Arya News - More than five years after vanishing without a vote, the long-debated Mines and Minerals Management Bill is expected to return to Parliament this winter, bringing back unresolved questions about the constitutional authority used to shelve it.
THIMPHU – More than five years after it vanished from the legislative agenda without a vote, the long-debated Mines and Minerals Management Bill is expected to return to Parliament during the winter session, trailing behind it an unresolved question about how, and under what constitutional authority, it was shelved in the first place.
The Department of Geology and Mines (DGM), under the Ministry of Energy and Natural Resources (MoENR), has submitted a reworked draft—the Mines and Minerals Management Bill of Bhutan 2026 — to the Cabinet, having revised contentious provisions on strategic minerals.
The Bill is intended to replace the Mines and Minerals Management Act of 1995, a nearly three-decade-old law widely regarded as ill-suited to today’s economy and technology.
According to the DGM, the new Bill aligns with the Mineral Development Policy 2017 and places greater emphasis on strategic mineral development, investment security, value addition, environmental stewardship and equitable socio-economic benefit-sharing. It draws on the Mineral Exploration Guidelines 2023 and the Mines and Minerals Management Regulations of 2022, and will repeal parts of the 1995 Act.
Article 1 of Bhutan’s Constitution states that “the rights over mineral resources, rivers, lakes and forests shall vest in the State and are the properties of the State, which shall be regulated by law”. It is this provision, and the unresolved politics around it, has shadowed the Bill since 2020.
Bill deferred, Constitution unanswered
According to the National Assembly Secretariat, the Mines and Minerals Bill of Bhutan was put into discussion during the Parliament in June 2021.
The Speaker deferred the Bill after the Joint Committee chairperson, Member of Parliament Kinley Wangchuk, reported that six committee meetings had failed to produce consensus.
The Constitution, however, does not appear to permit that outcome. Article 13 (8) states that “where the House in which the Bill originated refuses to incorporate such amendments or objections of the other House, it shall submit the Bill to the Druk Gyalpo, who will then command the Houses to deliberate and vote on the Bill in a joint sitting.”
Observers at the time noted that the article makes no provision for deferment, only a command to deliberate and vote.
Past Kashos on joint sittings have also made clear that a bill must be put to a vote, and if it fails to secure numbers, it becomes a dead bill. Parliament, instead, deferred the Bill under Section 59 (A) of the Legislative Rules of Procedure – a parliamentary rule, not a constitutional provision.
Asked under what constitutional authority this was done, the National Assembly defended its use of a procedural rule to override Article 13(8).
The DGM did not answer the constitutional question directly. “The deferment of the MM Bill in 2020 was an internal parliamentary process,” the DGM said.
It said the ministry instead “focused on ensuring regulatory stability to prevent any legislative vacuum,” using the existing MMMA 1995 “to improve sector governance, while simultaneously engaging in a rigorous process to draft a new, comprehensive Bill”.
The department called this “a proactive, rather than inactive, approach to legislative reform”.
The Prime Minister’s Office (PMO), also did not engage directly with the Section 59(A)-versus-Article 13(8) conflict, on what specifically was wrong with the 2020 Bill and what changes it required. The PMO instead framed the deferment as a judgment call by the previous Parliament.
“The 2020 Bill was deliberated during the 4th Session of the 3rd Parliament and was subsequently deferred, as it was felt that a broader consensus was needed to fully align the Bill with the nation’s long-term interests,” the PMO said. “The present Government is not in a position to question the judgment or intent of the previous Parliament and government in reaching that decision.”
Neither the DGM nor the PMO cited a specific constitutional basis for the deferment.
Deferred or dead bill?
Under convention, a deferred bill can reportedly be reintroduced as a Private Member’s Bill or a Government Bill after six months. It has now been roughly five years. Critics who followed the 2021 debate say the delay confirms what they argued then, that deferment was designed to function as a permanent burial, without a vote.
However, the DGM stated that the suggestion that the deferment was intended to function as a ‘permanent burial’ is entirely unfounded. “Drafting a primary law of this complexity requires extensive consultation to ensure it balances economic utility, environmental sustainability, and the equitable distribution of state resources.”
It added that time taken was not a period of inaction, but a deliberate strategy to refine the Bill, incorporate feedback from diverse stakeholders, and align the framework with contemporary mining industry standards.
Pressed on why the silence persisted, and whether institutions had reached a tacit understanding not to reopen the Bill, the DGM pointed to the interim regulatory route it had taken instead.
“The period following the deferral of the 2020 Bill has been one of focused legislative and regulatory strengthening rather than inactivity,” it said. “The Ministry strategically identified important provisions from the previous draft that were coherent with the existing 1995 Act and made them more explicit by incorporating them into revised regulations and policies.”
This allowed the sector to benefit from clearer guidelines and improved legal coherence in the interim, while a rigorous redrafting process for the 2026 Bill proceeded alongside it, involving renewed and extensive consultations with all relevant stakeholders.
