Meaning of Mineral Resources

Mineral resources are an important source among natural resources. Minerals are solid, liquid, or gaseous substances with a specific inorganic composition, formed naturally through geological processes. Minerals that can be extracted at low cost and brought into use, such as iron, copper, coal, petroleum products, gas, limestone, magnesite, and slate, are called mineral resources or mineral deposits.

Minerals can be broadly classified into metallic minerals and non-metallic minerals. Metallic minerals can also be classified into ordinary metals and precious metals. Similarly, non-metallic minerals are classified into industrial minerals, chemical minerals, fuel minerals, construction minerals, and gemstones.

Mineral resources represent the type and quantity of all mineral substances available in a country.

In the fiscal year 2023/2024, the contribution of this sector to the total Gross Domestic Product is estimated to be 0.63%. The history of efforts made for mineral extraction in Nepal is not very long.

The Department of Mines and Geology was established in 1967 to make mineral extraction effective. However, the mineral substances present in the geology of the country have not been fully utilized.

Importance of Mineral Resources in Nepal

The development of sectors such as agriculture, industry, transportation, and communication is essential for the economic development of the country. Mineral resources are necessary for the development of these sectors. The importance of mineral resources in Nepal can be explained as follows:

(a) Establishment of Mineral-Based Industries: When adequate quantities of mineral resources are available in the country, various mineral-based industries are established and developed. Cement industry, limestone industry, marble industry, coal industry, slate industry, magnesite industry, etc., currently operating in Nepal are examples of mineral-based industries. The establishment and development of these industries have a positive impact on the overall economy of the country.

(b) Establishment of Other Industries: Mineral resources are also important for the establishment and development of other industries besides mineral-based industries. Some of the raw materials required for manufacturing machinery and tools needed for the establishment of these industries are obtained from metallic and non-metallic minerals. Similarly, fuels such as petroleum, diesel, gas, and coal required to operate industries are also mineral resources. Therefore, it can be said that mineral resources are the foundation of industrial development.

(c) Development of the Agricultural Sector: The modernization of Nepal's agricultural sector is essential for its development. The metallic raw materials are used to manufacture tools required for the modernization of the agricultural sector, such as tractors, threshers, and pump sets, and mineral resources are used for the fuel needed to operate them. Similarly, potassium used to make fertilizers and pyrite used to make chemical fertilizers are also mineral resources.

(d) Development of Infrastructure: Mineral resources are necessary for the development of infrastructure for transportation, communication, and electricity in the country. Various types of metallic minerals are required for the construction of transportation means such as buses, trucks, trains, and airplanes. The fuel required to operate transportation means is also included under mineral resources. Some of the equipment and tools required for communication are also made from mineral resources. Metallic minerals are also used to manufacture large machines used for electricity generation and to make wires required for electricity transmission. Therefore, mineral resources are of great importance for the development of transportation, communication, and electricity.

(e) Creation of Employment Opportunities: From the exploration and extraction of mineral resources present in the earth's crust to processing and sales distribution, thousands of people directly get employment opportunities. In addition to this, the development of mineral resources leads to the development of agriculture, mineral-based and other industries, and infrastructure, thereby indirectly increasing additional employment opportunities.

(f) Reduction of Foreign Dependency: Most of the goods used in Nepal are imported from abroad. If mineral resources can be properly developed in the country, many goods that are imported from abroad, such as iron, petroleum products, and cement, will become available within the country, and there will be no need to depend on other countries for such goods. This will reduce Nepal's foreign dependency.

(g) Increase in Government Revenue: On the one hand, the government directly earns royalties from the extraction of minerals. On the other hand, the extraction and development of mineral resources available in the country lead to the development and expansion of mineral-based and other industries, trade, agriculture, transportation, communication, etc., and an increase in the level of employment in the country. As a result, there is a significant increase in the direct and indirect tax revenue earned by the government.

(h) Source of Foreign Currency Earnings: By developing mineral resources in Nepal, the need for mineral-based goods within the country can be met. By exporting the surplus mineral-based goods after meeting domestic demand, foreign currency can be earned. Nepal can learn from the fact that oil-rich countries are earning huge amounts of foreign currency by exporting petroleum products.

