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State Mining corp.’s maiden venture to be a coal mine

Groundwork on the Bangtar colliery has been completed and DGM approval awaited

Minerals: Two months after its incorporation, the State Mining Corporation (SMC) is hoping to start a coal mine by end of the year.  But without the mineral policy in place, there is no document defining and identifying strategic minerals.

As per its terms of reference, SMC is required to mine strategic minerals of high value.

However, the SMC’s chief executive officer, Kinzang Norbu said that, currently the SMC was least concerned about the policy, which again is in the domain of the Department of Geology and Mines (DGM).

This, he said, was because the corporation had a host of other issues to be addressed before mining.  For instance, the SMC has only two employees currently doing the groundworks.

As for the mineral development policy, 2013, officials from the ministry said it was still in its draft phase.  DHI officials said it is only when the policy comes through, that a proper guideline for SMC would be pictured.

However, the economic affairs minister said the mineral policy is still under review by international experts. In an earlier interview, he said that the ministry was working to revise the policy.  He said the revised policy would capture all the constraints and regulatory aspects in the mining sector, which currently is plagued by challenges and problems.

Despite this, the SMC has already started with the groundwork on two mines, which were already identified by its parent company, Druk Holding and Investments (DHI).

Geological investigations and mining feasibility study for the Bangtar coal mine have been completed, and the corporation is now awaiting DGM’s approval. Then comes the environmental impact assessment (EIA).

Kinzang Norbu said the corporation has to submit EIA baseline data for two seasons to the National Environment Commission.  This, he said, would require another six months.

As for the dolomite mining at Pugli in Samtse, consultancy for survey and geological investigations would soon be awarded.

The CEO said, by mid-April, the corporate office would be manned and shifted to Samtse.  While the recruitment process is going on, none have applied for the posts of geologists and mining engineers. “We’re re-announcing the posts.”

The general manager, Thukten Choda, said there is a dearth of geologists and mining engineers in the market, and those available were already into consultancy.

Meanwhile, SMC’s target capital, which is a mix of debt and equity portion, is set at Nu 1 billion, DHI’s equity injection is Nu 100 million and Nu 25 million has already been released as paid up capital.

This means that, if financial input need go beyond Nu 100 million, the decision rests with the board whether to inject more equity or to raise capital from other sources, floating shares, for instance.

SMC, as per its terms of reference, is supposed to take up professional mining.  On this, the CEO said each mine would undergo a vigorous study, geologically, environmentally and economically.

But technology, he said, would depend on the nature of mines and deposits available. “SMC is mandated to be an exemplary mining industry and we can’t afford to be complacent,” he said.

By Tshering Dorji

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