Mines and Minerals Management Regulations, 2022

1. This Regulation shall be called the Mines and Minerals Management Regulations 2022. Commencement

2. This Regulation shall come into force on the 14th Day of January, 2022. Repeal

3. The Mines and Minerals Management Regulations 2002 along with its subsequent amendments made through Notifications and Circulars is hereby repealed. Definitions

4. The following definitions shall apply to this Regulation: 4.1 “Blaster” means a shot firer certified by Ministry of Home and Cultural Affairs under section 68 of the Explosive Rules, 1989 or any person holding a blaster or shot firer's certificate from recognised institutes but endorsed by the Ministry of Home and Cultural Affairs on recommendation by the Department of Geology and Mines. 4.2 “Captive mine” means a mine leased to the owner or promoter of a processing industry for the sole purpose of supplying raw materials to that industry or a mine leased to supply critical additives for multiple domestic industries. Page 1 of 89 Mines and Minerals Management Regulations 2022 4.3 “Company” means any organization registered under the Companies Act of Bhutan. 4.4 “Competent person” means any person who has the qualifications for a specified responsibility as defined in this Regulation or who possess other documents issued or approved by the Royal Government of Bhutan. 4.5 “Critical additives” means those essential minerals other than primary raw materials necessary for processing industries but not in large quantities. 4.6 “Department” means the Department of Geology and Mines, Ministry of Economic Affairs, Royal Government of Bhutan. 4.7 “Director” means the Head of the Department of Geology and Mines. 4.8 “EA Act” means the Environmental Assessment Act. 4.9 “Employed” means any person who is paid by the lessee to carry out activities in connection with the mine. 4.10 “Environment” means the complex web of interrelationships between the abiotic and biotic components which sustains life on earth, including the social, health and cultural aspects of human beings. 4.11 “Environmental Management Plan (EMP)” means a plan that specifies the environmental, health and safety terms for the design, construction, and operation of a mine under section 24 of the MMMA. 4.12 “Environmental Restoration Bond (ERB)” means bond deposited by the lessee in an account designated by the Department as a security to ensure post mining reclamation of the mine. Page 2 of 89 Mines and Minerals Management Regulations 2022 4.13 “Final Mine Feasibility Study (FMFS) means the mining assessment report for the operation of a mine highlighting the technical, financial, environmental and social parameters which demonstrates, in a reasonable manner, the socio-economic viability of the proposed mine. 4.14 “Foreman” means the competent person employed and appointed in writing by the lessee to supervise or control activities in a mine or a part thereof 4.15 “Government” means the Royal Government of Bhutan or any government agency authorized by it to carry out a specific activity on behalf of the Royal Government of Bhutan. 4.16 “Lessee” shall mean a Bhutanese citizen as an individual or a proprietor of a licensed firm or a company who has been granted a mining lease. 4.17 “Manager” means the competent person employed and appointed in writing by the lessee to manage all the operations of the mine under section 36 of the MMMA. 4.18 “Mine official” means any person employed and appointed in writing by the lessee to carry out specific duties related to compliance of the terms of the lease. 4.19 “Mine Plan (MP)” means a detailed description of the mine and proposed mining works to optimize return on investment, through capital investment, design, extraction scheduling, and preparation of the mineral product in accordance with the mineral specification. 4.20 “Mine Restoration Plan (MRP)” means a detailed description of the environmental, health and safety terms for the closure of a mine or its part, the termination of related activities, and the Page 3 of 89 Mines and Minerals Management Regulations 2022 restoration of the natural environment at the site of the mine and surrounding area and it shall form a part of the FMFS under section 23 of the MMMA. 4.21 “Mines Inspector” means a person employed by the Department to monitor mineral transport and mining operation and issue transport permits. 4.22 “Mining Division” means the Mining Division of the Department of Geology and Mines. 4.23 "Minister" shall be the Head of the Ministry of Economic Affairs under section 4(f) of the MMMA. 4.24 “Misfire” means the failure to explode of an entire charge of explosives in a shot hole. 4.25 “MMMA” means the Mines and Minerals Management Act, 1995. 4.26 “National Inspector” means an officer of the Department who is authorized in writing by the Director to inspect all mines under the MMMA. 4.27 “Officer” means an officer of the Mining Division authorized in writing by the Minister or Director to exercise powers conferred by the MMMA. 4.28 “Operational mining scheme” means a periodically updated description of how the EMP, MP and MRP will be implemented in practice. 4.29 “Proven mineral reserve” means those mineral deposits assessed to be economically feasible for mining by the Department, Geological Survey of India (Bhutan Unit) and on Royal Government of Bhutan funding. Page 4 of 89 Mines and Minerals Management Regulations 2022 4.30 “Public road” means road under the jurisdiction of the Government for public use. 4.31 “Regional Inspector” means an officer of the Mining Division who is authorized to inspect and control mines in a region. 4.32 “Registry” means the Registry of Mineral Titles, Department of Geology and Mines. 4.33 “Serious bodily injury” means any injury which involves, or in all probability will involve, the permanent loss of any part or section of a body or the use of any part or section of a body, or the permanent loss of or injury to the sight or hearing or any permanent physical incapacity or the fracture of any bone or one or more joints or bones of any phalanges of hand or foot. 4.34 “Site” means the mining area for which a mining lease has been granted under the MMMA. 4.35 “Working place” means the place on the site where an activity connected with the mine is carried out by or on behalf of the lessee. Chapter 2. Boundaries

