Mineral resources belong to the state – DHI

All mineral resources should be with the state, the same way hydro energy is harvested according to Druk Holding and Investments (DHI).

During its annual press conference, DHI chief executive officer, Dasho Karma Yezer Raydi said the Constitution guarantees the rights over mineral resources, rivers, lakes and forest to the state, which shall be regulated by law.

“In the same way hydropower has brought up larger benefit to the citizens, mineral resources should benefit the whole nation,” he said.

However, he said, mineral resources are currently being exploited by few individuals bringing about income inequalities in the society,

which is also not in the interest of the Constitution.

Mining, he said is one of the means for economic diversification and that the state mining corporation limited (SMCL) would not only want to mine strategic minerals but also others.

CEO of SMCL, Kezang Jamtsho said it has been difficult for SMCL to make realistic investment to the extent that it made the future of SMCL uncertain. He said he is hopeful that the recently approved mineral development policy would bring about some clarity.

While SMCL’s core mandate at the time of its creation was to explore strategic minerals, the definition of strategic minerals was smudge without a policy.

The new policy although defines strategic minerals as those that are scarce and essential for domestic industries, rare and have high value with security implication, it is at the discretion of the government to review and update the list periodically. “The lease of strategic minerals shall be the prerogative of the government and the lease of mineral reserve explored by DGM shall be allocated based on an allocation framework,” stated the press release issued with the approval of the policy.

This means that SMCL will have to wait for the allocation framework to get more works.

Dasho Karma Yezer Raydi also said that SMCL was denied license to mine dolomite. “If private sector is allowed, why not SMCL?” he said.

Kezang Jamtsho also said that it might not be healthy if things are left at the discretion of the government.

However, since the debate on nationalising the mines evolved, the government’s stand was that it is also a Constitutional mandate that government should not promote monopolies unless security issues are concerned.

The government has also stated that SMC would be granted exclusivity for those strategic minerals that are precious and rare such as gold, silver, copper, tungsten and graphite among others, or those with security implications like uranium and plutonium.

Meanwhile, the SMCL suffered a loss of Nu 3.9M last year due to offset of expenses from revenue generated. The corporation is currently supplying coal to Dungsam Cement from Habrang. It is also taking up stone quarry to produce aggregate and crushed sand for supply to Kholongchhu project.

Although the company got approval for Kamji stone quarry and has plans to export boulders to Bangladesh, the local community turned down the proposal because the proposed site was declared as a ‘Nye’ (holy site).

In addition to lengthy and numerous procedures in getting clearances, local community has developed a strong resistance to mining proposals, the SMCL’s annual report stated.

The company is also mired with seasonal, irregular and inefficient laborers. For instance, output per man per shift for a Bhutanese laborer is 1MT of coal, whereas, it is 2MT for Indian laborers.

While 30 to 40 percent of the total cost in mining business involves transportation cost, low carrying capacity of existing bridges and road conditions, increases transportation cost, to the extent of making overall business unviable..

Tshering Dorji

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