Bhutan
MINES AND MINERALS
MANAGEMENT ACT, 1995
CONTENTS
CHAPTER I: PRELIMINARY
Definitions
Ownership of Minerals
Application of the Act
CHAPTER II: ADMINISTRATION
Powers of the Head of Ministry
Powers of the Head of the Division
Functions of the Division
CHAPTER III: MANAGEMENT OF EXPLORATION AND MINING
ACTIVITIES
Exploration
Grant of Mining Lease
Final Mine Feasibility Study
Protection of the Environment
Rights of the Lessee
Obligations of Lessee
Suspension or Termination
CHAPTER IV: PROPER CONDUCT OF MINING
OPERATIONS
Operational Mining Scheme
Appointment of Mines Manager
Compliance with Proper Mining Procedures
Accident Reporting, Investigations
CHAPTER V: MINERAL LEVIES
Royalty
Surface Rent
Other Government Levies
CHAPTER VI: OFFENSES AND PENALTIES
Offenses
Penalties
CHAPTER VII: DISPUTE RESOLUTION, APPEALS, ARBITRATION
CHAPTER VIII: REGULATIONS
CHAPTER IX: MISCELLANEOUS
Transition Period
Conflict of Laws
MINES
AND MINERALS MANAGEMENT ACT 1995
CHAPTER I: PRELIMINARY
1. This Act shall be called the Mines and Minerals
Management Act 1995.
2. The Act shall come into force on the First Day of
September 1995.
3. This Act shall extend to the whole of the Kingdom of
Bhutan.
Definitions
4. In this Act and in all regulations made thereunder,
unless the context otherwise requires:
a. Division:
shall mean the Division
of Geology & Mines.
b.
Exploration:
means the prospecting and
further geo-scientific
investigations necessary
to determine the location,
extent and socio-economic
feasibility of a mineral
deposit prior to
determining whether to proceed with
the commercial
exploitation of such deposit.
c. Final Mine Feasibility
Study:
means the final mineral
deposit assessment report
containing, in reasonable
detail, the technical,
financial, environmental
and social impact analyses
required prior to the
approval of a mining lease.
d. Government:
shall mean the Royal
Government of Bhutan.
e. Head of Division:
means the Head of the
Division of Geology and Mines.
f. Head of Ministry:
means the Minister for
Trade and Industry.
g. Inspector:
shall mean an officer
appointed by the Head of
Division to enter and
inspect a mine for any purpose
as specified in this Act.
h. Kingdom:
shall mean the Kingdom of
Bhutan
i. Lessee:
shall mean a person or an
organization who has been
granted a mining lease.
j. Lessor:
shall mean the Head of
Division who has formally
been accorded permission
by the Ministry to execute
a mining lease agreement
with the lessee.
k. Mine:
when used as a noun means
an opening or an
excavation in the ground
for the purpose of mining,
opening up or proving a
mineral bearing substance or
ore deposit, and includes
the place where a mining
operation is carried on
together with buildings,
premises, machinery,
plants, roads and any other
access above and below
the ground used in connection
with a mins.
l. Mine:
when used as a verb means
intentionally to search
for and remove minerals
from a mining area and
includes any operation
which is necessary for such
an activity, and
encompasses the term "mining".
m. Mineral:
means any substance
occurring naturally in or on the
earth and having formed
by or subject to a
geological process and
which can be obtained from
the earth by digging,
drilling, dredging, quarrying
or by other mining
operations.
n. Mining Area:
means land covered under
a mining lease.
o. Mineral Processing:
means the approved
value-added beneficiation of
minerals obtained from a
mine by a physical,
chemical or other
processes.
p. Mining Lease:
means a lease granted by
the Ministry for commercial
exploitation of a
mineral.
q. Mining Lease
Agreement:
means a document
containing additional terms and
conditions relating to a
specific mining area,
signed by the lessee and
executed on behalf of the
Government by the lessor,
and attached to each
mining lease.
r. Ministry:
means the Ministry of
Trade and Industry.
s. Officer:
shall mean a person
authorized by the Head of
Ministry to exercise
power conferred by this Act.
t. Order:
means any notification,
order or other document
authorized or required by
this Act to be served on
any individual or
organization.
u. Prescribed:
means prescribed by
Regulations formulated under
this Act.
v. Regulations:
means the Regulations
made under this Act.
w. Surface Rights:
means right to ownership
of land as per Land Act of
the Kingdom.
x. Transport Permit (challan):
means the official
transport permit issued by the
Division for the purpose
of transporting minerals.