5. The Department determines the boundaries of the mining area for leasing under section 18 of the MMMA.

6. All boundaries extend downward, vertically without limit.

7. All boundaries are demarcated by the official demarcation surveys. Chapter 3. Registry of Mineral Titles

8. The Registry of Mineral Titles is established within the Department to maintain accurate registers, maps, and technical and financial records of mining leases under section 14(vii) of the MMMA. Page 5 of 89 Mines and Minerals Management Regulations 2022

9. The Registry of Mineral Titles shall collect and maintain the documents listed in Annex 3 of this Regulations. Chapter 4. Mapping and Exploration

10. The Department shall carryout: (1) geological mapping at regional scale as primary source of information on geology for mineral development, land planning, environment management, seismic risks and geohazards prevention and infrastructural development; (2) mineral resources mapping to establish national mineral resources database; or (3) exploration of minerals of geological potential either on its own or outsource.

11. Notwithstanding section 10(3) of this Regulations, the Department shall issue Exploration Permit for: (1) eligible minerals to process as captive mine to a Bhutanese citizen, proprietor of licensed firm or company; (2) leased minerals as an additional deposit to state-owned mining agency; or (3) any other minerals to state-owned mining agency as decided by the Ministry.

12. The Ministry shall notify the list of eligible minerals and requirement of value addition under Annex 7 of this Regulations.

13. A proponent of the Exploration Permit shall be required to seek a written consent from the private registered landowner or any person in custody of such land. Page 6 of 89 Mines and Minerals Management Regulations 2022

14. A proponent shall furnish the Forestry Clearances, Environment Clearances, clearances for use of aerial or unmanned aerial vehicle from the relevant authorities for issuance of Exploration Permit.

15. The Department shall undertake mapping and exploration activities with intimation to the relevant agencies.

16. The Department shall issue Exploration Permit in accordance with section 11 of this Regulations upon obtaining all the required sectoral clearances.

17. The Exploration Permit holder shall pay fair compensation to the land and property owner if any damages are caused during exploration.

18. The Exploration Permit holder shall not have rights over the explored minerals or claim compensation thereof, if the deposit is assessed to be techno-economically not feasible for establishment of an industry.

19. The Department may issue the Mineral Exploration Guidelines in respect of processing the application for Exploration Permit and Code of Exploration Practices. Chapter 5. Mining lease and Quarrying lease

20. The grant of mining and quarrying lease shall be only in accordance with section 21 of the MMMA.

21. The mining and quarrying lease shall be applicable to all excavations including winning rocks and minerals, digging and dredging below the riverbeds.

22. A Bhutanese citizen as an individual or a proprietor of a licensed firm, or a household, or a company shall not be eligible to obtain or operate more than two mining or quarrying leases at any point of time. Page 7 of 89 Mines and Minerals Management Regulations 2022

23. Notwithstanding section 22 of this Regulations, the limitation of two mining or quarrying leases shall not apply to the state-owned mining agency. Mining lease

24. A company shall be eligible to obtain a mining lease for captive mine to supply raw materials to their processing industry.

