Nepal tapping India, China's help to revive magnesite plant

Monday, 22 September 2003, 07:00 Hrs
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KATHMANDU: Nepal is trying to bring together Indian expertise and Chinese investment to tap what has been described as one of the finest magnesite deposits in South Asia.

Nepal Orind Magnesite Private Ltd., an Indo-Nepal joint venture set up in 1979, ran into many problems and has been inactive for the past two years. For a fresh lease of life, Nepal Orind is now parleying with a Chinese and an Indian company.

"We approached the Shanghai Group investment company in China," Kabin Dhungal, secretary of Nepal Orind's board of directors, told IANS. "In November, their technical group representatives will come to Nepal for site inspection."

To run the plant, Nepal Orind has been negotiating with the Maithan Group based in Jharkhand.

Nepal Orind was set up with the target of producing 50,000 tonnes of magnesite per annum. Substantial deposits of the mineral have been detected in Sindhupalchowk district in central Nepal, close to the Tibet border.

The firm was a joint venture between the government of Nepal, which holds 75 percent of the shares, the Orissa-based Orind Group, which holds 12.5 percent shares and the Kathmandu-based Khaitan Group that holds the remaining 12.5 percent.

Though trial production began in 1987, the plant, employing around 300 people, was not able to meet its target due to technical problems and lack of capital.

For the last two years, it remains virtually closed, producing only small quantities of talc powder. The staff has been whittled down to about 60, most of whom are security personnel, and Orind is reportedly trying to offload shares.

"It is a pity," says K.P. Kaphle of the department of mines and geology, the state agency for mineral and oil exploration.

"These are open mines which do not need substantial digging. They also have both road and power connections. Finally, the reserves have high-grade refractory magnesite. Yet Nepal has not been able to tap the potential."

Magnesite is in demand in industries using high-temperature furnaces where the lining is made of magnesite bricks.

India and China would be the two ideal markets for Nepal. But at present both, Kaphle says, use magnesite from South Korea.

"Though low-grade, the Korean magnesite is transformed by the high technology Korea has," he says.

Besides hoping for the success of talks with the Indian and Chinese firms, the company is keeping its fingers crossed that the dry dock at Birgunj built to facilitate transport of cargo between India and Nepal would become operational.

Connected to India by rail, the World Bank-funded project has not taken off due to the absence of a Railways Act in Nepal.

Once functional, it would cut down transport costs by 40 percent.

"Nepal Orind has a plant for processing magnesite bricks at Birgunj," says Kaphle. "If the dry dock becomes operational, it will be a great incentive for starting the plant again."

Source: IANS
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