… with approval of new mines and minerals regulations 

MB Subba 

The government has lifted the moratorium on the operation of mines by private companies, economic affairs minister Loknath Sharma told Kuensel yesterday.

Participation of the private sector in operation of mines and minerals was suspended in June 2020, following which the State Mining Corporation Limited (SMCL) took over all existing mines that were operated by private companies.

However, the minister clarified that the predetermined mines – dolomite, gypsum and coal – will be operated by the state-owned company, SMCL.

Lyonpo said private companies can apply for operation of any minerals (other than the three that have been taken over by the SMCL) so long as the value addition criteria is fulfilled.

This means that registered private companies can now apply for operation of captive mines. Such mines include talc, limestone, marble and quartzite.

Lyonpo Loknath Sharma said that the moratorium on new applications for operation of mines was lifted with the revision of the Mines and Minerals Management Regulations 2002 last month.

However, the government states that value-addition to minerals will be one of the main criteria for approving mining applications, which means that the companies cannot sell or export minerals in its raw form.

He said that the list of minerals that is open for the private sector will be published and updated on the economic affairs ministry’s website.   “The regulation is revised and approved, and the moratorium stands lifted,” he said.

Sources said that many members of the public want to buy shares of mining companies. The economic affairs minister said that the private mining companies could float shares for public subscription.

A list of minerals that will be auctioned will be updated as and when new minerals are identified or annually, according to the minister.

Prime Minister Dr Lotay Tshering in his State of the Nation report 2021 said that a Mines Administration System has been developed to facilitate seamless processing of mining applications, generate transport permits, and payment of royalty through an online platform.

The revised regulation was vetted by the Office of Attorney General (OAG) to ensure that the revisions are in conformity with the Mines and Minerals Management Act 1995.

The government has come up with the new regulations after Parliament failed to pass the Mines and Minerals Bill 2020. It was deferred in the joint sitting in the summer session of 2021.

The main disagreement between the two houses of Parliament was on whether or not to allow private participation in the operation of mines.

The Bill encountered an imprecise interpretation on private versus state ownership, where the government, or the National Assembly in this case, was projected to be in favour of the former.

The National Assembly wanted strategic mines to be operated by the state and non-strategic mines auctioned to the private sector. The National Council wanted mines to be operated by the state.

However, the state of the nation report states that the government considers all mines and minerals in the country strategic and will always be driven by the interest of the nation.

“Which is why, just as we made the attempt to present the Bill to the Parliament for the first time since its formulation in 1995, it will be our moral responsibility to bring it back in a way that the best serves the people of Bhutan at all times,” the state of the nation report states.

According to officials from the private sector, private mines can function more effectively than state-owned companies and contribute in terms of taxes and employment generation.

“Opening up of mines to the private sector can help the economy that has been affected by the pandemic,” a private sector official said.