25. A Bhutanese citizen as an individual or a proprietor of a licensed firm shall be eligible to obtain a mining lease for a captive mine to supply critical additives to multiple industries.

26. Notwithstanding section 25 of this Regulations, a Bhutanese citizen as an individual or a proprietor of a licensed firm shall not be eligible to obtain a mining lease where minerals are leased to state owned mining agency.

27. The Ministry shall allocate proven mineral reserve: (1) directly to state-owned mining agency; or (2) directly to a Bhutanese citizen as an individual or a proprietor of a licensed firm, or a company for the purposes as stated in section 29 of this Regulations.

28. Direct allocation of proven mineral reserve to state owned mining agency shall be based on: (1) wider economic benefits; (2) high potential for export in primary form; (3) potential for generating substantial revenue; (4) reliable and affordable supply of minerals and mineral products in the country; or (5) sustainable development of mineral resources. Page 8 of 89 Mines and Minerals Management Regulations 2022

29. Direct allocation of proven mineral reserve to a Bhutanese citizen as an individual or a proprietor of a licensed firm, or a company shall be based on: (1) supply of raw materials for the establishment of a domestic processing industry; or (2) supply of critical additives to domestic industries.

30. The Department shall lease mineral deposit explored by the Exploration Permit holder as captive mine based on techno-economic feasibility for the establishment of an industry.

31. The Department shall lease only one captive mine for a single mineral to a mineral based industry.

32. Notwithstanding section 31 of this Regulations, the Department may lease additional captive mines for the same mineral if the sustenance of the industry is at stake. Quarrying lease

33. A Bhutanese citizen as an individual or a proprietor of a licensed firm, or a company shall be eligible to obtain a quarrying lease.

34. The Department on receipt of the application shall process and lease stone quarries to a Bhutanese citizen as an individual or a proprietor of a licensed firm, or a company.

35. The Department shall issue permit for short term quarries to government agencies, projects or organizations in accordance with the Guidelines for Short Term Quarries. Application for grant of mining lease

36. An application for grant of a mining lease shall be submitted in Form A of Annex 1 of this Regulations to the Department. Page 9 of 89 Mines and Minerals Management Regulations 2022

37. Upon receipt of the applications, the Department shall communicate to the applicants in writing stating the decision on acceptance or rejection of the application within the time limit specified in Annex 6 of this Regulations. Scrutiny of application

38. After acceptance of the applications, the Department shall convene a technical committee meeting to assess and scrutinize: (1) the applicant's capability as per section 21 of the MMMA; (2) that the applicant has operated the earlier leases satisfactorily; (3) the type of mineral required for the applicant’s proposed operation; (4) the annual requirement of material; (5) the potential size and extent of the deposit; (6) the possibility of carrying out the proposed mining works with respect to the location, topographical conditions and behavior of the deposit; and (7) the fulfillment of other requirements as per the Form A of Annex 1 of this Regulations.

39. The Department shall then consult with the concerned agencies and seek necessary clearances for issuance of mining lease.

40. After obtaining necessary clearances, the Department shall communicate to the applicant to carry out Detailed Geological Study and Final Mine Feasibility Study (FMFS) of the proposed mine or quarry. Page 10 of 89 Mines and Minerals Management Regulations 2022 Final Mine Feasibility Study

41. The applicant shall carry out the FMFS in accordance with the guidelines given in Annex 2 of this Regulations and submit the report to the Department.

42. The Department shall convene a meeting where the applicant shall present the FMFS report in detail for the purpose of scrutiny and approval.

43. The applicant shall revise the FMFS after its presentation and submit it to the Department for approval.

44. Upon approval, one copy of the FMFS report shall be returned to the applicant with seal and signature of the authorized officer. Environmental Clearance

45. The applicant shall submit an application for issue of environmental clearance along with the Environmental Impact Assessment and FMFS report in case of new proposals and six months before the expiry of earlier environmental clearance in case of an operating mine.

46. The Department shall forward the application to the Secretariat of the National Environment Commission for review and issue of the Environmental Clearance. Grant of mining lease

47. Upon receipt of all clearances required by law from concerned authorities of the Government under section 19 of the MMMA, and upon determining that the applicant satisfies the conditions in section 21 of the MMMA, the Department shall communicate it to the applicant in writing and shall state the basis for the decision.

