Namnam to be asked to extend bank guarantee period until May '09
Petrobangla has directed Maddhapara Granite Mining Company Ltd (MGMCL) to ask the unfinished hard rock mine's North Korean developer Namnam to extend the term of $4.2 million bank guarantee till May 2009, sources say.
Although it is the task of Petrobangla, which signed the agreement with Namnam for developing the mine in 1994, MGMCL is now preparing to ask Namnam to extend the guarantee period till May 24, 2009.
Since June 2007, Namnam kept no bank guarantee against the unfinished work of the mine and Petrobangla did not take any action against the North Korean company.
The government accepted the unfinished mine from Namnam in May last year on condition that Namnam would finish a number of incomplete tasks within a one-year guarantee period till May 2008.
However, as Namnam did not finish any of these tasks, the government extended the guarantee period till May 2009, once again asking the company to finish the work.
The MGMCL on May 26 at a meeting with Namnam identified as many as 35 defects or outstanding work at the mine.
Some of the very important tasks include non-construction of a Skip Replacement Building, non-supply of Main fan with reversal system, flawed roadways in three levels, flawed permanent support of underground pump station and unfinished stope preparation work.
Of these, the work for stope preparation alone requires a cost of Tk 30 crore.
On June 16, the energy ministry held a review meeting on the mine. It observed that the mine was taken over in May 2007 with the condition that Namnam would do the unfinished work, which it did not do. There are still five major faults in the mine.
The meeting identified that there was 2.5 lakh tonnes of unsold hard rock worth Tk 8.3 crore at the mine's stock yard. However, the Roads and Highways Department was interested to buy 1.6 lakh tonnes of rock.
The mine is costing the nation $158 million dollars. An Investment Committee in 2005 identified that $120 million has been invested in the mine.
Of this sum, Bangladesh paid more than $71 million though it is the borrower, while lender North Korea gave $49 million. But as the project was going nowhere, MGMCL has conditionally taken over the unfinished mine in May last year.
The mine was supposed to produce 16.5 lakh tonnes of rock annually or 5,500 tonnes daily since 2000. Instead, it is now producing 1,100 tonnes a day as some work remains unfinished.
The country annually consumes 60 to 70 lakh tonnes of imported rock, but MGMCL's rocks are failing to attract even the government-owned buyers.