MoEA is trying to revise the Mines and Minerals Management Regulations

MB Subba 

The government is looking into addressing the uncertainty for the mining sector after the summer session of Parliament deferred the Mines and Minerals Bill (MMB) 2020 indefinitely.

The State Mining Corporation Limited (SMCL) has taken over all gypsum, dolomite and coal mines operated by private companies as the government did not renew their lease agreements. But the arrangement was temporary for a certain period.

Mines and minerals would have been allocated as per the new Act had Parliament passed the MMB. Now that the Bill is not likely to be passed any time soon, there is uncertainty on whether the government will take back the mines from SMCL and auction them to the public as prescribed by the Minerals Management Regulations 2002 and the Mines and Minerals Management Act (MMMA) 1995.

An official familiar with the issue said that the government had handed over the mines to SMCL only for a limited time period and that they should be auctioned after the expiry of that duration if a new law is not passed. “If the government does not auction the mines, it would be violating the mines Act,” he said.

Questions also remain on the legality of the government’s decision to allow mines to the state-owned company without following the due process prescribed in the mines and minerals management regulations, which state that in case the government decides to lease a pre-identified mineral deposit for commercial exploitation, it shall be done through public notification and sealed or open tendering process.

Economic Affairs Minister Loknath Sharma said that, in the case of dolomite, the mines were handed over to SMCL until June 2022. The Act, he said, did not say how mines are to be allotted but provided authority to the ministry (under Article 10 of the MMMA, which states that the head of the ministry shall be the sole authority to lease mineral deposits.)

Lyonpo Loknath Sharma said that the ministry was trying to revise the Mines and Minerals Management Regulations and also see what provisions of the mines and minerals Bill could be incorporated in the new regulations. However, some observers say that the government cannot directly allot mines to SMCL or bar private participation in the mining sector even by amending the regulations unless the Act is amended in line with the National Council’s view.

Any individual or organisation is eligible to apply for a mining lease under Article 17 of the MMMA, which will remain in force until it is repealed by a new law.

Lyonpo said that the ministry recently had a discussion on allotment of mines, community participation and ownership framework, prospecting and exploration among other issues.

“We will form a position covering the issues and submit a way forward to the Cabinet for directives. We are not in a hurry as current works are not disturbed, but surely we will find a way forward,” Lyonpo Loknath Sharma said.

The ministry, he said, did not have a moratorium (on mines) that in the case of new re-lease of quarries or stand-alone mines, the government would continue issuing them as per the demand.

The Cabinet will discuss the issue after the economic affairs ministry submits its report and recommendation, he said. “The matter is still with the ministry and I will submit recommendations to Cabinet once we are thorough with it.”

Some MPs say that there is no certainty on passing the mines Bill as it has to be revived by either House of Parliament as a new Bill.

The legislative rules of procedure (LRoP) states that a dead Bill can be revived after a year but it is silent on when a Bill that has been deferred can be tabled again.

Should MMB be revived as a normal Bill in the upcoming winter session, it would take up to two years from now for it to be passed. This means that there is less chance of the Bill being passed in the present government’s time unless it is re-introduced as an urgent Bill.

The National Council wants operation of all mines by state-owned enterprises (SOEs), but the government and the National Assembly are in favour of allocating strategic mines to state-owned enterprises (SOEs) and leaving non-strategic ones open to the private sector.

With the indefinite deferment of the Bill, officials say that the current issues surrounding surface dredging and riverbed dredging will continue to affect the clear implementation of clauses by the agencies involved.

In the status quo, the Mines and Minerals Management Act of the Kingdom of Bhutan (MMMA) and the Forest and Nature Conservation Act of Bhutan (FNCA) both enacted in 1995 have conflicting clauses, giving dual authority and responsibility to the forests department and the Department of Geology and Mines (DGM).

Edited by Tshering Palden