48. The grant of mining lease is confirmed upon signing of lease agreement in Form B of Annex 1 of this Regulations. The format Page 11 of 89 Mines and Minerals Management Regulations 2022 provided in Form B of Annex 1 of this Regulations may be amended as may be necessary with the approval of the Minister.

49. The term of initial lease or renewal shall not exceed: (1) expected economic life of a mine; or (2) a maximum period of 15 years or whichever is less. Modification of the application documents

50. An applicant who intends to make a material change to the mining activity shall submit a written request to the Department to take into account the intended change.

51. Within the time limit specified in Annex 6 of this Regulations for response to a request under section 50 of this Regulations to amend an application, the Director shall: (1) if the change is acceptable, issue an order in writing to the applicant allowing the modifications; or (2) if the change is not acceptable, issue an order in writing to the applicant refusing to allow the modifications. Lapse of the lease

52. When a lessee has not commenced mining operation within a period of two years from the date of grant of the lease or discontinues mining operation for a period exceeding two years, the lease shall lapse automatically.

53. The Ministry, upon written application by the lessee, may determine that the non-commencement or discontinuance was due to reasons beyond the control of the lessee, may revive the lease and modify the terms and conditions. Page 12 of 89 Mines and Minerals Management Regulations 2022 Renewal of lease

54. An application for renewal of a lease shall be made to the Department at least one year before expiry of the existing lease in Form F of Annex 1 of this Regulations. A mining lease for the operation of the captive mine will be renewed depending on the availability of mineral reserve and compliance to the Regulations.

55. The Department shall take the average of half yearly and annual performance ratings carried out in Form H(i) and H(ii) of this Regulations.

56. The Lessee shall be not eligible for renewal of the mining lease if the score is below average.

57. If the Department refuses to issue or renew a mining lease for the whole or part of the area applied for, the Department shall inform the applicant in writing within one week of taking the decision and state the basis for the decision. Suspension, termination, modification by the Government

58. If mining works are not carried out in compliance with the lease agreement and the approved FMFS or the updated and approved FMFS, the National Inspector or Regional Inspector may order the lessee to suspend all or part of the mining operation until compliance with the terms of the lease is restored.

59. In case of serious and imminent threat to human health or the environment caused by noncompliance with the lease agreement and the FMFS, the suspension order may be delivered orally on the site by the National Inspector or Regional Inspector, and shall take effect immediately. Within one week, the Director shall issue an order in writing, stating the noncompliance with the lease and the actions that Page 13 of 89 Mines and Minerals Management Regulations 2022 shall be taken to restore compliance, and giving a time limit for the actions to be taken.

60. The Department shall inform the lessee in writing, at least three months in advance, of its intent to modify or terminate the lease for the reasons set out in section 32 of the MMMA.

61. The Department shall suspend, terminate or modify the mining lease upon receipt of the information of the suspension, termination or modification of any clearance required for the operation of a mining lease by an agency, and shall immediately inform the lessee in writing, stating the basis of the decision. Disqualification for grant of a mining lease

62. A Bhutanese citizen, proprietor of a licensed firm or a company shall be disqualified to obtain a mining lease or participate in any form in a mining venture if: (1) that Bhutanese citizen, proprietor of a licensed firm or company has defaulted in complying with the lease terms and conditions and has been penalised for more than two times for a same offense; or (2) that Bhutanese citizen, proprietor of a licensed firm or company has failed to fulfill the terms and conditions of a tender for mining lease after emerging as a successful bidder. Chapter 6. Royalty, Mineral and Lease Rent Royalty and mineral rent

63. The lessee shall pay royalty and mineral rent under section 42 of the MMMA, in accordance with the schedule in Annex 5 of this Regulations and Taxes & Levies Act. Page 14 of 89 Mines and Minerals Management Regulations 2022

64. The royalty and mineral rent payable shall be on the actual quantity of mineral despatched from the mine done through Form C of Annex 1 of this Regulations and the payment shall be made as per the agreed schedule in the lease agreement.

65. The Government may amend the rates of royalty and mineral rent from time to time. Lease rent

66. The lessee shall pay lease rent for the lease area under section 43 of the MMMA.

67. The lease rent for the state land in the demarcated mining area shall be payable at the rate fixed by the Government.

