Can the Nepalese mining sector dig itself out of trouble?

While we’ve forever been taught the importance of forests and on land natural resources, through school instilled slogans such as “Hariyo Ban Nepal ko Dhan", the natural resources that lie below our rather rich soil have always found themselves as a footnote to natural resource utilisation plans. The lack of importance or attention shown to these very resources, in their development, their research and their sustainable extraction is well evident in the rather narrow mandate the Department of Mines and Geology of Nepal operates under.

 Severely understaffed and shunned, the Department of Mines & Geology(DoMG) sits on the precipice of possibly launching long-term projects that could see the department become economically self-sustainable and Nepal self-sustaining in the production of many important resources in the roadmap to development.

                         The resources that we have in Nepal, the potential to various minerals and ores, the tenders that we’ve given to mine the ones that we can; we can create a sustainable economy and gain independence from importing vital minerals from other countries by producing enough and possible surplus minerals form our very own mines if there were to be a proper plan.” says the Spokesperson and Senior Geologist at the DoMG, Narayan Banskota.

Currently in order to mine any resource from any place in the country, the DoMG first discovers and pinpoints the potential sites of the resources. They then begin to conduct research through drilling, sample surveys and many more processes in order to come up with a conclusive answer as to whether that particular location is naturally a high-yield mineral dig site and also if it would be feasible to mine in such an area to the economy of the nation and the company. Once they’ve performed these checks they then put these potential mining sites up for tender for private investors to take up and begin mining and profiting from the area, levying a minor tax on all sales made from the mine resources. This is done in the form of mining licenses distributed to the private companies, while the department also gives out investigation licenses to discover these areas of potential mining to suitors.

“The crux of the problem we face today lies in the fact that to extract these vital resources we require companies to bid in tenders and look to acquire these mining licenses. To assure tech companies take up these mining opportunities we need to conduct our surveys and run tests to prove these are high yield locations, however we aren't able to do that at the pace we desire. Currently a report request submitted to our labs could take up to a year to come back due to the severe lack of manpower that we suffer from.” stresses Banskota.

To understand the need of these preliminary reports and investigation of yield, one must simply understand base level economics and be privy to a rather damning stats. Any potential mining site, upon drilling surveys only has a 10 percent chance that the site would return any yield to write home about. That means if the DoMG is unable to conduct these surveys and research due to a lack of resources and more crucially a lack of manpower, the investors that would be bidding for these mining rights would be doing so with a 90 percent chance of failure , a 90 percent chance of something they paid huge money for not even being there in the first place; a bet private companies would simply not make.

The potential to mine minerals such as Dolemite, Limestone, White Marbles and even Uranium is huge in Nepal to the point of self sustainability but a lack of security to potential investors is the reason Nepal lags behind in the Mining resources sector. Every year the DoMG sets out 30-35 potential sites to survey yet barely manage to complete even a handful of them up as viable investment opportunities, all due to a lack of manpower to conduct these vital surveys.

“When we call for the government to help us out and not shun us, it's not a plea for money, just recently we gave up around Rs 140 million of our biggest back to the government since we had no sector or manpower to spend it on. We have the plans and projects that are ready to go, but there simply aren't people. When we ask for governmental support, it is a plea for a more comprehensive plan that encapsulates the manpower aspect, the license aspect and many more to bring forth this sleeping giant in our economy” Banskota affirms.

Currently even on a more collegiate level, there is no proper, well-facilitated department in the national courses to produce the required geologists of the future. When asked how the government could set forth such a plan in motion, the simple answer the DoMG gave was to incentivize the geologist job. To make the geologist job lucrative enough through quotas or perks in order to attract the youth of our nation to fill these vital positions to bring forth economical independence one stone at a time.