It takes about a year for a mine to be leased
The department of geology and mines (DGM) has received 23 applications for mining licenses since the adoption of the Mines and Mineral Management Regulations (MMMR) 2022 on January 14.
Both the private and public sectors are eligible to obtain mining licenses under the new regulations, which according to DGM, provide clarity on the way forward for the mining sector.
According to the department, however, the process of applying for a license and leasing the mine takes more than a year.
The DGM’s officiating director general, Tashi Tenzin, said that the DGM would issue permits to eligible applicants for exploration of minerals marble/crystalline limestone, limestone, gypsum, quartzite, talc and iron ore.
After the lifting of the moratorium, only one license is being processed by the department upon the fulfilment of the value addition criteria for exploration of quartzite at Chibi Chang under Dorokha gewog in Samtse.
The new regulations provide a strategic role for the State in the development of mines with the focus on value addition to minerals for backward and forward linkages in the country.
“The participation of the private sector is important and mines will be allocated for captive supply of eligible minerals to processing industries or for the supply of critical additives to multiple industries,” Tashi Tenzin said.
Prior to applying for a mining license, it is mandatory for the applicant to carry out mineral exploration, according to DGM.
If the explored sites are found geologically and techno-economically feasible for mining and the establishment of an industry, they will be leased as a captive mine for mineral value-addition. The promoter or promoters will also have to fulfil requirements for the establishment of the industry, he added.
Some applications were processed prior to the issuance of the moratorium but were kept on hold. The DGM will also process the pending applications in line with the new regulations, under which the applicants should meet the value addition requirement.
The officiating director general said the criteria, in general, did not change from what was spelt in the Mines and Minerals Management Act 1995. “In the revised Regulations, the eligibility criteria are more exclusively spelt for State-owned mining agencies among others.”
According to Section 22 of the regulations, a Bhutanese citizen as an individual or a proprietor of a licensed firm, a household, or a company shall not be eligible to obtain or operate more than two mining or quarrying leases at any point in time.
However, notwithstanding section 22 of the regulations, the limitation of two mining or quarrying leases shall not apply to the state-owned mining agency.
A company is eligible to obtain a mining lease for a captive mine to supply raw materials to its processing industry. A Bhutanese citizen having a licensed firm can also apply for a mining lease for a captive mine to supply critical additives to multiple industries.
However, a private individual or firm is not eligible to lease minerals that have been leased to the state-owned mining company.
The officiating director general said the department has leased Chunaikhola Dolomite Mine and Khothakpa Gypsum Mine to the State Mining Corporation Limited (SMCL) in line with the new regulations as they fall within the category of proven mineral reserve.
The DGM has not received applications from the State Mining Corporation Limited (SMCL) or other state-owned companies (SOEs).
The applications are now in different stages of approval processes – eligibility review by DGM, the rectification of technical reports by the applicant and processing clearances from the concerned agencies and public and the dzongkhags.
Applications for quarries, however, had not been placed under the moratorium and are processed without having to carry out explorations.
Participation of the private sector in the operation of mines and minerals was suspended in June 2020, following which the SMCL took over all existing mines that were operated by private companies.