68. If any part or whole of the mining area is private registered land, then the lessee shall pay the lease rent to the land owner. However, in case of the damage of the standing crops on the land of the titleholder, owing to mining operation, the lessee shall pay the cash compensation and the lease rent to the affected owner, as per the rate fixed by the government from time to time.

69. The rate of lease rent may be subject to periodic revision by the Government. Environmental Restoration Bond

70. The lessee shall deposit an ERB to the Government as security for mine reclamation and environmental restoration in the mine to ensure that the negative impacts on the surrounding environment are minimized.

71. The ERB shall be payable based on the area coverage, overburden and actual production of material as per the approved FMFS and ERB estimation formula under Annex 4 of this Regulations. Page 15 of 89 Mines and Minerals Management Regulations 2022

72. The payment of ERB shall not relieve the lessee from implementing environmental protection measures as per approved FMFS report during the course of mining operation.

73. On surrender, termination or the expiry of the mining lease, the Department shall allow the lessee to reclaim the ERB, when it has received certification by the Department that the restoration work in the mine and the surrounding area has been satisfactorily completed.

74. If the lessee did not carry out restoration or rehabilitation activities as per approved FMFS during surrender, termination or expiry of the lease up to the complete satisfaction of the Department, the ERB shall be claimed by Department and utilise it to cover the costs of restoration of the mining area affected by the mining activities.

75. Any difference between the actual cost of reclamation and restoration of the mining area and the amount of the ERB deposited shall be returned to the lessee. Chapter 7. The Mining Operation Boundary pillars

76. On the grant of a lease, the lessee shall at his own expense erect and throughout the lease period maintain easily visible and identifiable boundary walls or pillars according to the demarcation to be shown in the plan annexed to the lease.

77. Boundary pillars shall be erected at regular intervals.

78. The boundary pillars shall remain intact till the mining lease expires. Notice for opening or reopening of a mine

79. The lessee shall inform the Department in writing at least 15 days in advance of the opening of a new mine or reopening of an existing mine Page 16 of 89 Mines and Minerals Management Regulations 2022 after discontinuance or suspension of operation exceeding three months in Form J of Annex 1 of this Regulations. Abandonment/discontinuance/surrender

80. The lessee may not abandon/discontinue/surrender a mine or part of a mine during the lease period without prior permission in writing from the Department.

81. The lessee shall send a statement of intention to abandon/discontinue/surrender the mine to the Department at least three months in advance. Where abandonment takes place as a result of natural or human forces beyond the control of the lessee, notice shall be sent as soon as possible.

82. The notice shall be accompanied by plans and sections on a scale of not less than 1:1000 showing the up-to-date workings and highlighting the environmental protection measures undertaken as well as those remaining to be carried out in the mine. The notification of the lessee's intention to cease operations under section 28(iv) of the MMMA, shall include the following: (1) brief description of reasons for closure; (2) all current maps, records and reports on current location of workings; (3) summary of remaining reserves; (4) quantity and quality of all stockpiles and waste piles; and (5) description of current production methods, equipment, mine restoration plan and remaining products.

83. The Director may, by order in writing before the proposed date of abandonment, prohibit abandonment or allow it with such conditions as he may specify in the order. Page 17 of 89 Mines and Minerals Management Regulations 2022 Transfer of the mining lease

84. The lessee shall apply to the Department in Form G of Annex 1 of this Regulations, at least three months in advance of any intent to transfer the rights and obligations of the mining lease to a third party under section 27(i) of the MMMA.

85. The Department shall examine the proposed transfer and may allow it if the party receiving the mining lease is capable and demonstrates their intent to fulfill the obligations of sections 28(i) and 37 of the MMMA. Mine closure

86. The lessee shall submit Mine Restoration Plan to the Director two and half years prior to expiry of the lease for its approval in line with the Mines Restoration Guidelines.

87. The lessee shall ensure that restoration work is carried out and completed within the mining lease period in accordance with the Mine Restoration Plan to the satisfaction of the Department.

88. A notification for closure of the mine shall be issued in Form K of Annex 1 of this Regulations within six months from the expiry of the mining lease.

