News
New rules for mining, but room for abuse
The Government has introduced regulations to govern the mining, trading in and export of minerals, including graphite, but has omitted exploration.
It has also introduced a committee to determine the market value of mine output and the percentage of royalty payable by those seeking such licences. The changes, which were gazetted on Thursday, replace certain sections of the earlier Mining (Licensing)Regulations promulgated in November 1993.
The new regulations state that any private sector proponent or participant before obtaining a licence for mining, trading in or exporting minerals must have special negotiations in the form of an Investment Agreement with the Secretary to the Ministry of Environment and Renewable Energy with regard to the terms and the supplementary rights and obligations under such agreement.
The regulations have named four categories of minerals. The first consists of industrial minerals ilmenite, zircon, rutile, graphite, mica, quartz, garnet and apatite. The second consists of base metals iron, nickel, chromium, copper, lead and zinc. The third consists of precious metals gold, silver and platinum. And the last consists of exported dimentioned stone. Mining experts pointed out, however, that by deliberately excluding from the regulations those seeking mineral exploration licences, the Government has left room for continued abuse.
“The amendment has omitted exploration, thus regularising the issue of exploration licences to local companies that have or are going to transfer these licences to foreign companies for millions of dollars,” said Dulip Jayawardena, a former director of the Geological Survey and Mines Bureau (GSMB). “When the phosphate project was negotiated, the Mineral Investment Agreement included exploration. It is suggested that another amendment be issued including exploration.”
The new regulations also state that the Ministry Secretary may, in consultation with the GSMB, determine the market value of mine output and percentage of royalty payable, among other things, within the framework of the Investment Agreement.
The GSMB shall give its recommendations on these to the Secretary through a committee. It will comprise the Secretary to the Ministry of Finance, the Secretary to the Ministry of Environment and Renewable Energy, the Secretary to the Ministry of Industries, the GSMB Chairman and the Director General, and three Senior Executive Officers of the Bureau with a minimum 15 years of practical experience in geological survey, excavation engineering and registration of title of minerals.