SARBHANG

29 August, 2009 - Oil in the Bangtar area under Samdrupjongkhar dzongkhag, copper, gold and silver in the black mountain area of central Bhutan and tungsten in Sarpang are the potential minerals an American businessman J Matthew Fifield has offered to prospect for and, if found viable, then extract them.

He has also proposed that he be given mineral exploration rights for the whole of Bhutan, after which he would get a group of American investors to invest in Bhutan's mining sector in a big way.

J Matthew Fifield is a managing director in an international mining company Clien and also sits on the boards of other international energy companies.

The department of geology and mines (DGM) under the ministry of economic affairs and Druk holdings investment (DHI) have so far expressed interest in the proposal and are in the process of studying it.

"J Matthew Fifield approached us through DHI around five months ago, saying that he was interested in the mineral exploration and extraction and so we provided him with all past mineral exploration reports and geological data on Bhutan," said DGM's chief geologist and acting director general.

After going through the data, Fifield contacted DGM and DHI a month later in July, expressing interest.

DHI CEO Karma Yonten said, " We're very interested in exploring and developing the country's mineral resources in partnership with foreign companies because DGM, DHI and the government overall doesn't have the resources and technical capacity to do so."

"What's crucial now what the updated Mines and Mineral Management Act says on such ventures, after which we can then negotiate and discuss with the company on the details," he added.

"We're studying the international best practice and benchmarks on these kinds of projects because we want to avoid examples of countries in Africa, where their minerals have been exploited by big multi national companies," said DHI senior analyst Kinzang.

Sources say that DHI is more interested in offering sections of areas for minerals development, instead of rights to the whole country.

The last time mineral exploration was done in Bhutan was from the early 1970's up to the 1990's by the geological survey of India. However, this only covered 33 percent of the country and was not done in great detail.

"The GSI and DGM study in Bangtar during the 90's show potential for oil since all the elements and geographical features are present like organic source rock for potential oil, sandstone to trap the oil naturally and cap rock on top to seal the oil in, " said Ugyen Wangdi.

He said that, before drilling could start to check for oil in them, it had to be abandoned like many other mineral exploration projects in the south due to the deterioration of the security situation.

The GSI had also done studies at the foot of the black mountain area and found small deposits of copper, along with traces of gold and silver.

"However, the search never really made it to black mountains due to GSI running short of budget from high exploration costs and difficulty in accessing the area, " said Ugyen Wangdi.

However GSI and DGM came across confirmed reserves of more than half a million tonnes of tungsten in Burkhola and Dhopnai under Sarpang dzongkhag.

"The market value of the total deposit today is around Nu 50-60 billion," said Ugyen Wangdi. He said, however, that the cost of exploration and extraction was very high and risky and required a very high level of technology not available in the region.

If an agreement is reached, then the exploring company is given the mining rights and the government gets mining shares and royalty. "Under responsible social mining, shares are also given to the local people," said Ugyen Wangda.

The draft FDI and draft economic development policy allows and encourages mineral exploration.

By Tenzing Lamsang

source: Kuensel