Nationalising mines not in national interest – MoEA minister

The govt. was not in favour of turning back the clock for the sector

Council: It is not the government’s business to do business and it’s best left to private sectors.  The government’s role shall be limited to facilitating and regulating businesses.

This was the message from the economic affairs minister, Norbu Wangchuk during question hour at the National Council on June 11, when he was quizzed on why the state mining corporation was not taking up all primary mining activities.

The council, in its earlier session, had recommended the government to nationalise all mining and quarrying activities, as it was seen to be benefiting only a few individuals.

Lyonpo Norbu Wangchuk said nationalising the mines would be illegal and the benefit to the economy and people was found to be far less than when it’s not nationalised.

Although the Constitution offers the property rights of all mineral resource to the state, he explained that the Constitution also mandates the state to promote open and progressive economy, and foster private sector development through fair market competition and prevent monopolies.

The Constitution also does not allow Parliament to enact laws that allow monopoly, except to safeguard national security.

Lyonpo also said that clauses in the public finance Act did not allow the government to operate state businesses where private sectors were already involved.

Nationalising the mines, he said, would affect the entrepreneurial drive for the private sector. “It’s not in line with principles of a liberal democracy.”

He said the government until 1980 operated the gypsum mine in Pemagatshel, which, unable to make any profit, was auctioned.

“Now after the private operator took over, it generated huge revenue for the government from royalties and taxes,” he said.

In countries where mining is nationalised, lyonpo said it has failed because of corruption and resource wastage.

Eminent member Dasho Tashi Wangyel however argued with the same laws.  The Constitution, he said, also mandated the state to develop and execute policies to minimise income inequalities and promote equitable distribution of public facilities.

He said the public finance Act also allowed state to operate businesses where private sector was already involved, under certain circumstances.

“It’s obvious how people benefited from nationalisation of sand and stone in 2007,” he said.

Earlier the council recommended to cancel licenses of all mines and quarry that were not registered with the revenue and customs department and that did not keep proper book of accounts.

Samtse council member, Sangay Khandu, said the mines and mineral Act authorised the ministry to cancel the license if any laws were violated.  He said that the special audit report on mining indicated that some operators were not paying taxes.

The minister responded that there were only two miners that did not register with revenue and customs, and the law did not clearly demand registration.  However, he said, since the implementer of Income tax Act was the revenue and customs, the ministry has no role in it. “But these two companies have been paying the royalty and mineral rent regularly,” he said.

Jigme mining, Druk Satair and SD Eastern coal, he mentioned, were potential miners with huge investment, expertise and contributed more than 50 percent of their revenue to the government coffer annually.

Many issues, he said, would be addressed from the amendment of the companies Act, new mineral development policy and increased royalty fee, which were not revised since 2006.

By Tshering Dorji

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