parents to send their children back to school without an additional financial burden. Emphasizing that school is the safest place for children after their homes, the Prime Minister expressed confidence that the school environment would help restore and improve students’ mental well-being
The Prime Minister also highlighted that attention has been given to several key areas, including the relocation of disaster-affected schools, restoration of school infrastructure, merging and operating certain schools jointly, facilitating teaching and learning through digital and technological strategies, and providing special transportation facilities. She emphasized that the Government is examining these issues and is committed to finding long-term solutions.
The UNICEF representatives commended the Government’s commitment and the initiatives undertaken to restore the education sector and assured their support to the Government. Both parties also discussed working together collaboratively on future initiatives.
The meeting was attended by the UNICEF representatives to Sri Lanka Emma Brigham, Lakshmi Sureshkumar, Nishantha Subash, and Yashinka Jayasinghe, along with Secretary to the Ministry of Education Nalaka Kaluwewa, Director of Education Dakshina Kasturiarachchi, Deputy Directors Kasun Gunarathne and Udara Dikkumbura.
(Prime Minister’s Media Division)
Drug controversy:
“Setting up state-of-the-art drug testing facility will cost Rs 5 billion”
Activists call for legal action against politicians, bureaucrats
Serious questions have been raised over Sri Lanka’s drug regulatory system following revelations that the National Medicines Regulatory Authority’s (NMRA) quality control laboratory is not accredited by the Sri Lanka Accreditation Board (SLAB), casting doubt on both the reliability of local test results and the adequacy of oversight of imported medicines.
Medical and civil rights groups warn that the issue points to a systemic regulatory failure rather than an isolated lapse, with potential political and financial consequences for the State.
Chairman of the Federation of Medical and Civil Rights Professional Associations, Specialist Dr. Chamal Sanjeewa, said the controversy surrounding the Ondansetron injection, which was later found to be contaminated, had exposed deep weaknesses in drug regulation and quality assurance.
Dr. Sanjeewa said that the manufacturer had confirmed that the drug had been imported into Sri Lanka on four occasions this year, despite later being temporarily withdrawn from use. The drug was manufactured in India in November 2024 and in May and August 2025, and imported to Sri Lanka in February, July and September. On each occasion, 67,600 phials were procured.
Dr. Sanjeewa said the company had informed the NMRA that the drug was tested in Indian laboratories, prior to shipment, and passed all required quality checks. The manufacturer reportedly tested the injections against 10 parameters, including basic quality standards,
pH value, visual appearance, component composition, quantity per phial, sterility levels, presence of other substances, bacterial toxin levels and spectral variations.
According to documents submitted to the NMRA, no bacterial toxins were detected in the original samples, and the reported toxin levels were within European safety limits of less than 9.9 international units per milligram.
Dr. Sanjeewa said the credibility of local regulatory oversight had come under scrutiny, noting that the NMRA’s quality control laboratory was not SLAB-accredited. He said establishing a fully equipped, internationally accredited laboratory would cost nearly Rs. 5 billion.
He warned that the failure to invest in such a facility could have grave consequences, including continued loss of life due to substandard medicines and the inability of the State to recover large sums of public funds paid to pharmaceutical companies for defective drugs.
“If urgent steps are not taken, public money will continue to be lost and accountability will remain elusive,” Dr. Sanjeewa said.
He added that if it was ultimately confirmed that the drug did not contain bacterial toxins at the time it entered Sri Lanka, the fallout would be even more damaging, severely undermining the credibility of the country’s health system and exposing weaknesses in health administration.
Dr. Sanjeewa said public trust in the health sector had already been eroded and called for legal action against all politicians and public officials responsible for regulatory failures linked to the incident.
by Chaminda Silva ✍️
Financial contributions received for ‘Rebuilding Sri Lanka’ Fund
UNICEF representatives and PM discuss rebuilding schools affected by the Disaster
A few showers may occur in the Uva province and in Ampara, Batticaloa, Matale, Nuwara-Eliya, and Hambantota districts
NMRA laboratory lacks SLAB accreditation
Air quality deteriorating in Sri Lanka
Cardinal urges govt. not to weaken key socio-cultural institutions
‘Dates have the highest sugar content to fight Coronavirus’
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