Kelzang Wangchu | Samdrupcholing

Communities in the four gewogs of Samdrupcholing drungkhag allege that the State Mining Corporation Ltd (SMCL) is backtracking on its pledge to let them operate the Tshophangma coal mine after it floated tender.

The SMCL’s chief executive officer (CEO) highlighted the importance of public participation in working with SMCL for coal mining operations once the existing contract expires in February this year during the consultative meeting on January 13 last year.

Residents from the locality near the coal mine claimed that they started gathering fund by selling shares from December 7, 2020, after receiving their approval letter from the SMCL on November 26 last year and set up the office and a company, Pemi Dejung Kuenphen Private Limited in Samdrupcholing, Samdrupjongkhar.

Pemi Dejung Kuenphen Private Limited’s chairman, Sonam Wangdi, said that the community formed a tshogpa and established the office after the SMCL committed to giving the coal mining works at Habrang and Tshophangma to the public.

He said the tshogpa floated the shares and collected the funds to procure the earth moving equipment (EME) and wheel loaders after approval from the SMCL, adding that committed to purchasing the shares.

“Due to the second nationwide lockdown the villagers could not buy the shares as they were not able to sell their cash crops. We managed to collect more than Nu 30M from about 3,900 shareholders so far,” the chairman said. “The collection is still going on.”

The chairman said after seeing Tshophangma coal mining’s tender announcement in the media earlier this month people lost interest in purchasing the shares.  “Some are concerned about not getting their money back. SMCL could have discussed before they announced the tender.”

As per the SMCL’s letter to Pemi Dejung Kuenphen Private Limited on November 26 last year, the SMCL directed the tshogpa to furnish the certified assurance for Nu 189M as the first tranche of their financial resource. “Since the financial aid would be crucial to mobilising the EMEs, SMCL needs to be assured this amount available with the tshogpa.”

“We have submitted an estimation report to SMCL that we would be able to collect Nu 189M from the shares. But it was not a commitment,” Sonam Wangdi said.

“We also have concerns about the dividend as we have to declare it at the end of the year as we had sold the shares. SMCL should now have to tell us how and based on what we should declare the dividend as we collected the shares after their approval,” the chairman said.

The shareholders said that SMCL’s requirement of 30 EMEs is too much. “We are in a position to procure about 10 to 15 EMEs as we have more than Nu 30M at the moment.”

They said that the balance amount could be topped up by the bank loans to procure the EMEs and letter of credit facility from the machinery companies. They are hoping to collect Nu 189M as the collection of shares is still on.

A letter from SMCL to Pemi Dejung Kuenphen Private Limited on June 12 stated that the public would be allowed to participate in the coal mining operation at Habrang and Tshophangma once the present contract expires in February.

“But the community group should be a legal entity with their charter and by-laws, and the group should procure and own EMEs they would hire to the SMCL,” the letter stated, adding that the community hiring strategy would be same as that of Khothakpa gypsum mining in Pemagatshel.

According to an official from the SMCL, SMCL set two conditions: the community should be a legal entity and procure and own EMEs. “But they fail to procure and own EMEs they would hire to SMCL, and about Nu 30M won’t be enough to run the mines,” an official said.

“The two conditions were set because coal mining operations would be directly awarded to the community. Pemi Dejung Kuenphen Private Limited could not hire the machinery as the project should benefit all the members and shareholders without fail,” an official said.