Ownership of Minerals
5. In accordance with section KA 11-1 of the THRIMSHUNG -
CHHENPO, all rights of ownership of minerals are vested
exclusively in the Government whether occurring in private or
government land.
Application of the Act
6. The Ministry may grant mining leases in accordance with
the provisions of this Act.
7. No person or organization shall be permitted to carry out
exploration, mining and related activities except as provided
in this Act.
8. All minerals shall be developed in accordance with the
policies of the Royal Government of Bhutan, with due respect
for efficient use of the resources, protection of the
environment, and worker and public health and safety.
CHAPTER - II: ADMINISTRATION
Powers of the Head of Ministry
9. The Head of Ministry may, by notification, make rules and
regulations and issue orders for any purpose consistent with
the intent of this Act.
10. The Head of Ministry shall be the sole authority to lease
mineral deposits and he shall delegate ali necessary powers to
the Head of Division.
Powers of the Head of Division
11. Under the directives of the Ministry, the control of all
exploration, mining, mineral processing and geo-scientific
activities in Bhutan shall vest with the Head of Division
12. The Head of Division shall have all necessary power and
authority to implement and enforce this Act and all
regulations made under it, and to carry out administrative and
technical supervision of all operations covered by this Act.
13. The Head of Division may issue orders for any of the
following matters or purposes:
i. For conducting scientific mining practices
consistent
with the method(s) and standard(s) prescribed by this
Act.
ii. Preservation, protection and setting standards of
environment and conservation of natural resources
consistent with the provisions of this Act, and other
environmental legislation.
iii. Quality control and conservation of ore/minerals.
iv. Proper conduct of all mining operations consistent
with the provisions of this Act.
v. For matters pertaining to any illegal activity that
may contravene any of the terms and conditions
prescribed
by this Act and laid down in the Lease Agreement.
vi. Any other matter in respect of which actions or
notices are deemed necessary for enhancing the
implementation and effecting the provisions of this
Act.
Functions of the Division
14. The functions of the Division shall be;
i. to execute or supervise the undertaking of all
systematic geo-scientific investigation in the Kingdom
and the preparation and publishing of maps and reports
documenting such research.
ii. to identify and assess the mineral resources of the
Kingdom.
iii. to evaluate the socio-economic feasibility of
mining, processing and marketing, sale and export of
minerals and mineral products.
iv. to ensure the sustainable development and
utilization
of the mineral resource of the Kingdom.
v. to ensure that the restoration of the areas that are
mined is carried out in a proper manner with the
objective of creating a suitable and acceptable
environment as approved by the National Environment
Commission.
vi. to control, regulate and monitor the
exploration and
mining of minerals in approved areas.
vii. to maintain registers, maps and appropriate
technical and financial records of all mining leases.
viii. to periodically notify the Division of Revenue
&
Customs regarding fees, rents, royalties and other
payments due under the provision of this Act.
ix. to enter into and inspect any land, mine or other
premises directly or indirectly related to a mining
lease
and to ensure provisions of this Act are being complied
with.
x. to establish and maintain facilities relating to the
mineral resources heritage of the Kingdom.
xi. to provide professional advice, as required, to the
Ministry on all research aspects related to improved
management of mineral resources.
CHAPTER - III: MANAGEMENT OF EXPLORATION AND MINING
ACTIVITIES
Exploration
15. All exploration in the Kingdom shall be carried out by the
Division or where authorized by the Head of Division, by other
persons/agency operating under his supervision and under such
terms and conditions as may be prescribed.
Granting of Mining Lease
16. A mining lease shall grant the lessee the right to mine
the mineral or minerals specified in the mining lease
agreement.
17. Any individual or organization may apply for a mining
lease to the Head of Division.