89. The technical committee of the Department shall evaluate the performance of the mine based on the following criteria in Form H(iii) of this Regulations: Performance Maximum Score (%) Average of annual performance 80 ratings Mine reclamation 20 Page 18 of 89 Mines and Minerals Management Regulations 2022

90. The mine shall be rated as follows: Outstanding 80% & above Very Good 70 to 79% Good 60 to 69% Average 50 to 59% Below Average below 50%

91. If the mine is rated as “Below Average”, the promoter shall be debarred for future mining lease as follows: (1) if the score on mine reclamation is below 10% (50% of 20), the lessee shall be debarred for three years; (2) if the score on average of annual performance ratings is below 40% (50% of 80), the lessee shall be debarred for two years; and (3) if the score is below average on both 91(1) and 91(2), the lessee shall be debarred for five years. Chapter 8. Management of Mining Operations Manager

92. The lessee shall appoint a suitably qualified manager to be responsible for the control and daily supervision of the mine under section 36 of the MMMA as per sections 94 and 95 of these Regulations and his/her appointment shall be intimated to the Department.

93. The manager shall be the authorized representative of the lessee for compliance with the terms of the lease and, in particular, with the obligation set out in sections 28, 36 and 37 of the MMMA and this Regulations. Page 19 of 89 Mines and Minerals Management Regulations 2022

94. The manager shall have a minimum educational qualification of Class XII and at least two years experience of working or training in a mine for the mines employing 10 or more persons.

95. The manager shall have a degree in mining engineering and at least two years experience of working in a mine, for: (1) large mines employing over 100 persons; or (2) mechanised mines using heavy earth-moving machinery such as loaders, dumpers, drill machines, excavators etc. Foreman

96. In mines employing over 10 persons, a mine foreman having a minimum qualification of Class X and at least two years experience of working or training in a mine, shall be employed.

97. In mines employing more than 100 persons, a foreman possessing minimum five years of field experience with a certificate course in mining from Department or outside, shall be employed to assist the manager and to take charge of the mine during the absence of the manager.

98. In a mine carrying out blasting operations, the foreman shall also possess a blaster’s certificate or shall obtain one as soon as possible. Blaster

99. In mines using explosives for breaking rock, the lessee shall employ a blaster having a shot firer’s certificate under section 68 of Explosives Rules, 1989. Page 20 of 89 Mines and Minerals Management Regulations 2022 Engineer/engineering supervisor

100. For mines employing more than 100 persons, an engineer or engineering supervisor shall be employed to assist the manager in installation and maintenance of electrical and mechanical equipment.

101. The Director may require the lessee to appoint an engineer/engineering supervisor in a mine with fewer workers but with many installed machineries such as crushers, screens, compressors, heavy earth- moving machinery, etc., where such a person is needed to ensure the safe operation of the machinery. Chapter 9. Records, Reports and Notices Plans and sections

102. The lessee shall keep the following plans and sections on the mine site: (1) a key plan on a scale of 1:50,000 or larger, showing the boundary of the mining lease and the adjoining area up to a distance of 5 km, contours at not more than 20 m intervals, the natural drainage system, roads and footpaths, land uses, and places of religious or cultural heritage or natural value (e.g., sites of endangered species or biotopes, special beauty, etc.); (2) an environment plan of the mining lease and the surrounding area within 1 km of the mining lease on a suitable scale showing the boundary of the lease, contours at 5 m intervals, natural drainage system, roadways, power transmission line, land use of the area, places of cultural heritage and tourist interest, if any, the location of landslides, if any, the mine workings, area deforested, area covered by dumps, mine infrastructure such as workshop, crusher house, mine office, township, area afforested and mined area reclaimed; Page 21 of 89 Mines and Minerals Management Regulations 2022 (3) a working plan showing details of the mine workings and every surface feature within the boundary of the mine leasehold on a scale of 1:500, 1:1000 or 1:2000, as appropriate; and (4) a transverse section or sections of the workings indicating the topographical surface, the dip and thickness of the mineral deposit and other strata, faults and folds and benches in the overburden, mineral and soil dumps, if any.

