Until two months ago, a stone quarry in Udzorong, Trashigang, which was established since 2012 was a success story.
The Chiya stone quarry and a crushing unit that produced 30 tons of stone aggregates per hour to meet the local demands, had to shut down.
Local operators claim that their business has been affected after the State Mining Corporation Ltd (SMCL) established a crushing unit near Doksum in Trashiyangtse and a stone quarry in Bartsham, Trashigang.
Chief executive officer (CEO) of Chiya stone quarry and crushing unit, Kinley Tenzin, said that given the small local market, SMCL’s establishment has led to the closure of their business.
Along with his unit, he claimed that the SMCL’s crushing unit is also operating at loss today. “It is ironic that none of us has benefitted with this move.”
SMCL’s crushing unit has a capacity of producing 200 tons of stone aggregates per hour. However, it was learnt that the unit is only functioning at about 10 percent of its full capacity today.
Kinley Tenzin said the local market for stone aggregates is less than 20 tons. “Our business was surviving only from the petty contractors involved in building small houses and other infrastructures,” he said, adding that those contractors constructing roads have their own crushing units and do not buy from them.
Another operator in Trashigang, who did not wish to be named, said their business is badly affected with the establishment of SMCL’s unit.
“The government’s policy to promote private sector is blatantly defeated in this case,” he said. “We cannot compete with a government agency when we are not able to sell even a truckload of stones.”
He said that SMCL’s unit was established for Kholongchu project but with the delay in the project, the unit has started selling to the domestic market, affecting the business of the local operators.
SMCL’s chief executive officer, Kezang Jamtsho, said the lease agreement of the unit states that the crushing unit is established to provide aggregates for both Kholongchu project and domestic market.
He said the market is for competition in the sense that if there is more competition, customers are benefitted.
Kezang Jamtsho said that to enable a level playing field, SMCL maintained the price of the aggregates equal to that of the local operators.
“Our objective is to operate at breakeven, which has not been possible currently. But shutting our unit down would mean more loss to us,” he said.
Kinley Tshering, however, said that establishing a large crushing unit would have helped if the main civil works at Kholongchu project started.
“Once the project picks up, there would be a huge requirement of aggregates which would be beyond our current capacity to meet the demands,” he said. “SMCL could have operated once the main civil works began.”
The main package of civil works for Kholongchu project, which should have begun at the beginning of the year, is yet to commence.
Meanwhile, residents in Doksum say they benefitted from the new SMCL crushing unit.
A resident, Sangay Khandu, said it was difficult for them to get aggregates from nearby places before the unit was established. “We had to wait for days, sometimes weeks. Other times, we had to go all the way to Chiya which was expensive.”
Younten Tshedup | Trashigang