18. The mining area covered under the mining lease shall be
for a definite area as demarcated by the Division.
19. A mining lease shall be granted for a mining area only
after clearance of such area has been received from all
concerned authorities of the Government by the Head of
Division.
20. A mining lease shall be given for a specified period and
under terms and conditions as stipulated in a mining lease
agreement.
21. A mining lease shall be given, provided the applicant
i. is able and willing to comply with all the terms and
conditions as prescribed in this Act and the mining
lease
agreement.
ii. has adequate financial resources, technical
competence and experience to carry out the mining
operations effectively.
iii. has not been disqualified by the Government to
apply
for a mining lease.
Final Mine Feasibility Study
22. Prior to granting of a mining lease a final mine
feasibility study is required to be prepared and submitted.
Such a study shall contain an assessment of technical,
financial, environmental and social parameters which
demonstrate, in a reasonable manner, the socio-economic
viability of the proposed mine. Such a study shall be prepared
by either a prospective lessee or the Division in keeping with
the format determined by the Division.
23. The Final Mine Feasibility Study shall include, inter
alia, a Mine Plan, Environment Management Plan and a Mine
Restoration Plan, and other data as prescribed.
Protection of the Environment
24. The Environment Management Plan shall be prepared on the
basis of a format determined by the Division which, inter
alia, should include the size and sensitivity of the proposed
mine, but shall contain, in as detailed a manner as deemed
sufficient by the Head of Division the following site-specific
environmental impact assessment:
i. base-line sampling and analysis of soils, surface
and
sub-surface waters, air quality and noise levels, plant
and animal life, and
ii. analysis of the effects that mining, possible
processing, worker activities, transport of workers and
mine products, will have on existing human habitation
and
current uses of land, water, plant and animal
resources.
25. The Mine Restoration Plan shall be evaluated on the size
and sensitivity of the proposed mine site and shall be
prepared on the basis of a format determined by the Division.
Rights of the Lessee
26. Subject to the provisions of this Act and the mining lease
agreement; a lessee may in the mining area:
i. Have the exclusive right to mine the mineral or
mineral(s) specified.
ii. Construct, operate and maintain mines, work plans,
roads, aerial ropeways, communication systems and other
facilities necessary or convenient for carrying on the
purpose of the lease, and upon obtaining necessary
industrial license and approval from the Ministry for
the
establishment of processing plants.
iii. Sell the minerals mined.
27. Subject to any condition of a mining lease a lessee may:
i. With the permission of the Ministry, transfer the
mineral rights and obligations of a mining lease to a
qualified third party.
ii. Surrender the mining area covered by the lease or
part thereof by giving the Head of Division not less
than
three months notice of his intention to do so.
iii. The surrender of any area covered by a mining
lease
shall not be rendered effective until the Head of
Division has issued approval effecting the surrender of
the referred area(s).
Obligations of Lessee
28. Subject to the provisions of this Act, a holder of a
mining lease shall:
i. Carry out mining operations in accordance with the
Mine Plan, Environment Management Plan and Mine
Restoration Plan and schedules submitted by the lessee
and approved by the Head of Division and in accordance
with the Act and the terms and conditions laid down in
the mining lease agreement.
ii. Keep accurate records of all components of the
mining
operation carried out in such form as may be
prescribed.
iii. Keep accurate financial records of all components
of
the mining operation in such form as may be prescribed.
iv. Notify the Head of Division at least three months
in
advance if the lessee desires to cease, suspend or
curtail production from his mine.
v. Erect boundary pillars as may be prescribed once the
mining area is surveyed by the Division.
vi. Transport minerals only after being issued with a
transport permit.
vii. Abide by all regulations and orders as may be
issued
by the Head of Division.
viii. Recognize obligations that may continue to apply
beyond surrender, suspension, termination or expiry of
the lease.
29. Upon expiry, surrender or termination of a mining lease
the former holder of the lease, subject to the provisions of
this Act and any condition of the mining lease, shall
i. Remove within six months after the date of permanent
closure, as determined by the Head of Division, any
building, machinery or other movable property from the
mining area unless otherwise required.
ii Not be entitled to any compensation from the
Government for any immovable property or any
development
works, including roads and bridges constructed in the
mining area, unless otherwise specified in the lease
agreement.
iii. In the event the termination was due to some
change
in government policy and without any fault of lessee
then
some reasonable compensation may be considered by the
Ministry based on the circumstances.
