Sri Lanka Targets Value-Added Mineral Industry

COLOMBO (News 1st); Sri Lanka has launched a major overhaul of its mineral sector with the implementation of a new National Mineral Policy, aimed at eliminating corruption, boosting transparency, and unlocking investment opportunities across the industry.

The policy, which came into effect yesterday, is designed to transform a sector long plagued by inefficiencies and allegations of fraud, while creating a more structured and investor-friendly environment, according to the Ministry of Industry and Entrepreneurship Development.

For years, Sri Lanka’s mineral resource sector has faced serious concerns over opaque practices and weak regulation. Official data shows that since 1993, a total of 471 exploration licenses have been issued, yet only around 28 have progressed to mining licenses, and just eight of those remain actively operational. 

Authorities have also uncovered that many license holders have used these permits not for genuine exploration or mining, but as tools for stock market manipulation.

The newly introduced policy seeks to correct these shortcomings by introducing a transparent system for exploration and investment. It also places a strong emphasis on retaining value within Sri Lanka by encouraging local processing and value-added production, rather than exporting raw mineral resources.

Minister of Industry and Entrepreneurship Development Sunil Handunnetti emphasized that the new framework will regulate the entire mineral value chain, from exploration through to processing and commercialization.

“Under this new policy, our primary focus is to regulate the entire process, from exploration to mining, processing, and value addition. Going forward, all exploration activities will be conducted through the Geological Survey and Mines Bureau. The results of these explorations will be officially gazetted, after which Expressions of Interest will be openly called, and investments will be awarded through a transparent process,” he said.

A key feature of the policy is its shift toward prioritizing value addition within the country, with the government aiming to move away from the traditional model of exporting raw materials with minimal economic return.

“The core objective of our new policy is to stop exporting mineral resources as raw materials without adding value. We have already conducted raids in areas like Kotikambokka in Wellawaya. For example, when quartz is processed and value is added, it can be transformed into high-value products, even reaching gemstone-level quality similar to diamonds. This presents a major opportunity for value addition. Even the raw blocks that are exported can be processed further to achieve higher value. Currently, the true value of our natural resources is being realized by other countries,” the Minister added.

The government has also highlighted the need for stronger local participation in the sector, urging domestic investors to take advantage of the opportunities created under the new policy framework.

“A large number of applications for exploration licenses have come from foreign parties, as they clearly understand the value of these resources. However, we are urging our local investors, industrialists, and producers, even those from other sectors, to come together, collaborate, and invest in value-added mineral industries. If competitive bidding is dominated by foreign companies, we will have limited alternatives. It is disappointing that more local investors are not stepping forward. We assure full transparency, with no special treatment given to anyone, and all investments will be called through open invitations,” Handunnetti said.

The implementation of the new National Mineral Policy is widely regarded as a critical step in reforming Sri Lanka’s resource sector, with authorities aiming to enhance accountability, attract sustainable investment, and ensure that the country fully benefits from its natural wealth.