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

Meanwhile the multi sectorial pricing committee consisting of various representatives from MoEA, MoF, DHI and BCCI, is yet to hold a meeting to discuss the matter

The State Mining Corporation Limited (SMCL) has been operating for about two years after taking over the mines from Jigme Mining Corporation limited, (JMCL), at Gomtu, Samtse district. However, SMCL have not been able to fix a price for dolomite residues or rejected components, which is affecting industries which 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.

There are around five local industries using dolomite residues, which also include those that cannot be exported by SMCL. The management of Samden Group 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 Group 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  

As per the head of operations of Chhundu Enterprises, Palden Tshering, they had stocked up raw materials which is about to exhaust 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.

However, when they inquired, SMCL had responded saying that although the price is not fixed, they would charge Nu 1,250 per mt, an increase of by Nu 1,150.  Palden also said that as they are not the end users, they are unable to structure the price for the product that they export to India and Bangladesh.

He also added that the actual capacity of their firm is 40,000 mt and that they have been buying 40,000 mt of dolomite from JMCL at Nu Nu 4mn. If the price is increased to Nu 1,250, they will have to pay Nu 50mn. 

Meanwhile, the marketing director of SMCL, Sangay Rinzin said, “the domestic price is always regulated by the multi-sectoral pricing committee and they have already put forward the proposal for pricing.” The current price of Nu 1.250 has been determined as per the export price.  

The multi sectoral pricing committee consists of representatives from Druk Holding investment (DHI), Ministry of Economic Affairs (MoEA), Ministry of Finance (MoF), and Bhutan Chamber of Commerce and Industry (BCCI). The meeting is coordinated by the DHI. However, Pem Tshering, Board member of SMCL from DHI, said that the meeting will be coordinated by the department of geology and mines (DGM). The paper could not contact officials from DGM.

But those involved in the business say “they have been hearing the above from last year; and a meeting has not been conducted.”

Meanwhile, the marketing director said that SMCL has been asked to handle the industry only till the Covid situation. That is why they couldn’t act fast on the price.

Additionally, the head of operations, Chhundu enterprise 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 Jigme Mining two years back,” Adding to it is the current price SMCL is selling for. “However, SMCL has also been clear that if we buy from them, they will adjust the price once the price is decided but in the meantime how do we price our products,” he questioned.

He added that they would be grateful if someone could tell them what they should do, because if SMCL doesn’t fix the price in the next two months, then it could be the end of his powder unit. “And we don’t have the financial capacity to pay Nu 1,250 per mt,” he said.

Tshering Pelden from Thimphu