The Bhutanese Leading the way.
The Department of Geology and Mines (DGM) will be auctioning 11 boulder collection sites by June 2025 followed by about 26 remaining sites after July 2025 in a staggered manner.
Earlier, the Department of Forest and Park Services (DoFPS) had put up 53 sites for auction and of this, 47 sites could be allotted with 6 sites not taking off. DoFPS earned Nu 252.6 million (mn) at the time.
The 47 sites were all also not auctioned in the first round as some sites had no takers, and DoFPS calculated a reserve price for them and gave it those were willing to take it.
With boulder collection sites coming under DGM, the auction and site allocation is to be done by DGM in a more scientific manner.
DGM will reduce the 53 sites down to 37 as the DGM did an assessment and found that some sites are not feasible or too small, and so only 37 feasible sites have been selected for the auction.
Some of earlier sites have also been increased in size to make them feasible.
When DoFPS auctioned the sites earlier in the first round, there was a fierce bidding seen, and as a result while DoFPS collected a good amount, the majority of the boulder site bidders today are finding it difficult to even pay the bid amount.
To avoid this, DGM plans to not do an open bidding, but instead do a closed envelope bid where each bidder will put in a price that he or she thinks is best for the site, and the highest bid will get the site.
DGM has an estimate of the what it expects to earn from the auctions, but the department is not sharing the figure as it does not want the bids to be impacted.
While 11 sites will be auctioned by June, the remaining 26 sites will be done in a staggered manner in the months of August, September and November. The dates have to be staggered as the lease periods are coming to and end on different dates.
The main market for boulders from Bhutan is Bangladesh, and the boulder boom in Bhutan coincided with an economic boom in Bangladesh.
Boulder exports entered Bhutan’s top 10 exports in 2017 at number 8 with Nu 690 mn worth exported. In 2018 it jumped to second place with Nu 2.121 bn worth of exports, and in 2019 doubled to Nu 4.979 bn at second place.
In 2020 there was a decline to Nu 1.876 bn but still at second place. In 2022 it improved to Nu 2.483 bn and in 2023 it dropped to fourth place at Nu 2.358 bn. In 2024 as of the third quarter, the export is Nu 782 mn and the position is still second place.
Boulder export, therefore, is an important export and foreign currency earner. However, the profitability has been reduced due to the Suvidha App by the West Bengal government that charges Nu 5,000 per truck and more, and that is actually not allowed under the Free Trade Agreement between Bhutan and India.
The boulder market has also been hit with an economic slowdown in Bangladesh made worse by a recent political crisis.
The market has also been spoilt by cut throat competition between Bhutanese players too.
