After 11 years of losses, Maddhapara mining company turns profitable

After clocking losses for more than a decade, the state-owned Maddhapara mining company finally looks for better days ahead.

Maddhapara Granite Mining Company Ltd (MGMCL) has, in fact, recorded a profit in the past two financial years for the first time since it began commercial operations in 2007, and is likely to end the current fiscal with flying colours too.

The company made a profit of Tk 7 crore in 2018-19 and Tk 22 crore in 2019-20 after reporting losses for 11 years, according to its latest annual report.

In the previous fiscal, the company produced a whopping 1.67 million metric tonnes (MT) hard rock and sold 721,000 MT at Tk 163.14 crore. Similarly, it produced 823,000 MT and sold 863,000 MT at Tk 207.81 in 2018-19.

Officials at MGMCL claimed the mine is expected to cross a benchmark of Tk 50 crore in its profit margins at the end of the current financial year.

"Our target was a profit of Tk 100 crore in this fiscal, but the pandemic forced us to suspend operations at the mine for about five months, from March 26 to August 12 in 2020, and cut down on our expectations," a senior official told UNB.

However, as per the annual report, the company's cumulative loss still stands at Tk 593 crore because of 11 consecutive years of losses due to "various obstacles" in its operations.

Sources blamed a vested interest group for irregularities that blocked the company's various developmental moves over the past 11 years.

Maddhapara granite rock mine was discovered by the Geological Survey of Bangladesh (GSB) in 1974 at Parbatipur in Dinajpur district at a depth of 128-136 metres from the surface covering an area of 1.2 square km and having a mineable reserve of 174 million MT.

After a number of feasibility and other studies, North Korean firm NAMNAM was appointed and it started development of the mine in September 1994.

After developing the mine, NAMNAM handed it over to MGMCL in May 2007. The MGMCL operated the mine under its own management, but failed to make any profit and finally a Belarusian firm, Germania-Trest Consortium (GTC), was appointed as an operator.

The mine is now producing 6,000 MT rock a day surpassing the previous target of 5,500 MT. “Now we’re thinking to further increase the production capacity,” said another senior official at MGMCL.

He hoped the company could reach the target of 1.1 million MT of annual production well before three months.

Officials at MGMCL said the Maddhapara mine kept its operation in full swing while the workers of the adjacent Barapukuria coal mine went on leave during the peak of Covid-19 this fiscal.

At present, 750 workers, including over 100 foreign experts and 50 local engineers, are working in the mine.

Hard rocks are supplied to the country’s different mega projects, including Roopur Nuclear Power Plant and Payra Coal-fired Power Plant, and also for the construction of four-lane highways, airport runways, flyover and railway tracks, said Senior Secretary at Energy and Mineral Resources Division, Anisur Rahman.

Official sources said that GTC remained engaged in the operation of the mine under a contract signed in September 2013 worth $171.86 million USD (equivalent to Tk 1,400 crore).

After completion of its tenure, the GTC’s contract was extended by a year by the government, which will expire in July this year.

However, the Energy and Mineral Resources Division of the government has been in a dilemma over awarding a fresh contact to the existing operator.

Official sources at MGMCL said they had moved to appoint a new operator through tender process. But that tender had to be shelved due to Covid-19.

However, State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said that his ministry is yet to take any decision in this regard. "We’ll take a call only after consultation with Prime Minister Sheikh Hasina," he told UNB.