High-Grade mineral sands project balances wealth and ecological risk
View(s):By Bandula Sirimanna
Sri Lanka’s most advanced mineral-sands venture, the Taprobane Minerals Project, formerly the Eastern Minerals Project, has reached a defining moment as investor interest grows, regulatory approvals near, and fresh environmental concerns emerge.
While Capital Metals PLC positions the project as a world-class resource development with transformative economic potential, newly detailed Environmental Impact Assessment (EIA) findings reveal a more complex, high-stakes picture along the island’s fragile eastern coastline.
The project’s potential and favourable economics were highlighted at a recent promotional event hosted by the Sri Lankan High Commission in London. Officials emphasised improving macroeconomic indicators, policy reforms and an upcoming Investment Protection Act aimed at strengthening investor confidence.
Capital Metals’ phased development strategy keeps upfront capital low. An initial US$25 million investment is expected to generate $35-40 million in annual revenue at sub-$20 million operating costs.
The total project requires $80 million, and despite higher taxes and royalties introduced in Sri Lanka, updated modelling shows a strong Net Present Value of $180 million.
Local partnerships are central to navigating regulatory complexities. Ambeon Capital’s $4 million investment for a 20 per cent stake has strengthened the company’s domestic presence.
The firm currently holds the only mineral-sands mining licence in the country and awaits two further approvals-licence expansion and export clearance.
With first production targeted for early 2027, Capital Metals argues that the Taprobane project represents a rare opportunity: a high-grade, low-cost, strategically located mineral asset trading at a market value well below its economic potential.
The project is located on the Akkaraipattu-Komari coastal belt in the Ampara District, Eastern Province, close to the towns of Pottuvil and Akkaraipattu. This 50-300 metre-wide stretch of beach known for its rich deposits of ilmenite, rutile, zircon, garnet and sillimanite has been divided into five sections: Tampaddai, Thirukkovil, Mulliadi, Omari and Sangamankanda.
The total recoverable heavy mineral content is estimated at 5.43 million tonnes, making it one of the highest-grade undeveloped deposits globally.
However, the Environment Impact Assessment (EIA) for the proposed mining operation offers a measured warning while granting overall clearance and concluding that the project’s economic benefits outweigh environmental costs.
The assessment identifies significant ecological risks. Two rare plant species, five endemic species and 12 nationally threatened plants have been recorded on the sand dunes set to undergo mining.
The report states that disturbing such habitats will have “major impacts on the ecology and biodiversity of the area”. Although lagoons and mangroves fall outside the direct mining zone, the EIA warns of indirect disturbances to wildlife due to dust, noise and vibration.
Strict mitigatory measures, continuous monitoring and early-warning systems have been recommended to prevent long-term ecological harm.
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