When huge rocks rumble down with a blast at mining sites along the southern border, environmentalists say it’s the death knell of Bhutan’s image as a conservation poster boy.
The 83 mines in Bhutan occupy 943 hectares of land, which is only about 0.3% of the total land area and 0.5% of the total forest area in the country. But miners accuse that a misperception about mining by government agencies has led to policies that has been quelling the industry that employs around 5,000 people.
With two big mines, the SD Eastern Bhutan Coal Company and the Bjemina Mines, in the witness box with their share of problems, public notion is that the mines do more harm than good.
In many countries, including neighboring India, mines have been accused of destroying the environment and displacing tens of thousands of people, mostly poor farmers. Strong environmental activist groups have always pitched themselves against mining giants.
It is in this backdrop that the mining sector in Bhutan has been placed. And an extremely cautious government has been talking about mining that doesn’t cause much damage to the environment. This is where the issue of scientific mining comes.
But miners point out that the government pushing the majority of small mines to adopt scientific mining practices is unrealistic.
Palden Dorji, the vice president of the Bhutan Chamber of Commerce and Industry, explained that small mines cannot afford and cannot have scientific mining equipments because of the small scale of operation. If small mines do procure the equipments, then it automatically becomes a large mine by local standards.
And the government policy is to discourage big mines. “This is the mismatch,” says Palden Dorji.
The economic affairs minister, Lyonpo Khandu Wangchuk, agreed that there are “problems” in the mining sector that needed to be sorted out. “We need to undertake a careful review,” he said “because, on one hand, there are complaints from environmentalists and the public and on the other, there is a big need and demand for sand, stone, and basic construction materials which only comes from mining.”
The mining sector contributes less than a percent to the gross domestic product (GDP) and it amounted to Nu 180.36 million last year.
The officiating head of the Department of Geology and Mines (DGM), Sangay Tshering, said mines are allowed only after a detailed feasibility study. Then a mutually agreed lease agreement is signed.
About 40% of the minerals extracted are exported to neighboring countries bringing convertible currency boosting the economy.
The mismatch fuss
“Scientific mining is very expensive for small mines,” said Palden Dorji. Miners say the amount of mineral extracted will not sustain the mines.
But law has to be followed. “I agree scientific mining is expensive but they have to follow what is written in the law,” says Sangay Tshering.
Lyonpo Khandu Wangchuk said there is no policy prioritizing only small mines and cited examples of gypsum, coal and dolomite which are large mines. Problems arise, the minister said, when small time miners venture into the mining business without doing their home work.
“There are small time lease holders with limited capacity who find out that their mines are not sustainable only when they start doing the work,” the minister said. “As the operation is small they are not able to engage technically qualified people and then problems arise.” He said many small miners are looking for short term gains and want to make some quick money.
Problems
The regulating authority, DGM, has not able to consistently regulate the mines. The department has only five mining engineers and lacks expert manpower.
An expert pointed out that there is a need to review the taxation policy in the mining industry. He said the mines pay very less royalty compared to what they make. In 2007, the mining sector paid just Nu 72 million as royalty and mining rent.
The royalties range from Nu 2 a metric ton for construction materials from quarries for domestic use to the highest for granite and marble, Nu 160 a cubic meter.
Laws conflict
The mining industry is caught between the rules of two departments.
The mining department rules say that excavation at the mining site should follow the top-down slicing method, which is, excavating earth from the top of the mountain. But forests department rules do not allow top-down slicing.
The most recent example is the conflict over laws between the forest and mines departments brought to light by the Bjemina quarry issue.
The Mines and Minerals Management Act of 1995 has made the Department of Geology and Mines the sole authority of mines in Bhutan. But Bjemina mine belonging to the Singye group continued to be under the forest department. And in 2006 the forest department renewed the Bjemina mine lease till 2016.
“This has caused a dilemma among the miners,” says Tshering Sangay, an administrative officer with a mining company.
What next?
Lyonpo Khandu Wangchuk said it is very important to exploit natural resources in the country. “We can’t imagine a situation where we have to import even stones,” he said, “but the natural resources have to be exploited sustainably.”
He said the problems have to be bridged in an environmentally and socially friendly way. It can also be achieved only with “serious miners” and not casual businessmen vying to mint money.
A new mineral development policy is in the offing which is expected to address the concerns of the mining industry. The rules that govern the sector today include the Mines and Minerals Management Regulations 2002, Mines and Minerals Management Act 1995, Environment Assessment Act 2000 and the Forest and Nature Conservation Act 1995.
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