The Indo-Bangla trade relation that received an impetus after the recent visit of Prime Minister Sheikh Hasina to New Delhi stands to suffer setback due to abrupt suspension of limestone mining by Lafarge in the Indian state of Meghalaya due to court intervention.
The Indian Supreme Court February 5 last restrained the French cement giant, Lafarge, from carrying out mining of limestone at east Khasi Hills in Meghalaya for its integrated cement plant at Chhatak in Sunamganj saying the extraction of limestone cannot be allowed in the eco-fragile region.
The US$280m Lafarge project - which has around nine per cent share in Bangladesh’s cement market is now in a state of uncertainty although the Supreme Court of India has allowed it to export the already extracted limestone to Bangladesh.
While talking to the FE exclusively on Wednesday, Finance Minister AMA Muhith said: "We are really worried about the interim stoppage of limestone supply, as the company will face serious trouble if the extraction of limestone is shut permanently."
Mr Muhith also said: "We are now pursuing the Union Government of India to settle the issue amicably and ensure continuation of limestone extraction from the Shella village of Meghalaya."
Lafarge has a long-term agreement to extract limestone from the area and supply those to its Bangladesh plant for cement production.
However, the country’s business community said such abrupt halting of limestone supply will have an adverse impact on the bilateral trade relations and hurt the growth of businesses on both sides.
Shahedul Islam, president of Bangladesh Chamber of Industries (BCI) said that the stoppage of limestone supply would not only hurt the cement company and its sponsors but also a large number of small investors who had invested in the Lafarge stocks.
Mr. Shahed added: "This company is equipped with a competent board of directors and has the state-of-the-art technologies and production facilities. But investors are incurring losses soon after the news of the stoppage of limestone extraction by Indian Supreme Court broke out."
The share price of Lafarge Surma Cement Ltd took a free fall since the interim order by the Supreme Court of India on February 7 in 2010 halting of limestone quarrying in Meghalaya.
The current share price, as of Wednesday, stands at BDT437 each, which rose to BDT660 back in July 2008.