The PMO linked the redraft to the government’s 10X Economic Roadmap and Diamond Strategy. “Our legislation must be dynamic rather than static,” it said. “The Mines and Minerals Bill 2026 is not merely a revision of the earlier draft — it is a substantive strengthening of our legal framework, purpose-built to support Bhutan’s current economic transformation.”
Most MPs, however, had little to say when approached directly. Most Members, particularly from the ruling party, said they were not aware of the Bill and declined to comment.
Pempa, MP for Bongo-Chapcha, was among the few willing to speak. “The Mines and Minerals Bill 2020 was deferred during the legislative process. I respect parliamentary procedures and the Executive’s responsibility in preparing legislation for reintroduction.”
He said Bhutan’s legal frameworks must evolve alongside modern realities and that resource governance demands an uncompromising balance between economic growth, environmental stewardship, transparency, community protection, and intergenerational equity.
A former minister offered a narrower explanation for why the 1995 Act itself was left untouched even as the Forest and Nature Conservation Bill 2023 proceeded separately. He said that Bill had been deliberately confined to matters above ground – forests, vegetation, wildlife and topsoil – leaving minerals, sand and stone under the 1995 Act, a division meant to resolve long-running overlap between forest and mining legislation that had previously caused disputes between the Department of Forests and Park Services and the DGM over sand and stone quarries.
Oligopoly and list hidden
Article 9(7) of the Constitution mandates the State to minimise income inequalities and prevent concentration of wealth. Article 9(10) calls for private sector development through fair competition. Article 14(16) prohibits Parliament from enacting laws that allow monopolies, barring national security grounds.
One former parliamentarian, criticising the government’s prolonged silence on the deferred Bill in the absence of adequate national debate, argued that natural resources have remained concentrated in the hands of a few elites. “We are a land of happiness where elites dig the minerals and commoners breathe the dust,” he said.
The DGM acknowledged the concern but defended existing regulations as lawful and constitutionally grounded, rejecting the suggestion that they favour elite interests. “The Mines and Minerals Management Regulations 2022 was adopted by the MoENR based on the provisions of the existing MMMA 1995,” it said. “The Regulations do not constitute new legislation, nor do they replace or amend the existing Act, but serve as subordinate legislation, with its legal basis entirely derived from the primary legislation.”
Under the regulations, no household may hold more than two mining or quarrying leases at any one time. Leases for gypsum, dolomite and coal mines were all allocated to the State Mining Corporation Limited (SMCL) for 15 years under the 2022 rules.
“Currently, there are no private individuals, family, or corporate groups owning more than two quarrying or mining leases as per DGM’s record,” DGM said.
The two-lease limit, however, does not apply to SMCL as a state-owned enterprise. A multi-sectoral price-fixing committee, with members from the Ministry of Finance, Druk Holding and Investments, the Bhutan Chamber of Commerce and Industry, and the MoENR, reviews domestic mineral prices, alongside a Minimum Floor Price for export minerals under the Taxes and Levies Act 2017.
Despite repeated requests, the DGM and the Ministry declined to provide the actual list of mine and quarry owners, making the department’s claims difficult to verify independently.
The opposition party maintains that Article 1 of the Constitution provides that mineral resources belong to the State and are to be regulated by law.
“The Constitution also embodies the principle that national wealth should benefit the people and that excessive concentration of wealth should be avoided. This constitutional principle has been central to the Opposition Party’s mining policy proposal in our manifesto,” Tashi Tenzin, MP for Radhi-Sakteng said.
He said that the party has consistently advocated that mining governance should promote broad-based ownership, greater transparency and fair distribution of benefits rather than concentration in the hands of a few individuals or operators.
The opposition party has proposed governance models that seek to balance national ownership, private participation and public equity while ensuring that strategic minerals remain under appropriate national control.
The opposition had raised with the government, during the First Session of the Fourth Parliament, that reintroducing the Bill was a key manifesto commitment in the 2023 election, and that the State of the Nation Report 2025 lists review and enactment of the Bill as part of the government’s own legislative agenda.
Gangzur Minjey MP Loday Tsheten said it is time for the government to revisit and table the Bill, arguing that concerns surrounding the 2020 Bill should be addressed through parliamentary deliberation and stakeholder consultation rather than continued delay. “The question should be whether the country is receiving an appropriate share of the value generated from its finite mineral resources.”
However, he said he does not support claims that mining benefits are limited to a few private operators, noting the growing role of state-owned mining operations. “The focus should ultimately be on ensuring that Bhutan’s mineral wealth is managed transparently and in the long-term national interest.”
What the assessments found
The Intergovernmental Forum (IGF) Mining Policy Framework Assessment for Bhutan, published in March 2025, found that the clearance system is onerous due to fragmentation and bureaucratic processes. It also found that monitoring of mining operations was weak due to inadequate resources while systems for community consultation, engagement, and benefit distribution were inadequate throughout the permitting process and mining life cycle.
