Rinzin Wangchuk

The National Council (NC) applauded the government for taking a bold decision in handing over the Chunaikhola dolomite mining to the State Mining Corporation Ltd (SMCL) in the interest of the people of Bhutan.

Deliberating the finance ministry’s proposed national budget, 2020-21 for mining and manufacturing industries yesterday, NC member of Haa, Ugyen Namgay, said that the government’s decision to cancel mining auction and grant it to SMCL was very much in line with priorities set by the government for the present and future.

Such act by the government, according to Ugyen Namgay, is in conformity with what His Majesty had said. “His Majesty had said that the country’s natural resources are the wealth of the people. The decision upholds Article 1 Section 12 of the Constitution, which states that the rights over mineral resources, rivers, lakes and forests shall vest in the State and are the properties of the State, which shall be regulated by the law,” he said.

He said that the government recognises and values the resolutions and recommendations on issues related to mines and minerals submitted by the National Council that has been deliberated exhaustively since 2008. “The sound decision was also in line with government’s overarching goal of narrowing the gap between rich and poor.”

MP Ugyen Namgay said that it was a significant decision which comes at a time when the country is facing a crisis in terms of health and economic burden from the Covid-19 pandemic.   

He said that the government is prioritising activities and consolidating national and natural resources to support the national response by generating revenue from mining activities and allowing SMCL to operate.

SMCL is doing well. SMCL has earned Nu 1.43 billion from mining gypsum in 2019 and made a net profit of Nu 336.35 million.

MP Ugyen Namgay said the House should appreciate and applaud the Prime Minister for taking an unprecedented decision by choosing 700,000 people over one or two individuals or companies.  “We know it is a difficult task to take such a decision, but government has deferred the auction of Chunaikhola dolomite mining in the interest of the country and people,” he said.

Member of NC from Pemagatshel and Chukha also supported the submission made by Haa MP. Pemagatshel MP Choining Dorji said that mining activities had not only generated revenue for the government, but also have enormous benefit to the local community.

“By looking at the revenue earned by SMCL from gypsum, there is a high profit from mining activities,” he said. “Keeping all this in mind, the House will look into the issues when it deliberates the Mines and Minerals Management (Amendment) Bill 2019.”

Chukha MP Sangay Dorji said that such a decision should have been taken before the Covid-19 pandemic.  Some members also submitted that the mining rights should be given to the SMCL and government should not renew or issue new mining license until the Council passes the Mines and Minerals Management Bill. The National Assembly has passed the Bill to enhance transparency, curb corruption, and prevent tax evasion and other business malpractices in the mining sector.

The government cancelled auctioning the dolomite mining rights in view of the Covid-19 exigency on June 2. Prime Minister Dr Lotay Tshering had said that given the unavoidable health and economic dynamics, the likelihood of auctioning the mine as a profitable venture for both the private sector and the government appears slim, and this has compelled to reconsider the timeline.

The auction was supposed to happen on June 3 in Thimphu. There were 10 prospective bidders including SMCL and Jigme Mining Corporation Limited (JMCL), which mined the deposit of Chunaikhola dolomite for 15 years with a total bid value of Nu 390M.

The gypsum, coal and dolomite mines are the major mining in Bhutan. As of today, there are 67 active mines and quarries currently under operation in the country.