30. Upon expiry or termination of a mining lease the lessee
shall deliver to the Head of Division:
i. Records required to be maintained as prescribed.
ii. Plans and sections relating to the mining area.
31. The Lessee shall take appropriate measures to ensure that
all mining operations are conducted systematically and in
accordance with the norms and parameters set by the Division
with the objective to promote mineral conservation.
Suspension or Termination
32. The Ministry may by order to the lessee, by giving
sufficient notice, suspend or terminate a mining lease, if the
lessee;
i. Fails to pay any due on mineral levies and any other
government levy.
ii. Contravenes any provision of this Act, or any
condition of his lease.
iii. Contravenes any other law of the Kingdom related
to
maintaining provisions specified by this Act.
CHAPTER - IV: PROPER
CONDUCT OF MINING OPERATIONS
Operational Mining Scheme
33. Following the approval of the Final Mine Feasibility Study
and the granting of a mining lease, the Lessee shall, within
sixty days, submit an operational mining scheme containing the
following information:
i. the expected date of commencement of production, and
ii. any modifications to the details contained in the
Final Mine Feasibility Study with respect to the Mine
Plan, Environmental Management Plan and the health and
safety measures.
34. The Lessee shall comply with the approved operational
mining scheme and shall provide reports on the progress of
mining as well as necessary operational updates and revisions
to the scheme, on an annual basis, as prescribed in the
Regulations.
Appointment of Mines Manager
35. The Lessee shall appoint a suitably qualified mines
manager when:
i. The Head of Division has notified the Lessee that a
manager is required.
ii. There are ten or more persons employed at the mine.
36. A mines manager who shall be made known to the Division in
writing, shall, on behalf of the Lessee;
i. be responsible for the control and daily supervision
of the mine,
ii. reside close to such mines.
Compliance with Proper Mining Procedures
37. The Lessee shall be responsible for ensuring compliance
with the following:
i. Health and safety of workers in and around mines.
ii. Sanitary and drinking water conditions and
facilities
in and around mines.
iii. Emergency medical facilities.
iv. Training to be provided for miners.
v. Management for the safe use and storage of
explosives
in mines
vi. Management and safe disposal of waste, refuse and
poisonous substances in mines.
vii. Submission of reports on accidents occurring in
mines.
viii. Maintenance of records and accounts relating to
mine operations.
ix. Preparation and submission of annually updated Mine
Plans,Environmental Management Plans and Mine
Restoration
Plans as originally defined in the Final Mine
Feasibility
Study.
Accident Reporting, Investigations
38. Where an accident resulting in loss of life or serious
bodily injury to any person has taken place in connection with
work directly or indirectly related to a mining lease, the
lessee/mines manager or any other person that the lessee has
placed in charge of the mine must, after immediately reporting
such accident to the relevant Ozongkhag authorities also
forthwith inform the Head of Division and follow it up with a
written report to the Head of Division documenting the facts
of the incident as soon as possible after the occurrence of
the accident.
39. Upon being notified about the accident, the Head of
Division shall immediately carry out the necessary
investigation, prepare and submit a separate report on his
findings with recommendations to the Ministry.
40. Except having to carry out immediate rescue and safety
operations for workers and people, the place where the
accident has occurred shall be left as it was immediately
after the accident until the Head of Division's investigation
is completed.
41. Where there is reason to believe that the accident was due
to failure to comply with provisions under this Act, the
Ministry may commission an additional inquiry, if necessary,
and initiate suitable action in accordance with this Act.
CHAPTER - V: MINERAL LEVIES
Royalties/Mineral Rent
42. A lessee shall pay royalty and mineral rent to the
Government for any mineral mined from the mining area at the
rates prescribed by the Government and officially notified
from time to time.
Surface Rent
43. A lessee shall pay surface rent for the mining area at the
rates prescribed by the Government and notified from time to
time.
