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8th November 1998

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Eppawala: going into a deal not knowing much?

By Mallika Wanigasundara

At a symposium organ ised by the Institution of Engineers during its 92nd Annual Sessions, on the government's proposals to sell a 90 percent share of the country's apatite deposits at Eppawala to a foreign consortium, Engineer P. G. Joseph made a relevant point. He said the Americans spent some one million dollars to develop a pressurised ball point pen for the use of astronauts in outer space where there is zero gravity. The Russian astronauts used a pencil.

He said, we seem to be embarking on a similar exercise with the apatite deposits. Sri Lankan scientists spoke in almost one voice against the deal in its present form. When we could process the apatite ourselves with local expertise, on a smaller scale to meet our own needs,we are instead on the path to deplete the deposits rapidly, cause irreparable damage to the environment and distress to poor farmers.

A summary of opinions expressed would go like this:

We have sizeable deposits of apatite, raw material for the manufacture of phosphate fertiliser. We have no idea of its extent. We have yet to determine it. We are entering into a deal without knowing how much exactly we have. The extent to be exploited by the multinational companies has been specified, 26.1 million metric tons, but a correct determination of reserves available will clearly have an impact on our present and future prospects.

The deal is favourable for the consortium and we stand to lose. The deal is expendable. US dollars 425 million for 65 percent of shares to IMC Agrico of the US and 25 percent of shares to Tomen Corporation of Japan is an offer which no foreigner would resist, say the experts. The puny, plodding Lanka Phosphates Ltd will get 10 percent of shares but free equity.

It is curious, but not so strange that government spokesmen were quick to highlight the drawbacks of the product they were trying to sell, in the first two paragraphs of the Report of the Negotiating Committee.

Eppawala apatite is said to be unsuitable for short term crops such as rice and vegetables because of its low solubility. It is said to have high levels of impurities. But scientists like Prof. R. P. Gunawardene, Dean of the Faculty of Science, University of Peradeniya contest this suggestion. Prof. Gunawardene had researched the apatite for 24 years and developed processes for conversion into fertiliser, which have been patented in the US, Britain etc.

Our total needs of phosphate fertiliser would be in the region of 150,000 metric tons i. e. single Super Phosphate (SSP) less expensive, but less soluble; Triple Super Phosphate (TSP) more soluble, but more expensive than SSP; Di Ammonium Phosphate (DAP) almost fully soluble, leaving hardly any residue, but expensive. It is however used only in nurseries and we need very little.

The University of Peradeniya, Prof. Gunawardene said, has developed five processes and the IFS one process. India meets 65 percent of her needs from SSP, said Dr. C. R. Panabokke, former Director of Agriculture, a soil chemist and a member of the National Science and Technology Committee. I M C Agrico/Tomen combine will manufacture 600,000 tons of DAP and export 400,000. It will unload 200,000 tons on the local farmer when he does not really need this variety.

Both Prof Tissa Vitarana and Dr. Panabokke pointed out that our soils have built up high levels of phosphates and need only a topping of SSP or TSP. Speakers urged the setting up of a 150,000 ton plant. New Zealand did offer in 1997 to set up a small plant for US dollars 20 million which would occupy 8-10 hectares.

It was also urged that before we enter into an agreement with foreign multinationals we should investigate their record, especially in regard to the environment. This is a valuable, non-renewable resource and we should have a more comprehensive knowledge about whom we are dealing with.

There was consensus that local scientists should initially draw up a proposal to exploit the apatite ourselves. Prof. Gunawardene said: "The time for talking is over. We have been talking for over two decades. Our engineers should get together to get a local project going."

Prof. Tissa Vitarana former Director of the MRI, Prof. of Microbiology, University of Sri Jayawardenepura and adviser to the Minister of Science and Technology spelt out the pros and cons of this controversy. Much of the foregoing was referred to by him and needs no repetition. He dealt with the undetermined extent of the deposit and the imperative need to inform ourselves of the magnitude of the asset. He estimates a survey would cost around US dollars three million.

Prof. Vitarana after dealing with the impact on the environment, on employment generation and infrastructure development, outlined some other factors. If the deposits turn out to be larger than estimated now, the country stands to lose.

One of the more serious environmental impacts would be the release of one million tons of phosphogypsum as waste every year. This would be dumped in Snug Cove filling it up. Other wastes and effluents will be flushed into Trincomalee Bay, polluting the water and affecting marine life.

The US Environmental Protection Agency says that Phosphogypsum contains radium, which breaks down into radon which is carcinogenic.

Prof. Vitarana also pointed out that at the time the tenders were called in 1992 world prices of phosphate fertiliser were the lowest in 20 years. The situation is now different and there is an upward trend in prices. We should not allow a company to dictate to us now. To this Dr. Panabokke added that we should look at a horizon of 150-200 years when the supply of phosphates worldwide would become tight and as a limited resource it would become a strategic material.

While we may at the moment be thinking of phosphates for the manufacture of fertiliser, there are a myriad more uses for it. Prof. Gunawardene named some of its industrial uses: in pharmaceuticals, animal feeds, as baking agents, water softeners, in textile manufacture, detergents, ceramics, laundering and in the making of bombs and grenades.

Freeport McMoran Resources, partners of the US firm which brought in the proposal first has since merged with IMC Global INC of the US and become IMC Agrico. Prof Vitarana referred to McMoran's poor track record as a polluter in three countries: New Guinea, Irian Jaya, Indonesia and in the US itself where it has violated pollution control agreements.

Prof. Vitarana also declared that the 10 percent equity was woefully inadequate. In a similar deal on a phosphate mine, Jordan got 40 percent equity. In addition the US dollars 500,000 Escrow account, to cover environmental damage he found very inadequate and urged that it should be enhanced. He also suggested that a bond be signed up- front for re-settlement of people and their welfare.

At this point I would like to refer to D. L. O. Mendis who led a self- appointed mission to the USA to do what he could to avert this deal. A paper by him was circulated while he was attending the Pugwash conference in Mexico. In the course of the paper he read at the Pugwash conference he made a case to save this national heritage area. To summarise what he said:

"One of the reasons for the gradual extraction of apatite to meet only local needs is because the Eppawala deposit is in the heartland of the ancient irrigation systems of Sri Lanka. These are part of the cultural heritage of Sri Lanka. River diversion systems and the water of reservoirs are delivered by gravity for irrigation. They check rapid runoff thereby reducing soil erosion. Hence there are water and soil conservation ecosystems. This system includes the large Kalawewa reservoir with a water spread of 2000 hectares, and the transbasin contour canal Jayaganga. The Jayaganga, a combined irrigation and water supply canal feeds innumerable little tanks in the valleys."

The Pugwash conference rapporteurs say the following on Mr. Mendis's Paper: "The case involves the imminent destruction of an ancient water and soil conservation ecosystem in the pursuit of short term financial benefit... The displacement of population is likely to increase tensions and perhaps contribute to sectarian violence... In an effort to head off the mining project an appeal is being made to UNESCO to recognise the site as a cultural heritage site."

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