Thatta Cement said in a Karachchi stock exchange filing that Sri Lanka Ports Authority has not executed a land lease agreement with the company, despite "basic engineering being completed."
The cement plant is expected to have "operational conflicts" with a car transshipment facility, the filing said.
An environmental impact study is being conducted on industries around the port.
It was feared that cement dust from the plant would settle on new Indian-made cars being transshipped via the port.
An official familiar with Thatta Cement said the company respected environmental regulations and will comply with any requirements in Sri Lanka and they awaited the final environmental report.
However it was difficult to completely eliminate dust, he said.
Sri Lanka Ports Authority Chairman Priyath Wickrema said they were trying to find a solution to the problem as Sri Lanka still imported a lot of cement and it could use another grinding plant.
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