On Mines

There is much interest in the discussions in the Parliament on the Mines and Minerals Bill for the last few days.

The main argument focused on ownership and obligations of the miners.

The Bill is unique in that the Economic and Finance Committee held a public hearing which was broadcast live in addition to the visits by the committee members to mines around the country.

Mining has always been controversial in Bhutan, and at a point of time, frequently hit the headlines for either in-transparency or its impact on local communities.

Mines were seen to benefit only a wealthy few at the cost of many and there were questions on how mines were allotted.

A RAA report at the start of democracy pointed out various issues in mines and violations of various regulations and its impact on people. There were also ACC investigations in the past on mining practices.

This lead at one point to the ACC even advocating an end to mining in Bhutan, while the NC advocated a complete nationalization of mines.

Another RAA report pointed to unethical practices by mining companies which, among others, defrauded even shareholders.

What has been very clear over a long period of time is that Bhutan’s mining sector needs good and effective regulation, as the past instances showed regulatory failure.

The mining industry also did not behave well and as a result public opinion turned against it leading to ever stronger calls for nationalization.

The Bill is only a start as it will lay out a clear legal framework once it is passed in both houses and becomes law.

The next important step is to ensure that the Mining Regulatory Authority is an affective agency with real muscle.

At the same time, it is also important to understand that, if properly exploited and regulated, Bhutan’s mineral and mining sector has a lot of potential to generate revenue and create jobs.

As correctly surmised so far, the solution to Bhutan’s mining issue is not nationalization as it will be passing the buck to the government, which neither has the efficiency or the competency to take over the entire mining sector. It will be like killing the golden goose.

The government should hold on to strategic minerals like gold, silver, tungsten etc. as these are highly valued, if and when found.

The mining industry should also stop playing the short term game and look at the industry as a long term investment and industry where it must seek to derive sustainable benefits.

Importantly, the impacted local communities must be given adequate say and protection in what is happening around them.

If the regulation is dust control, then the agencies and system must ensure that, otherwise it can have an impact on health and crops.

Mining is a patient game and it always will be.
Clive Palmer

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