Govt says that SMC is one cure to the ills in the RAA mining audit report

In response to questions on the government’s reaction to the recent Royal Audit Authority (RAA) Performance Audit report on Bhutan’s mining sector, the MoEA minister Lyonpo Norbu Wangchuk said that the report on the surface was a good professional job done by the RAA and he had conveyed his compliments to them.

The minister said that the cases of mining companies creating subsidiary companies to transfer profits mentioned in the report were not illegal, but it also showed that there was a need for anti-trust laws. He said they would study and submit the issue to the government.

Lyonpo said that mining sector in Bhutan was dormant given the potential mining had in Bhutan. He said it was one of the gems of the country and a jewel waiting to shine. He compared the potential of mining to that of hydropower saying that Bhutan had rich and good deposits like coal, gypsum, dolomite granite and talc.

However, the contribution of mining to GDP has been very minuscule. He said the benefits of mining can be acquired through proper policy and allocation procedures.

Lyonpo pointed out that the truth of the mining sector with mines like Gidaphu and Khariphu being taken to court by the community is that there is increasing number of public citizens with grievances against the mining sector.

He said there were environmental issues, benefits were not percolating down and there is a lack of expertise in both quality and quantity.

The Minister said that this was the reason why the cabinet had approved the formation of the State Mining Corporation (SMC) for which the Ministry of Finance was in talks with the Druk Holdings and Investment (DHI) to put it under their umbrella and manage it.

He clarified that the SMC would not compete with the private sector but would rather provide leadership in the mining sector through scientific methods of mining.

The Prime Minister Lyonchhen Tshering Tobgay said that mineral resources belonged to the people of Bhutan and they have to reap the benefits of mines. He said that there were mines across the length and breadth of the country and many were being run with limited amount of technology and moreover there were 700 new applicants.

He said that there was a feeling that all the people of Bhutan were not benefitting from mining, He said that SMC would mine in such a way causing minimal environmental destruction and also spread the benefits of mining to the people.

Lyonchhen reveled that the government was discussion with agencies in India and the Railways to purchase the minerals and also with Bangladesh to supply minerals to them.

The PM stressed that the proceeds from the SMC would go to funding the school reform program. The PM also said that the MoEA had amended the Companies Act to only expedite the business climate but also make things transparent.

 

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