6- 2007 - 08: 1   (Posted By: SINHALAYA NEWS EDITOR (c))
China, India eyeing Sri Lanka's phosphate deposit: Minister

(LBO) – China and India has expressed interest in Sri Lanka's rock phosphate deposits from which the government itself cannot make high grade fertilizer, a government minister told an economic forum in Colombo.

Sri Lanka's phosphate deposit in the north central region of Eppawela, has been a political hot potato for years, and attempts to develop it with a Western mining firm ran into stiff opposition.

"I have visited several Indian plants which have technology to add value to the rock phosphate, and China is also interested," Industrial Development Minister Kumar Welgama told an economic forum organized by the Ceylon Chamber of Commerce.

Welgama said the government itself was planning an 800 million rupee fertilizer plant that would make Single Super Phosphate (SSP) which was a low grade fertilizer.

"The value addition in SSP is low, but if you go for a public private partnership with 51/49 structure, it will be a better project," Welgama said

Processing the type of phosphate in Sri Lanka, a mineral known as appetite, into high grade fertilizer requires high levels of capital expenditure, which the Sri Lankan government cannot afford.

The government already has a small plant to process rock phosphate in Eppawala which makes about 50,000 tonnes of low soluble phosphate fertilizer.

Welgama said he would prefer a project that could add as much value as possible to the phosphate.

Sri Lanka imports all of its high soluble, Triple Super Phosphate requirements.

The mining group Freeport-McMoRan has also been eyeing the deposit for years and even got government investment approval to start a plant in 1997, but the project was cancelled due to opposition.

Welgama said there were outstanding court orders against the export of rock phosphate and the government had to operate within the rules.

China's booming economy has a voracious appetite for raw materials and its mining companies have been moving into developing countries, especially in Africa.