BOI signs deal for new graphite mining venture with $ 78 m investment in 4 years

The BOI signed an agreement with Plumbago Lanka Ltd., a venture for mining and to export value added graphite. The company plans to invest US$ 20 to US$ 78 million over the next four years.

The Esna Group of Companies, a local firm with interests in power generation, finance companies and logistics, will hold a 25% stake in the venture. The Chairman of the Esna Group of Companies, Eshana De Silva, is a Director of Plumbago Lanka.

Chris Cowan, an investor and board director, said, “The signing of the BOI agreement is a significant event for our company, Plumbago Lanka. We look forward to continuing to work with the Geological Services Mines Bureau, which has been very supportive, and other industry and educational sectors as the demand for Sri Lankan graphite grows. Plumbago Lanka plans to drive resurgence in this export-orientated industry and make a significant contribution to the local economy.”

The a representative from the BOI stated, “This project is very important to the BOI as our agency, from its inception, has sought to promote projects where value addition has been applied to local natural resources. Hence, the export of value added graphite will be beneficial to Sri Lanka’s economy. Graphite has many industrial applications and projects such as Plumbago Lanka will receive the continued support of the BOI.”

Graphite is commonly used in refractories, steel, lubricants, disk brake pads, and paints, with emerging applications in the lithium ion battery and fuel cell markets. The short-term demand is expected to grow at 4-5% (YoY), and this figure could rise to as much as 20% by 2020. Prices have tripled since 2005, primarily due to increased demand from BRIC countries and from the steel and automotive markets.

Sri Lanka is highly renowned for its crystalline vein graphite, with purity levels ranging from 80% to 99% carbon.