Lafarge, whose mining activities for extracting limestone were stalled last month by the Supreme Court, has admitted that it mortgaged tribal land in Meghalaya to international banks to secure a loan of $153 million. The mortgage is meant to finance its US$255m plant in Bangladesh.
However, it said the mortgage of the land as security to offshore lenders was approved by RBI in March 2005. The lenders include the Asian Development Bank, the International Finance Corporation, Deutsche Investitionsund Entwicklunggesellschaft, the European Investment Bank, the Arab Bangladesh Bank and the Bangla-desh arm of StanChart.
The Lafarge Surma Cement (LSC) project at Chhatak, Sunamganj, in Bangladesh, is fully dependent on supply of limestone, a raw material used for manufacturing cement, from East Khasi Hills in India.
The company needs the court’s approval to resume mining operations at the mortgaged land. The Bangladesh government is worried, it said, with the closure and wanted to pursue an early resolution to the issue with the Indian government.