Other Government Levies
44. The holder of a mining lease shall pay taxes and other
government levies in accordance with the rates and terms laid
down by the Government which may be revised from time to time.
CHAPTER - VI: OFFENSES AND PENALTIES
Offenses
45. A lessee or any person shall be guilty of an offence if
he:
i. Carries out exploration or mining operations in
contravention with the provisions of this Act.
ii. Purchases any mineral from a person or transports
minerals without proper documents.
iii. Gives false or misleading statements or
information
in submitting applications or reports to the Head of
Division.
iv. Alters or removes any notices, signboards, boundary
posts in any mining area without the approval of the
Head
of Division.
v. Fails to comply with any of the provisions under
this
Act or the terms and conditions of a mining lease.
vi. Fails to maintain records, books and registers
required by the provisions of this Act and Regulations
made under it.
vii. Fails to extend the necessary co-operation to an
officer or employee of the Division or obstructs such
officer or employee in the execution of authorized
duties.
Penalties
46. Any Lessee or a person guilty of an offence under:
i. Article 45 (i) and (ii) of this Act, shall be liable
to a fine which amounts to twice the value of the
products in question or imprisonment up to three months
or both at the first instance along with the seizure of
the material and equipment.
ii. Article 45 (iii) and (vi) of this Act, shall be
liable for a fine of Nu. 5,000/- at the first instance
along with the seizure of the material and equipment.
iii. Article 45 (v) of this Act, shall be liable for a
fine of Nu. 5,000/- at the first instance
iv. Article 45 (iv) and (vii) of this Act, shall be
liable for a fine of Nu. 10.000/- at the first
instance.
47 (a). If a person is guilty of any offence mentioned under
Article 45 for more than one instance, then the penalty as
stipulated under Article 46 shall be doubled for every
successive offence.
47 (b). If a Lessee is guilty of any offence mentioned under
Article 45 for more than one instance, then the penalty as
stipulated under Article 46 shall be doubled for the second
instance after which the mining lease will be withdrawn and
further legal action will be taken.
CHAPTER - VII: DISPUTE RESOLUTION,
APPEALS, ARBITRATION
48. If any dispute or conflict relating to a lease should
arise, an attempt shall be made in the first instant to settle
the matter amicably through informal dialogue, using the good
offices of the Head of Division and/or the Ministry.
49. Disputes outside the jurisdiction of this Act or the
purview of the Ministry shall be referred to the concerned
Courts of Law of the Kingdom for appropriate action.
CHAPTER - VIII: REGULATIONS
50. The Ministry may, inter-alia, issue regulations in respect
of the following matter for carrying out the provisions of
this Act:
i. Control and regulate the production, possession,
purchase, sale, transport, export and import of
minerals.
ii. Prescribe the parameters for various types of
mining
operations.
iii. In keeping with the national health and safety
laws,
prescribe standards on environmental protection,
effluent
discharges, noise levels, use of explosives. etc. for
all
mines.
iv. Prescribe measures for the proper disposal of
tailings, waste products and other harmful substances.
v. Prescribe measures for the restoration, reclamation
and rehabilitation of mining areas before mining
commences, during mining and after mining is
discontinued.
vi. Prescribe provisions for the establishment of
mining
lease boundaries and surveys of mining areas.
vii. Prescribe measures governing the operation of a
mine
with respect to public safety.
viii. Prescribe and provide for fees, rentals,
royalties
and other levies under this Act and the manner for
collecting and disbursing such fees.
x. Prescribe the contents of all documents, records,
statistical reports, plans as may be required under
this
Act.
CHAPTER - IX: MISCELLANEOUS
Transition Period
51. Any person holding an existing mining lease will be given
a period of 12 months from the official date of enactment of
this Act, at which time the provisions of the Act will apply
to the holder of the mining lease.
Conflict of Laws
52. In all matters relating to mines and minerals, where any
inconsistency exists between the provisions of this Act and
the operation of any other Act, the provisions of this Act
shall prevail. However, where the Division has to carry out
activities in forest areas in accordance with this Act, it
shall do so in consultation with Division of Forests.
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Updated by PAP/SUT/TRS. Approved by BKL. Last updated on 5 March 2001