Nov 14, Colombo: Sri Lanka's investment promotion agency, Board of Investment (BOI) has signed an agreement with Plumbago Lanka (Pvt) Ltd for a venture that will invest US$78 million over the next 4 years to mine and export value added graphite.

Plumbago Lanka, an Esna Group company plans to make a significant contribution to the local economy by investing US$20 million initially to revive the export-orientated industry.

Plumbago Lanka, under the direction of Eshana De Silva, the Chairman of the Esna Group of companies, will hold a 25% stake in the venture.

The BOI has said the project is very important to the BOI which has sought to promote projects where value addition has been applied to local natural resources and the export of value added graphite will be beneficial to Sri Lanka's economy.

Graphite has many industrial applications and projects such as that of Plumbago Lanka (Pvt) Ltd will receive the continued support of the agency, the BOI has said.

The BOI last month signed a US$ 15.2 million agreement with Sarcon Development (Pvt) Ltd. of Sri Lanka to export value added graphite.

Sri Lanka's crystalline vein graphite has high quality with purity levels ranging from 80-99% of carbon.

The short term demand for graphite is expected to grow at 4-5% and may rise to as much as 20% by 2020.