A recent COPE inquiry has revealed the failure of the Geological Survey & Mines Bureau (GSMB) to collect state royalty.

This was disclosed during the Committee’s inquiry into the Auditor General’s reports for the years 2022 and 2023 of the GSMB and its current performance under the chairmanship of Dr. Nishantha Samaraweera on 2025.09.12 in Parliament.

It was also disclosed that the GSMB had issued a mining licence from December 2023 to September 2024 to a private company for sand removal at the Mukkutoduwawa Estate in Puttalam District belonging to Chilaw Plantations Ltd. Although the contractor had removed 36,531 to 45,561 cubic metres of sand, royalty had been paid only for 1,594 cubic metres, amounting to Rs. 686,464. The Auditor General pointed this out, based on the report of the GSMB Technical Services (Pvt) Ltd dated 19 December 2024 estimating the sand removed. 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 used there. It was pointed out by the COPE 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 from stone quarries in different parts of the country, in reality, only a small revenue is received by the government, as pointed out by the Members of the Committee with examples.

Accordingly, the Committee recommended to the Secretary of the Ministry of Environment and the officials of GSMB that a stronger monitoring mechanism should be established beyond the issuance of mining licenses, 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 Licence (EL) prior to mining. It was revealed that under the prevailing system, many institutions obtaining exploration licences sold 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 GSMB has issued more than 450 exploration licences, but currently only 43 remain active.

Accordingly, it was pointed out that the current system did 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 exploration licenses. 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 9 licenses had been issued to 5 companies registered in Sri Lanka for mineral sand exploration in Mannar Island, those companies had not carried out exploration for 10–13 years. It was revealed that all 5 companies registered in Sri Lanka are managed by one company registered in Australia. As a result, the license 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 kilometers has been blocked, which was pointed out by the Committee Chairman 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 2025 August 11, the Bureau had not implemented rehabilitation works for 3,150 licenses. It was discussed that although a bond (deposit) is obtained at the time of license 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 license holders who failed to carry out rehabilitation.

Extended 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.