Govt. open mining to the private sector through MMMR 2022

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Mining and quarrying activities fell by -81.84% in 2020

Thukten Zangpo

After Parliament failed to pass the Mines and Minerals Bill 2020, the Ministry of Economic Affairs (MoEA) passed the Mines and Minerals Management Regulations 2022 (MMMR 2022) to open mining to the private sector.

According to the regulations, a Bhutanese citizen as an individual or owner of a licensed business, household, business and public agency can lease mineral deposits and quarries from January 14 of This year.

The Mines and Minerals Management Act 1995, in Section 21, empowers the MoEA to lease mineral deposits to individuals and state-owned companies.

Private participation in mining operations was suspended in June 2020, following which the State Mining Corporation Limited took over all gypsum, dolomite and coal mines operated by private companies.

Growth in the mining and quarrying sector contracted by -81.84% in 2020. Its share fell from 4.80% in 2019 to 1.20% of GDP in 2020, a drop of 3.61 points percentage.

The new regulations are expected to revive economic growth which fell to 10.08% in 2020.

In a previous interview, Economic Affairs Minister Loknath Sharma said that the mining and minerals sector, which has been identified as one of the five jewels of the economy, will play an important role in the recovery of the economy. economy.

He added that activities contributing to added value will be given preference.

Under the new regulations, the ministry will directly allocate proven mineral reserves to public mining agencies based on their broader economic benefits, high potential for export in primary form, potential for substantial revenue generation, reliable supply and affordable in minerals and minerals. products in the country or the sustainable development of mineral resources.

However, the direct allocation of proven mineral reserve or lease of mines to individuals or companies must be based on the supply of raw materials for the establishment of a national processing industry or the supply of critical additives to national industries.

Additionally, individuals or companies are not eligible to obtain mining leases if they are already leased to state-owned mining agencies.

The regulations also state that the term of the initial lease or renewal must not exceed the expected economic life of a mine or a maximum period of 15 years, whichever is shorter.

He also said that private companies are eligible to obtain or operate no more than two mining or quarry leases at any one time. However, the limitation of two mining or quarry leases does not apply to state-owned mining companies.

It also stated that if the lessee does not commence mining operations within two years from the date of granting the lease or interrupts mining operations for a period exceeding two years, the lease lapses. . “However, the department may revive and modify the lease if the tenant has written a request stating that the termination was due to reasons beyond the tenant’s control.”

The MMMR 2022 also stipulated that the lessee was to pay royalties and mining rent to the government at the rates prescribed by the government. “In addition, the lessee must post an environmental restoration bond with the government as security for mine reclamation and environmental restoration in the mine, to ensure that the threat of adverse impacts on the surrounding environment is minimized.”

At the same time, the Department of Geology of Mines plans to set up a national database on mineral resources.

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