Granite mine slides into heavy losses
The Maddhapara Granite Mining Company Limited continues to incur heavy losses amid low production, lax marketing policy, miners' unrest and shortage of capital, said officials.
Since it went into hard rock production in 2006, the mine suffered a loss of at least Tk 93 crore till July 2010 with a staggering Tk 24 crore last year alone.
The mine was designed to produce 5,500 tonnes of rock daily in three shifts to keep it financially viable. But working a single shift it has produced only 800 tonnes a day till February.
However, after February, with cooperation of miners, its production shot up to 1,200 tonnes a day, the officials said.
The mine failed to increase the number of shift due to working capital shortage, they added.
Faruk Hossain, former managing director of MGMCL, in an interview with The Daily Star in May last year, however, said the mine would start its second shift within 2010 to cut losses.
North Korean company Namnam started developing the mine under a 1994 suppliers' credit contract with an aim to launch it before 2001. But the company neither provided the credit as promised, nor could it properly complete the construction. After a long delay, the mine launched commercial operation, but in incomplete state.
Sources said the mine's operation costs Tk 2.4 crore each month while its rock production hardly fetches Tk 15 lakh a day.
MGMCL Deputy General Manager Shamsul Mostafa said the company earned Tk 105 crore since August 2008 till date through 14 dealers.
The mine so far extracted 11.09 lakh tonnes of rock and sold around 7.00 lakh tonnes till April 4.
Around four lakh tonnes, piled up at the mine yard, have gone waste because of inappropriate crushing and sorting. The inventory was built to store only 40,000 tonnes.
However, Padma bridge project raises hope for the cash-strapped company to overcome its multiple problems including shortage of working capital and lack of room to stockpile the unsold rocks. Construction of this bridge may require an estimated three crore tonnes of rock.
But the 5.8km long Padma bridge project is yet to be started.
“If government procures rocks from us to construct Padma Bridge, the state-run company will overcome its monetary crunches,” said an official of MGMCL.
The mine has completed primary work to start a second shift by the end of this year ahead of Padma Bridge Project. This would help them at least double its production level.
The second shift would require 250 trained miners in addition to 292 miners working in one shift.
Though the country requires 60 to 65 lakh tonnes of hard rock annually -- way above the MGMCL'S production capacity -- the mine has failed to tap the market and attract buyers.
In fact, a huge pile of high-quality rocks at the mine's backyard is left unsold due to lack of buyers.
MGMCL DGM (marketing) Shamsul Mostafa said the sale increased slightly in the last one year, but it is not enough to meet the company's expense.
Sources said all the boulder rock produced at the mine has remained unsold due to its extra large size. But demand for crushed granite [5-20 inches] is increasing in the local market.
The mining authority sells boulder rock at $15 per tonne and crushed rock at $17 per tonne.
The mine is costing the nation $158 million. An Investment Committee in 2005 identified that a total of $120 million has been invested in the mine. Of this sum, Bangladesh paid more than $71 million although it is the borrower, while lender North Korea gave $49 million. But as the project was going nowhere, the MGMCL has conditionally taken over the unfinished mine in May 2007.
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