Cement factories in Parsa-Bara corridor rely on imported raw material

BIRGUNJ, April 9:

Against a backdrop of abundance in limestone available in the country, cement factories in Nepal closer to becoming self-reliant. However, growing limestone import figures show that these factories are not using limestone available in the country.

Owners of cement factories say licenses of limestone mines are occupied by those who are idle compelling cement factories to import raw material.

There are a dozen cement factories in the Parsa-Bara industrial corridor which produce a total of 7,450 tons of cement every day.

However, these factories import 80 percent of their total raw material from India as the supply of domestically-sourced limestone and clinker covers only between 15 and 20 percent of total raw material.

Narayani Cement General Manager Umesh Chandra Thakur says that those with mining licenses do not have the necessary infrastructure so cement factories are dependent on imported limestone from India.

Operators of cement factories also say that their factories can have higher capacity utilization if local limestone is available. There are no limestone mines in the districts of corridor. The closest limestone mines are in Makawanpur but they are occupied by idle license holders.

The Birgunj Customs Points has recorded import of 420,159 tons (worth Rs 2.85 billion) of clinker between mid-July last year and Tuesday. This is an increment of 5 percent compared to the same period last year. The country imported clinker worth Rs 3.40 billion last fiscal year. Experts say the use of limestone available in the country to produce clinker -- a major raw material -- would have helped to at least narrow down the ballooning trade deficit.

Two years ago, the Department of Mines and Geology (DoMG) had started taking action against 38 mine exploration license holders and asked them for clarifications on why they had not started work in their mines.

Those licenses dated back to 2005. An exploration license for a study of mines is issued for a maximum period of four years and DoMG issues a mining license permitting excavating within six months thereafter.

The Commission for the Investigation of Abuse of Authority took the files of those exploration licenses while DoMG was preparing to scrap their licenses, giving a minimum of six months' grace period to start excavation work. CIAA, in November last year, returned the files to DoMG without finding any fault and thereafter DoMG has forwarded 22 licenses out of the 38 to The Ministry of Industry (MoI) but MoI is yet to decide on the fate of those.

Narayani Cement's Thakur says that being self-dependent in cement production will be limited to only a slogan if any step is not taken to utilize domestically available raw material.

Talking to Republica, Rajesh Kyal, the promoter of Star Cement Industry said that most cement factories have been limited to only 'grinding units' due to the unavailability of the mine licenses.

Source: Republica