It also found no evidence that government has used an economic model to assess the total impact of mineral royalties, fees, Corporate Income Tax, and tax incentives against its other policy goals.
The DGM did not dispute the finding outright but called it partial. “This assessment presents a cursory view of what has been practised in a few mining sites and does not represent best practices adopted by the mine promoters within the mining fraternity,” it said, pointing to consultation built into local government legislation through the Gewog Tshogde and Dzongkhag Tshogdu.
On restoration after mining, the DGM said restoration is legally required under the MMMA 1995, the MMMR 2022, the Mining Lease Agreement, and the Mines Restoration Guidelines 2021.
“Operators deposit an ERB as security, returned only upon satisfactory restoration verified by DGM; where operators fail to restore, the Department uses forfeited ERB funds to execute the work itself, and such measures have been executed in several instances,” the DGM said.
So far, the DGM has no cases of the Department of Environment and Climate Change (DECC) issuing a clearance and subsequently directing relocation. “Relocations that have occurred, stemmed from national development priorities or unforeseen circumstances such as natural disasters after issuance, not from gaps at the clearance stage.”
The Department of Revenue and Customs (DRC), when asked whether it had assessed risks of under-reporting, under-invoicing, transfer pricing, or royalty and tax avoidance in mining, and how much additional revenue such assessments had recovered, said mining entities are taxed like other corporate taxpayers on profit rather than on the volume or value extracted — meaning income tax collected is not, by itself, an appropriate measure of whether the public receives a fair share of mineral wealth.
It said risk assessment of under-reporting, transfer pricing, and royalty computation is part of its compliance risk management framework, with appropriate audits, reassessments, recovery of taxes, imposition of penalties and interest where discrepancies are found.
However, it said outcomes of individual audits are confidential under tax law and cannot be disclosed, and that it does not maintain a consolidated record of revenue recovered specifically from mining sector compliance work.
On inequality, the PMO was asked whether it had tracked Bhutan’s Gini coefficient which reportedly rose from 0.35 in 2007 to 0.38 in 2017; since the 2022 interim Regulations took effect, given Article 9(7)’s mandate. The Gini coefficient was 0.36 in 2003, 0.35 in 2007, 0.36 in 2012, 0.38 in 2017, and 0.28 in 2022 — the latest official figure, measured on household consumption rather than income.
A decade of warnings
A 2016 study of the mining sector’s business environment, conducted jointly by the Anti-Corruption Commission, the Royal Institute of Management and France’s Audencia Business School, had flagged many of the same structural weaknesses years earlier. It found weak functioning within the DGM; inadequate assessment of mineral resources and human resource capacity; the absence of a dynamic human resource development plan; weak stakeholder partnerships; and weak leadership. Monitoring, it found, was undermined by the DGM’s dual role as both regulator and production facilitator, alongside insufficient budgets and weak compliance oversight.
The study also found that royalties had not been revised since 2006, despite patchy implementation of existing guidelines, and recommended periodic revision of royalty rates, mineral rents, and licence and surface rents. It flagged unclear procedures within Dzongkhag Land Lease Committees, ill-defined public consultation processes, a lack of monitored corporate social responsibility action, and a shortage of local expertise in mineral processing.
While corruption did not rank among the top ten constraints facing Bhutanese businesses generally — access to finance and labour regulations ranked highest — it emerged as a major constraint specific to mining among the 22 mine owners and representatives surveyed, on a par with access to finance and electricity connectivity.
The numbers behind the sector
Bhutan’s modern mining framework dates to the 1970s, following a geological survey conducted in 1962. As of 2015, DGM records showed 48 active mines and quarries — 26 stone quarries and 22 mineral mines — yielding limestone, talc, gypsum, quartzite, granite, marble, dolomite, coal and iron ore, concentrated mainly in western Bhutan: Thimphu, Wangdue, Paro, Samtse and Pemagatshel.
Between 1975 and 2015, 163 mines and quarries were leased out, and 102 have closed since 1995 owing to lease expiry, termination, exhausted reserves, corruption charges or surrender.
SMCL, established in December 2014, now operates six centres: the Habrang-Tshophangma-Majuwa coal mine (2016), a regional sales and logistics office in Phuentsholing (2016), the Khothakpa gypsum mine (2019), the Chunaikhola dolomite mine (2020), the Dzongthung stone quarry, and the Rishore coal mine (2021).
According to the Department of Revenue and Customs, corporate income tax from mining totalled Nu 1.1486 billion in 2023, Nu 1.1003 billion in 2024, and Nu 1.2714 billion in 2025. Non-tax royalty revenue came to Nu 401.76 million in the 2022–23 fiscal year, Nu 513.47 million in 2023–24, and Nu 509.75 million in 2024–25, while rental income from mines fell over the same period, from Nu 152.59 million to Nu 80 million and then to Nu 49.48 million.