Industries using dolomite residues as raw materials hang on a thin line

Domestic price of dolomite increases from Nu 100/MT to Nu 1,250

While those involved in the dolomite businesses say the price is very high, DGM contends that the quality of dolomite supplied now is of superior quality to what used to be supplied earlier

For a prolonged period, industries involved in making products from dolomite were waiting for the domestic price of dolomite to be fixed, so that they could plan their businesses accordingly. While the price has finally been fixed, stakeholders of the industry are crying fowl, saying that at the current rate, they will not be able to generate any profit, which may entail in the closure of the firms.

On December 26, 2022, the price was set at Nu 1,250 per metric ton (MT) for the local industries, by the multi-sectoral price fixing committee (MSPFC), which determines the domestic price for minerals in the country. Although MSPFC was constituted to fix the price of minerals for domestic industries and markets on August 18, 2022, they were unable to do so.

 However, the rate fixed is not different from what the State Mining Corporation Limited (SMCL) has been charging since it began supplying dolomite to national enterprises, after SMCL took over dolomite mining from Jigme Mining Corporation Limited (JMCL). The unofficial price of Nu 1,250 has been made official now by the committee.

Earlier when JMCL operated the mines, the local industries used to get dolomite at Nu 100 per MT. With SMCL charging Nu 1,250 for the same, purchasers were keeping their machines rolling from raw materials bought earlier from JMCL, hoping that the price would decrease.

While the local industries were waiting for almost a year or two for the MSPFC to fix the domestic price of the dolomite, hoping that it would be at least lower than Nu 1,250, on December 26 2022, the then ministry of economic affairs, now the Ministry of Industry and Commerce and Employment, issued a notification stating that the domestic price of the minerals has been fixed.

MSPFC consists of representatives from Druk Holding investment (DHI), the then Ministry of Economic Affairs (MoEA), Ministry of Finance (MoF), and Bhutan Chamber of Commerce and Industry (BCCI). The Department of Geology and Mines (DGM) as secretariat to the committee is responsible to propose the prices of the minerals upon consultation and approval of the Chairperson.

Concerning the arrival at the rate of Nu 1,250 per metric ton, officials from DGM said that the differences in prices between what used to be supplied earlier and now is due to the quality of dolomite that industries would get.

“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,” an official from DGM said.

Meanwhile, Palden Tshering, Head of operations of Chhundu Power plant in Gomtu said, “The end product that is produced here are priced at around Nu 2,250 per MT, which means, there is no profit at all, after calculating the production cost.”

 “At the moment, buying the raw materials from SMCL at Nu 1,250, we are only able to roll the business without any profit,” he added.

Chhundu Power plant in Gomtu produces fertilizers for the tea gardens from the dolomite powder and exports it to India and Bangladesh. They also produces dolomite powder for supply to fisheries.  As dolomite contains calcium, the powder is used to clear the water for the fisheries. 

 There are around five industries in the country namely, Bhutan Crushing Unit in Samtse, Chhundu Powder Plant in Gomtu, and Khenpa pvt limited in Phuntsholing, Jigme industry and Samden Dolomite, who are involved in the business.

Tshering Pelden from Thimphu