A middle path on mining

Public memory is short in Bhutan. The now profitable Gypsum mines of SMCL was operated very unprofitably and at a loss by the government until 1980, after which private owners took over and turned it around.

The NRDCL a few years ago invested Nu 400 mn in stone quarries all over Bhutan, but the entire venture was a huge flop from choosing the locations to marketing to an efficiency level which was not even half of privately operated quarries.

There is no doubt that the SMCL has done very well for itself with the Gypsum and Coal mines, but it must be remembered that the mines and infrastructure there were already created by the private parties for SMCL to move in and make a profit.

If nationalization is such a good idea, then all the major private tour companies should be dissolved and merged into the erstwhile government owned Bhutan Tourism Corporation Limited (BTCL).

People also forget the phone and internet rates charged by Bhutan Telecom until Tashi Cell came along and prices got drastically cut.

The whole debate around government versus private ownership of mines is missing the forest for the trees.

The issue at hand should not be about ownership and going back to nationalization where the government runs everything of any remote commercial value, but it is about making sure that be it through private hands or the government, the country and the people must benefit in the end.

What the government must immediately do in the Chunaikhola dolomite mine is to do a proper assessment of the real commercial value of the dolomite mineral and mine and then set an appropriate minimum base price above which the bidders can bid. So be it if SMCL wins that bid and can operate the mine efficiently.

The government must strengthen its regulatory and tax collection capacity and ensure that be it Chunaikhola or any other business entity they are making the right declarations and paying their fair share.

A prime focus for the government should be to encourage a good business environment backed with a good and transparent regulatory and tax regime, so that the fruits can be shared among all.

The government should have a monopoly only when it comes to truly national resources like hydro projects.

There can be economy only where there is efficiency.
Benjamin Disraeli

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