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If the economic affairs minister’s stand on the disputed Mines and Minerals Bill 2020 is any indication, there are chances of breaking the said deadlock. A middle path seems to be the way forward with the National Assembly insisting on not excluding, totally, the private sector and the National Council adamant on nationalizing mines.

 Harmonization is the word today even as the joint parliamentary committee relooks into the Bill and conflicting laws related to mines and minerals in the country. It has been 26 years since the Mines and Mineral Act came into force. Attempts had been made in the past to amend it, but in vain. There is some urgency in amending the Act passed in 1995.

The government doesn’t want a total closure of mines, but agrees that strategic mines should be managed by state owned enterprises. This allows private sector involvement in non-strategic mines. While what a strategic mine is not defined, the mines and mineral policy 2017 defines strategic minerals as those minerals that have wider implications on the economy in terms of its scarcity and importance for domestic industries or rare and high value minerals with security implications.

Given the limited natural resources we have, all minerals mined today seem to be strategic. The Council’s stand is derived from the Constitution which states that natural resources belong to the people of Bhutan, and also on the basis that the Constitution mandates the state to “minimize inequalities of income, the concentration of wealth, and promote equitable distribution of public facilities among individuals and people living in different parts of the Kingdom.” 

At the same time, when the private sector is still considered the “engine of growth” including job creations, shutting out the private sector totally would be a difficult decision for a ruling government. Those in the mining sector can be a powerful lobby group. They have the resources to influence government decisions. We can surmise that except for a few ministers, not many have association with the big private sector names. This gives them the advantage to look into the Bill and support it for general benefits and not only a handful of rich miners.

The statistics are interesting if not alarming. A comprehensive study the National Council carried out in 2013 found out that mining and quarrying activities in the country are neither economically optimized nor are they socially equitable, or environmentally sound. It is said that one Bhutanese in the mining sector earns as much as  16,000 or more other Bhutanese. If the inequality is that stark, the study also found loopholes and recommended the government to  ensure that all the mining and quarrying companies file the annual tax return properly.

Finding a middle path seems to be the way out. One big problem is in defining our private sector. The private sector is just a handful of people or a few business houses. If all the mines are taken by the state or given to the State Mining Corporation of Bhutan, the so-called SOE in this context, it would deprive private sector participation. The suggestion of 48 or 49 percent private participation through shares sounds logical. From experience we know that SoE’s participation in auction can make a difference by, for instance, breaking the consortium of the private sector.

The Mines and Minerals Bill 2020 is the most debated Bill. It is good that there are disagreements and  we are exploring all angles to ensure that our scarce resources do not fall in a few hands or are mismanaged. After all the debate and discourse, we should have sound policy over our scarce resources. 

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