103. All plans and sections submitted under this Regulation shall clearly show the name of the mine, the name of the lessee, the purpose for which the plan or section has been prepared, the true North, and the scale of the plan. Records of the mine

104. The lessee or the manager shall keep and maintain in the mine office, the up-to-date records of the mine which shall include records on: (1) excavation and disposal of overburden and inter-burden waste, top soil and low-grade mineral; (2) mineral raised, stockpiled or despatched to its destinations; (3) all workers deployed, mandays worked, wages of workers, age, gender and nationality of workers; (4) machinery and equipment, their performance, fuel and lubricant consumption; (5) blast-hole drilling and explosives; (6) accidents; (7) health and safety measures; (8) environmental protection measures; and (9) others not yet specified. Page 22 of 89 Mines and Minerals Management Regulations 2022 Report on minerals exploration

105. The exploration permit holder shall submit to the Director the half yearly progress report and a final report of the work giving details of the findings. Bi-annual report on operation of the mine

106. On or before the 15th day of the month following half of the year, the lessee shall submit to the Department a bi-annual report on operation of the mine in Form D of Annex 1 of this Regulations. Annual report on operation of the mine

107. Each year, on or before the 30th day of April, the lessee shall submit to the Director an annual report on operation of the mine for the preceding year in Form E of Annex 1 of this Regulations.

108. The FMFS shall be reviewed and updated annually, and modifications shall be communicated to the Department in the annual report under section 107 of this Regulations.

109. If a mine is abandoned, or the mine lease is transferred, or upon termination or expiry of the mining lease, the report under section 107 of this Regulations shall be submitted within one month of the abandonment or change of lessee, or within three months of termination or expiry, as the case may be. Notice of change in employment

110. When a new manager, engineer, surveyor or foreman is appointed, or when the employment of any manager, engineer, surveyor or foreman is terminated for any reason, the lessee shall inform the Department within two weeks. Page 23 of 89 Mines and Minerals Management Regulations 2022 Change of name of mine and address

111. The lessee shall inform the Department in writing of any change in the name or address of the mine within one week of the change. Chapter 10. Monitoring, Offences and Sanctions

112. The Department shall inspect and monitor all leased mines at least once every six months and may also conduct spot checks, as frequently as necessary.

113. An officer who enters property under section 112 of this Regulations shall, upon request, provide proof of identity to any person on the site. Powers of Inspectors

114. The Director shall appoint such officers possessing the prescribed qualifications to be inspectors for the purpose of enforcing the MMMA and this Regulations.

115. An Inspector may: (1) call for and examine all reports, registers and records required to be maintained by all holders of a mining lease; (2) visit, enter, inspect and examine, with or without previous notice, all facilities related to operation directly or indirectly related to a mining lease; (3) investigate the circumstances surrounding an accident, dangerous occurrence, or activity connected with the health and safety of workers or the public; (4) take measures either immediately or by subsequent notice, up to and including the closure of part or all of a mine, where the workings are not being carried out in accordance with the provisions of the MMMA and with the approved plans required by this Regulations. Such measures to be provided in writing to Page 24 of 89 Mines and Minerals Management Regulations 2022 the person in charge of the operation at the time such action is deemed necessary by the inspector; (5) take samples of any material from the mine or discharged from any mineral processing facility; (6) orally examine any person supposed to be acquainted with the facts and circumstances of any activity being examined or investigated under the MMMA; (7) take any other actions under the MMMA and regulations for the purpose of monitoring and enforcing the environmental terms of an exploration permit or mining lease; (8) upon producing official identification, stop and search any conveyance suspected of carrying mineral illegally which is defined as an offence under the MMMA; (9) prepare and distribute notices approved by the Director regarding either general or mine-site specific details on proper procedures and precautions for good and safe mining practices, environmental standards and worker and public health and safety, such notices to have the legal status of regulations. The lessee shall keep such notices posted in one or more conspicuous places at the mine; and (10) exercise such other powers as may be authorized by the Government in this behalf.

116. All powers conferred by this Regulation to Inspectors shall be exercised in such a manner as to avoid unreasonably impeding or obstructing the legitimate working of the mine. Page 25 of 89 Mines and Minerals Management Regulations 2022 Qualifications of inspector

117. Officers appointed by the Director, as National Inspectors and Regional Inspectors, shall hold a degree in either mining engineering or geological sciences from an educational institution recognized by the Government.

118. Officers appointed by the Director, as Mines Inspectors shall complete prescribed training and apprenticeship requirements. Compliance orders

119. If the Department determines that an offense is being committed or has been committed under sections 32 or 45 of the MMMA, the Director shall issue an order in writing directing the permit holder or lessee to comply with the order.

