Dolomite prices for the local industry to be fixed soon

MoEA Minister says dolomite that SMCL would supply will be of a higher grade compared to the earlier ones and that SMCL is mandated to ensure adequate supply of dolomite raw materials to domestic industries at a reasonable price.

Bhutanese entrepreneurs involved in procuring dolomite residues to produce other products can now heave a sigh of relief as the Ministry of Economic Affairs (MoEA) will soon fix the prices of the residues. Due to the absence of a fixed rate, entrepreneurs were depending on their old stocks as raw materials, which were running out. Moreover, the MoEA minister also said that differences in prices between what used to be supplied earlier and now is due to the quality of dolomite that industries would get. Nonetheless, Lyonpo said that State Mining Corporation Limited (SMCL) is mandated to ensure adequate supply of dolomite raw materials to domestic industries at a reasonable price.

The issue started after the SMCL began operating after taking over the mines from Jigme Mining Corporation limited, (JMCL), at Gomtu, Samtse district. However, SMCL was not able to fix a price for dolomite residues or rejected components, which affected industries that use the residue as materials for making products and after value addition export it to India and Bangladesh. One of the industries almost decided to close its shutters, but is waiting for the SMCL to come up with a fixed rate.

Lyonpo Loknath Sharma, MoEA, said the prices shall be fixed in the next committee meeting which shall be convened soon. Lyonpo Loknath also said that a Multi-sectoral Price Fixing Committee (MSPFC) was constituted to fix the price of minerals for domestic industries and markets on August 18, 2022. Lyonpo said the slight delay has been caused due to the need for additional documents.

The committee is composed of the Secretary, MoEA, who is the Chairman. The Secretary, the Ministry of Finance (MoF), one representative from Druk Holding and Investment (DHI), and other representative from the Bhutan Chamber of Commerce and Industry (BCCI) are members and the head of the Department of Geology and Mines is the member secretary.

According to the Minister, MoEA, “The DGM as the secretariat to the committee is responsible to propose the meetings to fix the prices of the minerals upon consultation and approval of the Chairperson. Therefore, considering the urgency to fix the price, the 1st MSPFC was held on 13th October 2022. During the meeting, the discussions on fixation of the prices of dolomite, gypsum, and coal were initiated,” he said, adding that there was additional information required which the relevant agencies are gathering.

Meanwhile, local powdering units in the country showed concerns and expressed their woes regarding the price of the residues, apart from the high rate charged by the SMCL as compared to JMCL earlier.   

.When procured from JMCL, they said that the cost of raw materials was Nu 100 per metric tonne (mt), but SMCL was charging Nu 1,250, an increase of Nu 1,150, which those in the business said “is astronomically high.”

On this issue, the MoEA minister said that the differences in the prices of JMCL and SMCL are due to the grade of dolomite they supplied to the industries.  

He added that SMCL supplies the same grade of dolomite that is exported to India, while JMCL supplied only the rejects (mainly undersize/crusher dust) which were not exported. 

“This way too our powdering plants should be getting better prices while exporting as the grades of powder are better,” he mentioned.

 Meanwhile, the minister also added that SMCL is mandated to ensure an adequate supply of dolomite raw materials to domestic industries at a reasonable price.

 “Unlike in the past when JMCL was operating the mine, SMCL is currently supplying the good grade dolomite to the industries, not the rejects or residues. However, whether it is the same grade of dolomite exported or the rejects that are being supplied to our domestic industries, a price has to be fixed,” he said.

There are around five local industries using dolomite residues. The management of Samden Dolomite had earlier said that due to the silence on the part of SMCL about rates, they even decided to close the industry once. “We have been hearing from SMCL that the price will be fixed for the last two years; but nothing is happening. Without a fixed price on the raw materials, we will not know if we can sell at earlier rates and export. And in the meantime, we are running out of raw materials,” an official from Samden Dolomite said. The industry uses rejected dolomite to make fertilizers, which are exported to India.

The other industries are Bhutan Crushing Unit in Samtse, Chhundu Powder Plant in Gomtu, and Khenpa pvt limited in Phuntsholing and Jigme industry  

In an earlier interview, head of operations of Chhundu Enterprises, Palden Tshering, said they had stocked up raw materials which are about to be exhausted now. “We paid Nu 100 per metric tonne (mt) when the industry was under JMCL two years back. Since then there has been no fixed price for it,” he said. Additionally, he had said that once the price is fixed, they will be able to purchase from SMCL.

“We don’t know what price we may have to pay at the end. At the moment we are able to calculate rates etc as we are still using materials procured from JMCL two years back,” he had said.

Tshering Pelden from Thimphu