Dinajpur’s Maddhapara Granite Mining Company Limited (MGMCL), the country’s only stone mine, faces significant challenges due to operational and marketing failures.
Talks of leasing the mine to the private sector have surfaced during this crisis. However, experts are urging for skilled management instead of privatisation.
Bangladesh Petroleum Exploration and Production Company Limited (Bapex) former managing director Mortuza Ahmad Faruque, who previously served as general manager of MGMCL, identified the lack of efficient manpower as the main challenge for MGMCL.
He emphasised the need for skilled personnel and minimal interference from authorities including Petrobangla and the Ministry of Power, Energy and Mineral Resources to resolve the company's crises effectively.
On the other hand, Petrobangla officials mentioned the increasing demand for stone due to development projects in the country, leading to imports meeting most of the demand.
Despite this, MGMCL struggles to sell its extracted stone, causing further decline in the mine's condition.
Although briefly profitable, MGMCL's financial problems continue, reducing hopes for recovery.
Kamruzzaman Khan, Petrobangla director of Operations and Mines, expressed dissatisfaction with the performance of MGMCL employees, leading to discussions on privatisation.
Despite some profitability, concerns over the mine's future management continue, he told The Business Post.
MGMCL repeatedly face management failures after NAM NAM exit
Discovered in 1974 by the Geological Survey of Bangladesh (GSB) and located in Parbatipur Upazila in Dinajpur, MGMCL's profitability led to a government contract with North Korea's Korea South-South Cooperation Corporation (NAM NAM General Corporation) in 1992.
Mortuza Ahmad Faruque mentioned that despite North Korea being a poor country, NAM NAM was technologically advanced but lacked the funds they needed.
“We had the funds, but the government did not provide the money they needed. At one point, propaganda against NAM NAM led to their departure, and MGMCL's crisis began,” he said.
Following NAM NAM's exit in 2007, MGMCL began commercial production but faced repeated closures due to incompetent management until 2012.
MGMCL management attempted to address losses through outsourcing, but this led to protests, exacerbating the crisis until approximately 2014, Petrobangla sources said.
In 2013, the government entrusted stone extraction to Germania Trest Consortium (GTC), a private contractor, amid ongoing challenges, they added.
Energy expert and geologist Professor Badrul Imam also said that continuous crises at MGMCL are due to incompetent and inefficient officers.
He referred to neighbouring India, where countless mines operate without foreign or private contractors, suggesting that Bangladesh's inability to operate its mines independently represents a state failure.
Contractor hinder MGMCL development
MGMCL's development faced additional setbacks due to allegations that its contractor, Germania Trest Consortium (GTC), obstructed progress and was involved in irregularities.
Bangladeshi Germania Corporation Limited, in consortium with JSC Trest Shakhtospetssroy from Belarus, won the tender for stone extraction from MGMCL in September 2013.
Despite an initial contract of six years to extract 9.2 million tonnes of stones, GTC only extracted 3.2 million tonnes by the contract's expiration in 2020, MGMCL internal sources revealed.
Allegations of extorting an additional Tk 250 crore and various irregularities also came to light.
When proposing a second contract, GTC faced opposition from most MGMCL officers, with claims that employees opposing the contract were coerced into transfers.
An employee, speaking on condition of anonymity, said that GTC's irregularities, such as inflating machinery prices and withholding wages, resulted in punitive transfers for those who protested.
Mortuza Ahmad Faruque criticised GTC's management, citing their lack of experience and disregard for agreements.
“They have allegedly violated various agreements but have not faced any penalties, instead receiving rewards,” he said.
He highlighted the absence of a consultant similar to Poland's Kopex during NAM NAM's era, which ensured proper supervision and employee training at lower costs.
However, GTC's Managing Director Javed Siddique denied all allegations. Instead, he blamed MGMCL employees' incompetence for the company’s crisis.
Outdated practices struggle to meet market demand
MGMCL also faced mounting challenges in meeting market demand as outdated practices hindered stone production and sales, according to its annual report for FY23.
With a production of 1.063 million tonnes of stone from mines, MGMCL could only sell 5,71,000 tonnes, resulting in a modest profit of Tk 17.31 crore.
Officials reported that nearly half of the produced stones remained unsold, reflecting the authorities' struggle to adapt to market preferences.
MGMCL Deputy General Manager (Marketing and Sales) Md Razeeun Nabi expressed efforts to enhance stone quality but noted a lack of interest from businessmen, who favour imports over domestic products.
Despite claims of high market demand for stones ranging from 5 mm to 40 mm, MGMCL's reliance on fixed crushers led to the production of larger boulder stones, which have limited market demand.
Hussain Mohammad Zakaria, a businessman, emphasised the market's preference for smaller stones and highlighted the inefficiency of breaking down larger stones using crushers, which reduce profitability.
Seeking anonymity, a senior engineer at MGMCL revealed the challenge of upgrading equipment to meet market demands, citing the cost involved in transitioning from fixed-speed machines to advanced crushers like impact crushers.
Efforts to obtain comments from MGMCL Managing Director Abu Daud Mohammad Fariduzzaman were unsuccessful.
