The Committee called for comprehensive mineral exploration, improved environmental safeguards, and new resettlement strategies for affected communities 

Thukten Zangpo

The Public Accounts Committee (PAC) recommended the government to undertake comprehensive geological mapping and prospecting of the country’s mineral resources to fully leverage the sector’s potential in the joint sitting of Parliament yesterday.

This was one of nine recommendations presented in the PAC’s review of the Performance Audit on the operations of the State Mining Corporation Limited (SMCL).

The Royal Audit Authority assessed the operational efficiency of SMCL between 2015 and 2022.

The Chairperson of the PAC and eminent member of the National Council, Phuntsho Rapten, said that although the mines and mineral sector is considered as one of the main contributors to the national objective of ‘Developed Bhutan’ by 2034, only 33 percent of the country has been geologically mapped.

The PAC recommended the government to expedite nationwide mineral resources mapping, exploration, and geo-scientific studies for all potential minerals in the country. “Bhutan can tap the potential of more minerals like iron ore, graphite, among others,” he said.

In response, the Minister of Energy and Natural Resources (MoENR), Gem Tshering, said that the government has completed 59 percent of the mapping, and the remaining 41 percent will be completed by the end of the 13th Plan, which will involve advanced airborne gravity and magnetic surveys.

Members of Parliament (MP) also raised concerns about the environmental and social impacts of mining, particularly in local communities.

Pemagatshel MP Jamyang Namgyal said that gypsum mines in Khothakpa have affected 28 households with dust, noise pollution, crop damage, and even structural damage to homes.

He added that affected households were resettled in a phased manner, which has impacted the local communities, and urged the government to resettle the affected families in a single, cohesive effort.

Lyonpo Gem Tshering assured that the government would soon study the impact on affected households.

The PAC also recommended that the MoENR and SMCL, in collaboration with local authorities, conduct comprehensive testing for air, water, and dust pollution, as well as assess structural damage caused by mining activities.

The Committee found out that gypsum is most efficient among minerals extracted in the country. However, Khothakpa mining shares a boundary with 28 households of Shumar gewog, with more than 50 households located within the radius of 500 metres of the mining site.

The Committee raised concerns about the use of explosives, dust pollution, and the safety of schoolchildren from the increasing movement of heavy trucks.

In other mines, the committee found that the condition of gewog road connectivity from Doksum to Yalang and Ramjar gewogs in Trashiyangtse had deteriorated due to movement of heavy vehicles from Dzongthung to stockyard near Doksum (25 kms).

Residents in Pugli, Samtse, expressed concerns over the drying up of a water source, which is located about two kilometres from the Chunaikhola mining site.

To address these issues, the PAC recommended a comprehensive land acquisition and resettlement strategy for affected communities, along with a long-term mining extension plan.

The MPs also discussed the declining production of coal and its impact on domestic cement production, with coal mines failing to meet the needs of local cement plants. Between 2016 and 2023, SMCL produced 695,154 metric tonnes (MT) of coal, falling short of the target of 781,500 MT. The total domestic coal consumption capacity is about 260,000 MT per year.

Habrang coal mine in Samdrupjhongkhar production decreased significantly from 2019 and will be closed by the end of this year. Similarly, Majuwa coal mine in Samdrupjhongkhar ceased operation from April this year due to lack of deposits.

PAC’s chairperson Phuntsho Rapten said that the final mine feasibility study of the other minerals like gypsum and dolomite shows proven deposits of 90 to 95 percent, however, coal mines are infra deposits that are not certain about reserves.

To improve the logistics of the mining industry, the PAC recommended accelerating the construction of the Dewathang-Nganglam road to reduce transportation costs and make domestic cement more competitive.

The Committee also suggested considering a railway link to Pugli in Samtse to reduce transportation costs for dolomite exports, which currently rely heavily on truck and rail transport.

The PAC recommended the Department of Geology and Mines to focus on technical feasibility over financial sustainability, while SMCL should explore additional markets and diversify its mineral products.

The committee also recommended the government to enhance the efficiency of online regulatory portals such as Bhutan Electronic Customs Management System, Bhutan TradeFin Net, and Bhutan Integrated Revenue Management System (BIRMS) to facilitate seamless cross-border trade.

In the fiscal years 2020-23, SMCL contributed Nu 11.1 billion to government revenue through taxes, license fees, royalties, and dividends. Dolomite made the largest contribution at 70.2 percent, followed by gypsum at 20 percent and coal at 10.3 percent.

The joint sitting will deliberate the remaining eight recommendations today.