Potential and Current Status of Mineral Resources in Nepal

Nepal is a country filled with mountains. Therefore, it is estimated that various types of mineral resources are present here. In Nepal, the work of studying, researching, and surveying mineral resources is done by the Department of Mines and Geology. Based on studies conducted so far, the potential and current status of mineral resources in Nepal can be mentioned as follows:

(a) Iron: Iron is considered an important basic resource for construction work. The largest iron ore mine in Nepal is estimated to be in the Pulchoki hill in Lalitpur district. The Department of Mines and Geology has found that there are about 10 million tons of iron ore in this area. Similarly, about 10 million tons of iron ore is estimated to be in the Labdi Khola, which falls about 12 miles north of Narayan Ghat, and 4.5 million tons of iron ore is estimated to be in Those in Ramechhap district. In addition to this, iron ore deposits are also estimated to be in some other parts of the country, including Baitadi, Baglung, Surkhet, Pyuthan, and Kulikhani. However, iron has not been extracted and used commercially from any place in Nepal.

(b) Copper: Copper deposits are estimated to be in various places in Nepal. Copper is also estimated to be found in Bhutkhola in Bandipur, Rukum, Dhading, Khotang, Nangre in Sagarmatha, Arkhale in Makwanpur, and Baisakhani in Baglung. However, copper has not been produced from any mine in Nepal from a commercial perspective.

(c) Mica: Mica is also a mineral resource. It is especially used in electricity-related work. It is used in making insulators for electricity, telegraphs, and various decorative items. Mica deposits are estimated to be in various places in Nepal, such as Dhading, Bhojpur, Chainpur, Sindhuli, Baglung, Doti, Gosaikunda, Sundarijal, and various parts of Achham. However, its commercial use has not started.

(d) Coal: Coal is also one of the various sources of fuel. It is considered an important fuel source after electricity. It can be used to run trains, brick kilns, and various factories, for cooking food, and for heating. Coal deposits are estimated to be in various parts of Nepal, such as Kathmandu Valley, Dang, Salyan, Thakukhola, Kailali, Kanchanpur, Baglung, Chitwan, and the Barah region of Sunsari district.

(e) Limestone: Limestone is mainly used for cement production. Industries established in various places in Nepal using limestone, such as Hetauda Cement Industry, Udayapur Cement Industry, Maruti Cement Industry, Arghakhanchi Cement Industry, etc., have significantly reduced the import of cement from abroad.

(f) Slate: Slate is extracted from slate mines formed from sedimentary rocks. Therefore, it is found in the hilly region. Bandipur in Nepal is famous for its slate. The slate from here is considered more suitable from a commercial perspective. Its deposits have been found in Dolakha, Baglung, and Trishuli besides Bandipur. It is an important mineral resource. In Nepal, it is mainly used for roofing houses and paving roads.

(g) Petroleum and Natural Gas: Petroleum and natural gas are very important mineral resources. Nepal spends billions of rupees annually on the import of petroleum and gas. Although such mineral resources have been found in many places in Nepal, their extraction has not been done commercially from any place. Deposits of such mineral resources are estimated to be in Kathmandu Valley, Muktinath in Mustang, Padukasthan in Dailekh, and some places in Dang district.

(h) Gold: Gold is one of the most expensive metals. Adequate evidence of gold deposits in Nepal has not been found. However, since some gold particles have been found in the sand of some rivers in the country, such as the Budhi Gandaki, Kali Gandaki, and Sunkoshi rivers, it is estimated that there may be gold deposits in these places in Nepal. Based on a study conducted by the Department of Mines and Geology, gold is also estimated to be found in Baglung, Mustang, and Chauri Khola.

(i) Magnesite: Magnesite is found in large quantities in various parts of Nepal. A large deposit of this mineral has been found in Kharidhunga in Dolakha district. Some quantities of magnesite have also been extracted from this mine and exported to India. Magnesite has also been found in some areas of Sunkoshi and Sapta Koshi.

(j) Zinc: Zinc is mainly used in making steel and various other metals. Zinc deposits are estimated to be in places like Tamghas in Gulmi, Bhole in Kathmandu, and Khola Khani in Dhading. Since it is used in the work of smelting other metals, it also falls under very expensive metals. However, a detailed study has not been conducted about this metal in Nepal.