Mines & Minerals Act, 2042

Arjun Baral 04
ABSTRACT:
Mines and minerals are the valuable resources for economic development of nation.
Extraction and utilization of these resources is important as well challenges for the developing
country like Nepal. In order to develop mine and minerals deposit, His Majesty King Birendra Bir
Bikram Shah Dev enacted the Act ‘खानी तथा खननज पदाथथ ऐन, २०४२’. Mines & Minerals Act, 2042 provide
guidelines for the mining operation, classification of mining, and environment impact reduction
criteria.

Table of content
1. BACKGROUND & INTRODUCTION: ......................................................................... 1
2. REVIEW ON “MINE AND MINERALS ACT, 2042” ................................................... 1
3. CRITICAL ANALYSIS ................................................................................................... 3
a. APPRECIATION ............................................................................................................. 3
b. CRITIQUE.................................................................................................................... 4
4. SUGGESTION ................................................................................................................. 4
5. CONCLUSION ................................................................................................................ 5
6. REFERENCES ................................................................................................................. 5

1. BACKGROUND & INTRODUCTION:

In order to maintain convenience and economic welfare of the public-in-general and for
rapid economic development of the country, it is expedient to develop mines and minerals deposit
existing in the country. Nepal is a country with enormous source of minerals. There are 63 different
types of minerals found in Nepal. To control, guide and develop the mining operation and other
factor related to mining and minerals extraction, ‘Mines & Minerals Act, 2042’ was introduced in
Nepal.
The main objective of Mines and Minerals Act, 2042 is to develop mine and extraction of
existing minerals effectively for development of country and society. It provide clear guidelines
necessary for improving mining operation for economic development of country ensuring no
adverse impact on society and environment. This act consist of matters concerning to mine and
mining.

2. REVIEW ON “MINE AND MINERALS ACT, 2042”

In Nepal, Mine & Minerals Act, 2042 was passed during the rule of king Birendra, on 2042-
07-14 (October 30, 1985) on the advice and with consent of Rastriya Panchayat. This act was
amended two times. First amendment Mines and Minerals (First Amendment) Act, 2050 on
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2051/2/5, and 2nd amendment is done on 2066 after Nepal become republic. This act consist of 29
section.
Mine and Minerals Act, 2042 provide complete guideline for matters concerning mine and
mining operation. Definition of significant terms are given in section 2. According to section 3 all
minerals found in any land shall be the property of government of Nepal. Section 3(A) classify the
minerals into different categories. It is divided into 2 group by 1st amendment of law (a) on the
basic of nature of minerals and (b) on the basic of importance of minerals.
Power to carry out the mining operation is given to government of Nepal by section 4. Nepal
government is given full authority to (1) carry out mining operation, (2) may undertake mining
operation by itself and (3) to be partner in mining operation by investing. License for mining
operation is stated in section 5, it include act and rule for a person or organization to undertake
mining operation. This section provide complete process to acquire mining license. Section 6 sate
the right to overtake excavation. Person has right to excavate only minerals whose license they
acquire. Renewal of license, size and area of mining field, period of prospecting operation and
period of excavation rule is given in section 7, section 8, section 9 and section 10 respectively.
Person shall undertake mining operation within prescribed time and should follow the procedure
and process as provided by license (section 11).
Section 11(A) no significant adverse effect shall be caused on environment while undertaking
mining operation: - this section state that any person or organization undertaking mining operation
shall not cause adverse effect on environment and they should adopt protective measure as
prescribed on environment protection(1). Department of mines and geology of government of
Nepal can issue the necessary directives to the concern person for correction of operation that
cause significant adverse effect on environment (2). Government of Nepal can take necessary
action to the person undertaking mining operation for causing adverse effect to environment.
Department can declare special area like national security, public interest or historical
importance as prohibited for mining (section 12). Section 12 also state that department can
undertake mining operation or give permission to other for the minerals other then issued on
license and government can make separate arrangement for other minerals like soil, boulders and
sand. According to section 13 department can issue necessary order to prevent damage to any
installation and soil erosion. As per section 14, government of Nepal, may view to ensure minerals
supply meets internal demand before exporting to other country. Person can export minerals that
is included in his/her license to foreign country except the circumstance under sub section (1), i.e.
supply should meet internal demand. Section 15, 16, 17, 18 and 19 explain rule and facility
regarding the power to keep weapon for security, power to keep communication equipment,
facilities for concessions and different charges and fee for local development respectively.
Licensee should submit report to the respective department as prescribed.
Section 21(acquisition of land or entry into land) any land other than area prohibited by
section 12, sub-section (1), can be acquired by the government permanently or temporarily. In
order to conduct mining operation, installation of machinery, tools is needed in operation can be
done entering into such land. During this process any harm or damage to the property, land or other
structure, compensation shall be paid as per market rate and rate determined by respective
committee or municipality. Licensee may import, store and transport explosive as per directed by
government of Nepal time by time.
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Department may authorize expert, authority or agency to inspect the mining operation site or
proposed site as per section 23, sub-section 1. Expert or authority determined by sub-section 1
shall be permit to enter the mining area without any obstruction for inspection and should make
document available upon demanded by them. In order to develop mining and mineral Nepal
government can extend cooperation, development center and may launch minerals promotion
programmer as per section 24. Function and duties, power and working of such cooperation under
sub-section (2).
Section 25 (penalties) if person undertake mining operation without obtaining license as per
sub section (1), such mining is stopped and all the machinery equipment, instrument and goods
are seized and fined and recovered compensation for damage caused by their operation. If the
licensee perform the operation against section 11(A) and section 13 i.e. cause impact on
environment and other damages like soil erosion or damage minerals deposit, as per sub-section 2
their license may be revoked and fined. Licensee should provide information and report as per
section 20, if they fail to do so they may be suspended for mining. Licensee are given opportunity
to defense before taking action pursuant as per sub-section (1), (2), (3), (4). As per sub-section 6,
if any other person cause problem or obstruct the mining operation is liable to punishment and
fined not exceeding ten thousand rupee or with imprisonment not exceeding 6 months. Any person
who is not satisfied with above sub-section, 1, 2,3,4,6 may file appeal to court within 35 days from
such punishment. If government of Nepal and license fail to resolve any dispute to mining
operation, section 26 stated that it may resolve by mutual discussion between two parties through
arbitration.

