MoEA proposes export of raw minerals to boost rupee earnings

reuters
reuters

In what some are calling a flip flop by the government the Ministry of Economic Affairs has proposed to the cabinet yesterday that mines be allowed to export raw minerals for the next two years to earn rupee.

The cabinet decision on this is still awaited but sources say that the cabinet had pressurized the ministry to come up with such a proposal in the face of the rupee crisis.

The decision comes as a dramatic shift in the mining policy of the government which until recently had been aggressively promoting export of only value added minerals through industries based captive mines.

In the last few years the government had managed to convince highly skeptical miners to value add  raw minerals instead of exporting them raw. In fact miners complained that the government’s value addition standards were stringent.

A miner on the condition of anonymity said, “Eventually all of us fell in line because we realized that there were more profits for us, it was more sustainable and at the same time the nation could also get more revenue.”

Even the mother of all economic policy document the Economic Development Policy (EDP) has mentioned in several instances on value addition for export of Raw materials. The EDP says “Mineral based industries shall be permitted on evidence of substantial value addition and availability of raw materials.”

It also says, “The Policy shall facilitate the mining sector to overcome the challenges of essential resource constraints, environmental degradation and low value addition,” with respect to mining and quarrying.

The miner said that the MoEA’s proposal which is likely to be accepted by the cabinet is also violation of the EDP policy itself. He said that the EDP policy clearly mentions that any deviation from the policy can only be for a period of not more than a year.

However, in the case of this proposal it was to allow raw mineral exports for the next two years.

The two key minerals that could be affected by this decision would be eight to nine captive limestone mines owned by mainly cement factories and three to four quartz mines owned by Ferro Silicone factories.

A government official explained that the government was looking to boost rupee earning in the short and medium term through this measure.

He explained that the export of minerals would mean that factories who are using only a portion of their mining capacity can export the minerals they are not using to generate rupee.

He said that factories could also export low grade minerals that cannot be used in the factory.

Some miners say that they welcome the initiative to allow export of low grade minerals but are against export of high grade minerals.

However, there are also differences of opinion in the mining sector on the MoEA’s raw mineral export proposal. Some miners on the other hand are unhappy that the government is allowing export of raw minerals for only two years and not more.

BCCI President Ugyen Tsechup Dorji said, “If it is in the interest of the country we will welcome the government’s decision to allow export of surplus minerals but the two year period is too short for anyone to invest in and open a mine for exporting minerals.”

Government officials in the recent past have harped on the importance of value adding on numerous interviews and speeches.

Miners and business people point out that the two year allowance of export of raw minerals is a desperate and short-term move by the government that will neither benefit those in favor of value addition or those who want to export minerals in large quantities.

 

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8 comments

  1. I am saddened by the MOEA proposal to mine and sell the raw materials to earn Indian rupee. This is a short sighted and desperate move with long term adverse ecological consequences. If the present Government continues to rule Bhutan, one day they may even propose to cut down all trees to earn rupee. This is very dangerous policy move and will seriously dent the image of Bhutan as clean and pristine country. All their talk of environment conservation, GNH etc. are compromised if such proposal is approved. I hope the common sense prevails and hope that long term future of Bhutan is not sacrificed on the alter of short term economic gains for few companies or individuals.

    Cheers

  2. if the move benefits the government even for a short duration before the hydro power sector generates rupee, why not sell it and earn for the country than to benefit few individuals inside

  3. If we follows pema’s line of thought we might as well sell our nation so we can protect the sacrosant hydro sector. We will sell our ideals, values and our intigrity so that the ‘hydro’ may survive. And so that a few top officials of these hydro entities can enjoy the weath of the nation. Have you guys checked out the fancy landcrusers that the MD’s and Chairmans of DHI, DGPC, BPC etc buy thrmselves with the peoples money as they work Soooooooo hard for Sooooooooooo little on OUR Behalf…… 

    • I as a committee member studied the current situation of mining and quarrying in Bhutan and came to a conclusion that irrespective of strict govt regulations for controlling the activities the contribution of this sector in the economy of the country is negligible, its rather doing more harm than good. Yes value addition is a good move so that the minerals remain in the country and is assured for its availability for longer duration to the industries set for the purpose but the big big companies are not contributing anything inspite of some many incentive given to them by the govt, like, tax holiday, power subsidy etc etc so I support the govt move for allowing export of raw materials which might bring some relief but with very strict compliance to the rules and regulations, all the best MOEA 

  4. How can government propose such thing?
    It is very shortsighted planning. If we explore mines for now, what will we keep for our future generation.
    Even for hydro, the government is trying to construct all hydro at once, with manpower mostly from India. I am wondering, what will our future generation with high qualification do, when we have sufficient engineers and managers?
    Let us all suffer for short term, so that we can adapt and learn and develop new innovative idea to gain more rupees.
    I am totally against this proposal of mining the raw material.

  5. psuedo engineer

    mining lobby is hard at work!

    how much revenue will the country get? how much will the few mine owners get:?

    How much damage will be done? and how much of finite resource from a small country be gone and not available for our and future generations? Wht will be the social and total economic cost (not financial only) be for locals around mines and for the hydro economy be?

    What happened to the GNH philosophy?

    Have our the politicians succumbed to yet another pressure group (Mining Lobby now after the Ferro silicon and other groups before)

    Maybe they want to provide more fodder for Mr. Lamzangs?

  6. But normally we do not mine finished goods mena?.

  7. If we are not going to make use of our natural resources at these times of adversity, when will we do so. As far as innovative ideas are concerned, the only thing I can think of to get rid of the rupee crisis is to probably get rid of Ngultrums and make IC our currency.

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