The government has begun preparations to revive Udayapur Cement Industry, a state-owned cement factory that has been inactive, by restoring its licence to extract the raw materials required for production.

The Cabinet has renewed the company’s licence to extract limestone and red soil, reversing the cancellation of the licence in September 2024. The Ministry of Industry, Commerce and Supplies had formally informed the company in February 2025 that its limestone extraction licence had been cancelled and removed from departmental records.

The Cabinet decided on July 2 to reissue the previously cancelled licence under Section 12(3) of the Mines and Minerals Act, 1985. The decision authorises the Department of Mines and Geology to issue the extraction licence to Udayapur Cement Industry Limited.

The government has also agreed to settle the company’s outstanding dues to the Department of Mines and Geology. The Ministry of Finance will provide Rs. 7.49 million owed by Udayapur Cement Industry, with sources saying the amount has already been provided to the department in line with the Cabinet decision.

The government is now preparing to appoint a general manager and resume the industry at full capacity. Udayapur Cement Industry currently has a production capacity of 800 metric tonnes per day.

Established in 1987 with financial and technical assistance from the Japanese government, Udayapur Cement Industry became Nepal’s largest cement company in fiscal year 2016/17.

The factory is located in Jaljale, Triyuga Municipality-11, Udayapur, within a forest area. Its infrastructure includes a ropeway designed to transport limestone from Sukoura in northern Udayapur to the factory for cement production.

The latest government decisions mark a move to restore the operations of one of Nepal’s major state-owned industrial enterprises. The government is now preparing to bring the factory back into full-capacity operation after resolving the licensing and outstanding payment issues that had stood in the way of its revival.