Kathmandu: In a significant policy shift aimed at safeguarding national interests, the Government of Nepal has moved to establish a total state monopoly over the extraction of radioactive minerals, specifically uranium and thorium.
Under the newly proposed “Mines and Minerals Bill 2026,” the government classifies these substances as assets of strategic importance and national security, effectively barring the private sector from any involvement in their mining or processing. This legislative overhaul seeks to replace the four-decade-old Mines and Minerals Act of 1985, providing a modernized framework that clarifies the jurisdictions of federal, provincial, and local governments regarding the country’s mineral wealth.
The proposed bill explicitly states in Sections 8 and 32 that the right to conduct mineral activities related to radioactive substances rests solely with the federal government. Such operations must be carried out exclusively through companies fully owned by the state. This strict control is justified by the severe risks radioactive radiation poses to public health and the environment, necessitating rigorous standards for mining, storage, and transportation.
To deter unauthorized activities, the bill introduces harsh penalties, including fines ranging from 500,000 to one million rupees and prison sentences of five to ten years for those involved in illegal radioactive mining. Furthermore, the government reserves the right to declare any mineral as being of “strategic importance” via the Nepal Gazette, thereby restricting its export or use as needed.
Even for state-owned entities, the bill introduces a system of internal checks and balances. Any government company wishing to begin mining must obtain mandatory prior approval from a separate regulatory body governing radioactive substances. This ensures that safety is not compromised by commercial or political pressure. Licensed entities are required to adhere to ten specific conditions, which include implementing leakage prevention measures, employing experts with specialized knowledge in radiation, prioritizing waste management, and providing full insurance guarantees and compensation for potential accidents. Failure to meet these environmental and safety standards could result in the immediate cancellation of mining permits.
The legislation also addresses the longstanding issue of “license squatting,” where middlemen hold mining permits without conducting actual work. By significantly increasing fees and royalties and implementing a policy for the automatic revocation of idle licenses, the government aims to ensure that mineral resources are actively utilized for national development. The bill defines minerals broadly to include metallic and non-metallic substances, precious stones, and radioactive materials found beneath the earth’s surface. It categorizes these into three tiers: precious minerals, important minerals, and general minerals. Precious minerals include high-value assets like gold, platinum, diamonds, and rare earth elements, alongside uranium and thorium.
Jurisdictional clarity is a cornerstone of the new bill. The federal government retains authority over the extraction of strategic minerals and the issuance of licenses for large-scale mines. Provincial governments are tasked with mineral exploration and coordinating mines that span multiple provinces. Meanwhile, local governments are empowered to protect mines within their boundaries and regulate the extraction of common construction materials such as stone, gravel, and sand. The duration of licenses is also tiered based on the mineral’s value and the scale of the mine, with exploration permits lasting between one and three years, and extraction permits ranging from ten years for small mines to thirty years for large-scale operations.
The financial framework of the bill is equally detailed, setting specific application, renewal, and transfer fees based on mineral classification. For instance, a permit for precious minerals requires a higher deposit and renewal fee compared to general minerals. In terms of revenue, the bill proposes a royalty structure where companies must pay fees based on the type and quality of the mineral before export or sale.
Notably, ten percent of the total royalty collected will be allocated to the relevant local government as a “local mineral usage fee,” ensuring that communities directly impacted by mining activities receive a share of the economic benefits. With specific royalty rates set for everything from gold and silver to limestone and industrial clay, the bill represents a comprehensive attempt to regulate Nepal’s extractive industry while prioritizing national security and environmental safety.
Comment Here