Thukten Zangpo
The Department of Geology and Mines (DGM) is currently drafting the new Mines and Minerals Bill, which it plans to submit to the government in this fiscal year 2024-25.
DGM Director Phuntsho Namgyal highlighted the need to update the Act in line with the current social, economic, and environmental contexts. “Bhutan is seeking to attract larger investments and diversify its mineral sector,” he said.
The Mines and Minerals Act was passed in 1995.
The new Bill will address discrepancies between the existing regulations and the Mines and Minerals Management Regulations of 2022, particularly concerning eligibility, ownership criteria, and tenure that mismatches the 1995 Act.
DGM’s priority is to re-submit the Bill to the Parliament within the 13th Plan.
“We are currently drafting the Bill and stakeholders meeting will be conducted soon. Moreover, the department will also conduct a legal impact assessment to see the impact from the change in the law, if any,” Phuntsho Namgyal said.
The Mines and Minerals Bill 2020 was introduced in Parliament in 2020 but faced delays due to disagreements over key amendments, such as the allocation of mining rights.
The National Council favored state-owned enterprises (SOEs) managing all mining operations while the National Assembly and the government preferred allocating strategic mines to SOEs and allowing private sector involvement for non-strategic mines.
The current Mines Act empowers the ministry to lease mineral deposits to both private individuals and state-owned corporations.
As part of the revision process, the DGM has engaged with the Inter-governmental Forum on Mining, Minerals, Metals, and Sustainable Development (IGF) to develop a Mineral Policy Framework (MPF). The MPF assessment report is expected within the next two months.
With 85 member countries, IGF focuses on promoting sustainable and responsible mining development through sustainable mining practices.
The Environment Advisor of the IGF, Carlos Ortega, said the assessment will provide valuable insights and international best practices to aid Bhutan in amending its Mines and Minerals Act.
Carlos Ortega said that the assessment prioritises two recommendations among three for Bhutan namely in laws, policies, and institutions that focus on the legal aspects of regulatory framework for mining and mine closure transition, to develop best mine restoration plans and restoration funds.
The third recommendation focuses on socio-economic benefits, which delves into improving the benefit sharing from mining in the country.
The MPF focuses on six key areas: laws, policies, and institutions; financial benefits (taxes and royalties, and fiscal incentives); socio-economic benefits (benefits sharing with societies); environmental management (water, air, biodiversity, waste management); post-mining transition (mine closure and post mining land use); and artisanal and small-scale mining.
“This assessment serves to identify strengths and gaps for each member country,” Carlos Ortega said.
Carlos Ortega highlighted Bhutan’s existing strengths in environmental management, including robust mine closure regulations and guidelines for environmental restoration bonds.
The 13th Plan aims to boost the mining sector’s contribution to GDP from Nu 4.63 billion in 2023 to Nu 9.09 billion by 2029, with an annual growth rate of 11.9 percent.
However, only about 40 percent of the country has been geologically mapped and prospected at the 1:50,000 scale.
To enhance contribution in the mining sector, the government plans to conduct a comprehensive geological and mineral resource mapping through nationwide magnetic, gravity, geochemical and metallic surveys, develop graphite deposits, enhance, export and value addition of minerals, including capacity development to professionally manage the mining industry.