The cabinet has approved the draft Mineral Development Policy (MDP) 2017 that has undergone a number of redrafting over a number of years.
The Rationale for the Policy, highlighting the importance of policy to guide mining and related activities in the Country. It also includes the Vision, Mission and Objectives of the Policy to spell out the overarching goals of the policy.
There is an institutional arrangement where the roles and responsibilities of different agencies concerning mining and related activities are clearly elucidated. It also establishes the policy intent to separate the promotional and regulatory functions of the DGM in the Ministry and the establishment of an independent and autonomous Mining Regulatory Authority to address the current issues.
Leasing and classification
For the purpose of leasing, minerals are classified as Strategic, Industrial and Construction material. Granting of mineral rights has been made more conducive and the tenure of mining lease has been increased to the expected economic life of the mine or maximum of thirty years to attract investment, encourage value addition and to build investor confidence. The rights of the mineral leaseholders as well as their obligations are strengthened to ensure responsible and scientific mining.
Rights for prospecting, exploration and mining activities shall be entertained only to financially and technically competent applicants. The lease of strategic minerals shall be the prerogative of the government and the lease of mineral reserve explored by DGM shall be allocated based on an allocation framework developed by the Ministry.
In principle, lease of mines shall be as captive to manufacturing industries for value addition. Export of minerals in raw form will be discouraged. Value addition on minerals shall also be promoted through reduced royalty as incentive, while export in raw from shall be levied higher royalty rates. Export of raw materials by captive mines shall not be allowed to curtail rent seeking behavior among manufacturing industries.
Other policy priorities such as; mineral conservation, professional capacity building and occupational health and safety issues are also addressed.
The policy has standards on environmental protection and regulatory regime. The mining environmental standards are required to be strengthened through adequate environmental assessment and properly designed Mine Plan and Environmental Management and Mitigation Plan prior to issuance of lease.
Proliferation of mines is to be controlled through assessment of the environmental bearing capacity of the area. The different stages of mineral development starting from exploration, mining and production to mine closure and reclamation shall be based on sound, scientific and engineering principles.
To improve mining standards and to promote professionalism, mines shall be required to be supervised by qualified professionals. Post mining reclamation shall be ensured by collecting sufficient Environmental Reclamation Fund to implement the Mine Closure and Reclamation Plan at the end of the mining lifecycle.
Social Risk Management
Under this provision, the leaseholders will be required to adopt measures to manage and mitigate adverse impacts of mining on the affected communities and minimize social risks emanating from mining activities. The heading also entails the need to ensure that adequate grievance mechanism and procedures are in place for the affected local communities. To strengthen the management and mitigation of social risks, an acceptable Social Impact Assessment and mitigation plans are required. A risk based approach shall be taken to approve all mining proposals.
Socio-economic Benefits Sharing
The Policy recognizes the need to share benefits from mining sector amongst the promoter, the nation and the affected local communities. This is in keeping with the provision of the constitution, the principle of broad based ownership, international good practices and our GNH values. The national level benefits would be in terms of raw materials for new businesses, employment opportunities and increased revenue to the government. This will be strengthened by putting in place a progressive mineral fiscal regime that provides a fair share of profits to the nation.
The local level benefits would be in the form of employment generation, business opportunities, infrastructure and local community development. To realize benefits to affected communities, the policy outlines the need to formalize the projected benefits through execution of Community Development Agreements. Further, a Community Development Fund shall be created to fund the activities agreed and outlined in the agreement by the Authority.
The policy is aimed at triggering positive reforms for the sector such as separation of policy and regulatory functions by forming MRA, and adoption of appropriate legal framework and guidelines. The Policy aims to benefit the nation through optimal mineral utilization, industry development, socio economic development and revenue generation. With clear systems in place, the policy says the sector can anticipate positive revenue growth while the institutional reforms will have positive impact on good governance and rule of law. The policy will ultimately give direction to the amendment and overhauling of the Mines and Minerals Management Act 1995.