Sri Lanka
Legislation
- Mines and Minerals Act 1992
- Mines and Minerals (Amendment) Act 2009
- National Environmental Act 1980
Regulatory Risk Rating
Regulatory Risk
Regulatory Corruption Risk
Regulatory Corruption Risk
Corruption Exposure Risk
Corruption Exposure Risk
| Regulatory Risk Rating Factors | Risk Level |
|---|---|
| First Come / First Serve | Subscribe |
| Application Criteria | Subscribe |
| Duration | Subscribe |
| Right to Renew | Subscribe |
| Competing Licences | Subscribe |
| Mineral Coverage | Subscribe |
| Right to Mine | Subscribe |
| Criteria for Mining Rights | Subscribe |
| Tenure | Subscribe |
| Surface Rights | Subscribe |
| Government Take | Subscribe |
| Transfer Rights | Subscribe |
| Change of Control | Subscribe |
| EIA Process | Subscribe |
| Power to Revoke | Subscribe |
| Age of Legislation | Subscribe |
| Other Factors | Subscribe |
Sri Lanka’s legal framework lacks sufficient detail and clarity and contains levels of government discretion high enough to raise considerable legal risk concerns. Given the fragmented nature of the licensing system and historical instances of weak implementation and enforcement, it is easy to see how international companies and investors could fall foul of the country’s regulatory landscape. When this is considered alongside restrictions on foreign investment, the relatively small size of the country’s mining sector beyond gemstones and the lack of international actors is understandable. Navigating the jurisdiction will be challenging and engagement with local counsel for the purposes of due diligence strongly recommended prior to even early stage decisions.
Contents
Legislation
- Mines and Minerals Act 1992
- Mines and Minerals (Amendment) Act 2009
- National Environmental Act 1980
Regulatory Risk Rating
Regulatory Risk
Regulatory Corruption Risk
Regulatory Corruption Risk
Corruption Exposure Risk
Corruption Exposure Risk
Overview
Sri Lanka has a relatively small mining sector – certainly from the perspective of foreign participation. It is a considerable gemstone producer and a leading exporter of sapphires and various other precious gems. The country is, however, very protective of its gemstone industry – wanting to shield the sector from foreign involvement and restrict large-scale mechanised gemstone mining in order to protect traditional mining methods and the local industry. Other minerals mined in the country include graphite, mineral sands, feldspar, titanium, zircon and limestone – with graphite and mineral sands projects the main areas of foreign activity and investment. Foreign experiences in the jurisdiction have not been without complications. In 2015, the National Gem and Jewellery Authority (NGJA) moved to further restrict foreign participation in the sector – with a policy not to grant or approve the issuance of any licence for gemstone mining to companies with foreign ownership. At the same time the Sri Lankan president also cancelled 16 licences issued by the previous government to foreign companies for the purpose of gemstone mining. Controversies have also arisen in relation to mineral sands activities. In 2021, Australian company Titanium Sands had its exploration licences, (held through a Sri Lankan company via subsidiaries in Mauritius), cancelled by the mining authority on the basis that the terms and conditions of the title had been breached. That being said, TSX Venture Exchange listed Ceylon Graphite has been successfully conducting exploration in the country since 2017, with several projects progressing on to development.
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