3. CRITICAL ANALYSIS
a. APPRECIATION
Formulation and implementation of Mines and Minerals Act is done in any nation with the
objective of effective exploration of geological minerals for benefit of nation. Formation of these
kind of act helps in Systematic exploration of mineral deposits, Development and conservation of
minerals, Encourage value addition of minerals through promotion of mineral based industries,
Ensure scientific mining, safety & welfare measures, protect environment and Collection of
royalty to generate revenue. Mines & Minerals act, 2042 was also formulated to fulfill these
objective. It can be taken as important steps towards development of existing mines and minerals
deposit and utilization of such resources for the benefit of the nation. Mine & Minerals Law, 2042
can be consider as initiation of positive changes towards utilization of resources present in country.
It has covered wide ranges criteria for the mining and the matter concerning mining operation.
This act give full ownership to the existing minerals deposit to the government of Nepal. This
helps in organized extraction and solve dispute over ownership of minerals. Giving ownership and
full control of mining and operation related with mining to government of Nepal control
unmanaged extraction, excavation, and smuggling of these resources. Only person having license
provided by government can carry out mining operation and mining can be done to only specific
minerals stated in license. This helps in control in over extraction of minerals, illegal extraction
and smuggling and exploitation of precious minerals.
During mining and minerals extraction process many people lose their land and property. This
act guarantee the compensation for any damage to land or property during mining operation. This
could help to rehabilitation of the person or society affected by these operation.
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Another appreciable part of this act is, it clearly mention licensee should not cause any
significant impact on environment by any means. Causing environmental damage, damage to
minerals deposit, extend of extraction and any cause like soil erasing may revoke license.
Size and area of mining, period of excavation, extend of excavation, types of minerals to be
extracted is governed by the license provided according to this act. Which helps in protection and
preservation of minerals deposit. Section 14 strictly prohibited on exporting minerals and resources
unless internal demand is fulfilled. This encourage people investing on minerals based industry,
and this act give priority on development of nation by utilization of available resources.

b. CRITIQUE
Mine & minerals Act was formulated with the aim to solve every problem and dispute arise
during operation related with mining. Although this Act was passed in order to resolve every
dispute and challenged arise during mining related operation, it fails in some extend. Effectiveness
of act(s) is sometime affected by various aspects. Taking advantage of weak section of act, unable
to cover every aspect of operation, misuse of act etc. are major drawback and challenged for
implementation of act. This act was amended several times in order to remove weak point and
increase efficiency of act still there is some shortcoming.
Mine and minerals act, 2042 define the size, period of operation, and extend of extraction of
minerals. These factor are not found to be implemented by licensee. Showing different obstruction
like political issue, dispute between local bodies of land owners, they are extending period of
operation and use it as advantage for over extraction of minerals. This act fail to control these kind
of activities.
According to section 3 land underlying minerals will be the property of Nepal government and
government can take ownership of these land by themselves and provide compensation to the
people affected. But the compensation amount provided by government could not resettle these
people or community. Due to mining activities and extraction of minerals many people are
becoming homeless.
There is no strong act regarding management of by-product produced from the mining such as
soil matter, boulders, sand, etc. They are either being disposed without proper measure or are being
used for other purpose such as for construction work, or smuggled illegally. This act fail to control
or manage these problem.
Section 11(A) stated that mining or minerals extraction should not cause any significant impact
on environment, and size and area of mining field is fixed in license as per section 8. But in case
of river sand extraction is found to be carried out against these both act. Sand are being over
excavated and extracted in large area in many river. Still there is not taken any action against them.

4. SUGGESTION

Due to some drawback in this this act need some correction. Some of them are: - There should
be clear provision for resettlement or rehabilitation of people who lose their home and property.
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There should be clear provision on management of by-product of mining such as soil, rock or
sand. New rule should be bought regarding extraction of sand and aggregate from river.

5. CONCLUSION

Mine & minerals act, 2042 can be taken as important effort for the utilization of available
resources for economic development of country. This act provide clear guideline for the matter
concerning with mining. We can see this act was formulated considering social-economical aspect,
national security, environment protection, improvement of minerals base industries and set of rule
for utilization and preservation minerals available in country. Although It tries to solve wide ranges
of possible problem that may arise during mining operation, still it have some drawback in some
aspect. So it needed to be corrected.

6. REFERENCES

1. Mines & Minerals Act, 2042 (1985) – Nepal Law Commission.

2. Mineral Resources of Nepal and their present status – Nepal Geological Society
(ngs.org.np)
3. Mines and Minerals Rules, 2056 (1999) – Nepal Law Commission
4. https://ibn.gov.np/wp-content/uploads/2020/04/Mines-Minerals-Sector-Profile
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