Moratorium on mining lifted

Business Environment

The Department of Geology and Mines (DGM) under the Ministry of Economy Affairs (MoEA) has lifted the moratorium on mining that was announced on 17th February 2014.

The ministry lifted the moratorium and issued notification of the new development on September 6 this year.

According to the ministry, there are changes in the application process and the details of the changes can be found in “The Guideline for Leasing Mines”, which is available in the download section of the ministry’s website.

Chief Engineer of DGM Pema Tshering said the rationale for lifting the moratorium was to enable interested applicants to apply and process the requirements by which time the Mines and Minerals Bill will be passed by the parliament. This lifting of the moratorium applies to application process considering the longer time required to get the required clearances.

The moratorium notification dated on 17th February 2014 was issued to prepare for launching of the new Mineral Development Policy (MDP). The MDP was launched in May 2017 and is under implementation. Also the moratorium imposed as above was ‘not to accept new application’, but to prepare for launching of new mineral development policy. After adopting the new policy, the moratorium does not stand valid.

The Mines and Minerals Bill 2019 was submitted to the parliament during the 2nd session of the 3rd parliament.

The Chief engineer said processing for the lease of mines and quarries general takes about one to two years as it is subjected to many requirements and sectoral clearances.

He said the department and the ministry are also working simultaneously with the regulations so that as soon as the Bill is passed, the regulations are ready and that the implementation would be smooth. Opening up application process will also avoid rush for mining applications after the Bill is enacted and can actually be understood as a preparation for smooth transition to the implementation of the new law.

Further, the DGM has developed the “guideline for leasing mines”, all the requirements to be fulfilled for eligibility for mining and the procedure for allocation of mines have been established in line with the existing policy, the Mines and Minerals Management Act (MMMA) 1995 and the Mines and Minerals Management Regulations (MMMR) 2002.

As per the guidelines, the department shall not receive any application if the requirements are not fulfilled. The department/ministry shall not accept applications for mining of minerals considered strategic (defined in the MDP 2017) till the MM Bill is enacted and the MMMR is revised.

According to Pema Tshering, prior to 2014 the department had to visit the site on the feasibility of the mining, which was a burden to the department and 80% to 85% of the applications got rejected. For now, the applicants themselves should study the feasibility of the mining at the site with technical people before they apply for application.

He said the department will also follow stringently scrutiny of the applications in terms of technical and financial eligibility. 

“It is also apparent that this lifting of the moratorium does not influence or impact on the existing national mines, would be operationalized mines or open new lines of mines,” said the Chief Engineer. The go ahead for clearances on the first application shall be based on existing laws and the policies. This notification may be treated as a normal work in progress and not a new development in the mining sector.

However, the National Council has written a letter to the Prime Minister on 12th September expressing concern on lifting the moratorium on mining.

The letter states that during its 22nd session held Question Time Session with the economic affairs minister on 16th January 2019, it had asked about the plans of the government on issuance of new licenses and renewal of licenses related to mining until such time the mines and mineral management act 1995 is amended by the parliament.

The letter states that the minister had responded that the issuance of licenses and renewal of licenses will be suspended until the act is passed by the parliament. Further, the minister mentioned that unless the amendment bill is passed, the moratorium imposed on 2014 would not be lifted. 

The letter states that the council calls on the government to continue implementing the moratorium of new applications for lease of mines and quarries until the mines and mineral management act 1995 (amendment bill) is passed by the parliament following due legislative procedure. 

During the press meet yesterday, Prime Minister Dr Lotay Tshering clarified that the moratorium is not on accepting the applications but on issuing licenses.

“One application will take more than a year for processing. Once the act is passed we will allow the business – that is issuing of the licenses. Accepting applications only after the act is passed then it will take four years to start the mining business,“ Lyonchhen said.

 “If the worry of the NC is accepting the applications then the council is absolutely correct. If NC’s concern is issuing of licenses not in keeping with the laws, I fully agree with the concern. We are also equally concerned,” Lyonchhen added.

Lyonchhen said that he will be answering to the National Council soon with the clarification that the government will not be going ahead with the issuing of licenses and that they are only accepting the applications.

Dechen Dolkar from Thimphu

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