120. The order shall state the sanctions and basis for their imposition. It shall give the contact details of the responsible official, and state that the decision may be appealed, within the time limit given in Annex 6, to the Director or Minister under section 48 of the MMMA.

121. The Director may give the lessee the opportunity to make a compliance agreement in writing, wherein, the lessee shall undertake to comply with the FMFS and other terms of the mining lease within the time limit and on the terms specified in the agreement.

122. The Director may issue a separate order concerning: (1) matters not covered by the agreement; (2) the consequences of non-compliance with the agreement; or (3) matters not covered by the agreement, if additional facts relevant to the agreement were not known to the Department at the time of the agreement. Page 26 of 89 Mines and Minerals Management Regulations 2022

123. A lessee who enters into a voluntary compliance agreement with the Department under section 121 and who complies fully with the agreement, does not commit an offense under sections 32 or 45 of the MMMA. Compensation and sanctions

124. The determination of liability and sanctions for offenses committed under sections 32 or 45 of the MMMA shall take the following factors into account: (1) magnitude of the offense; (2) frequency of the offense; (3) the culpability of the offender; or (4) the extent of the achieved or intended economic advantage from the offense. Remedies

125. A sanction for an offence under the MMMA does not relieve a person from other liability under law. Administrative appeals

126. Any decision or order taken against the applicant or lessee under the MMMA and subsidiary regulations shall state that the person has the right to appeal within a specified time limit, and shall give the name and contact details of the person and office to which appeal may be made.

127. Such appeal, if not resolved amicably by the Director within 60 days, may be transmitted to the Minister. Page 27 of 89 Mines and Minerals Management Regulations 2022

128. The Minister shall notify the appellant of receipt of the appeal and the action to be taken regarding investigations and arbitration procedures, within 30 days of official receipt of the appeal from the Director. Page 28 of 89 Mines and Minerals Management Regulations 2022 PART 2. CORPORATE SOCIAL RESPONSIBILITY, OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT Chapter 11. Corporate Social Responsibility

129. The lessee shall: (1) provide preference for employment, trainings, and upgrade skills to the affected communities; (2) support local businesses; (3) give preference in awarding of mining contracts, hiring of equipment and machineries to the affected local communities; (4) develop special program to support the directly affected community; (5) procure locally available goods and services based on the required standards; or (6) draw agreements with the local communities detailing community development projects and its implementation.

130. The lessee shall appoint a dedicated focal person for Corporate Social Responsibility.

131. Any socio-economic infrastructures and facilities of the holder of a permit or a lessee shall be made accessible without any charges or costs to the affected or local community.

132. The lessee shall maintain proper financial records of contributions made towards community development or any other supports to the communities as part of corporate social responsibility and submit the mandatory annual report to the stakeholders. Page 29 of 89 Mines and Minerals Management Regulations 2022 Chapter 12. Explosives General requirements

133. All acquisition, transport, storage and use of explosives on the site shall be carried out in compliance with the Explosives Rules.

134. Any explosive brought into a mine shall be in a well-constructed and securely locked container made of heavily galvanized iron or steel. The blaster shall keep the keys to the containers on his person throughout his shift and relinquish them to the manager at the end of the shift. A container for detonators may not be constructed of metal or other conductive material.

135. Detonator shall not be kept in a container that contains other explosives. Use of explosives

136. No explosive may be used in a mine except that provided by the lessee.

137. A detonator may only be taken out from its container when it is required for immediate use.

138. The preparation of charges and the charging and stemming of holes shall be carried out by or under the personal supervision of the blaster.

139. Only the blaster may fire the shots.

140. The blaster shall be provided with wooden rods for stemming shot holes, a pair of suitable crimpers for crimping detonators, a pricker made of wood or of a non-ferrous metal for priming cartridges, and a knife for cutting off fuses.

141. In case of electric shot firing: (1) the shot shall only be fired by means of a suitable shot firing apparatus; Page 30 of 89 Mines and Minerals Management Regulations 2022 (2) the blaster shall keep the key of the shot firing apparatus in his person throughout his shift and relinquish it to the manager at the end of the shift; and (3) when multiple shots are to be fired at the same time, the circuit shall be tested for electrical resistance or continuity before it is connected to the firing apparatus.

142. Before a shot is charged, stemmed, circuit tested or fired: (1) the blaster shall ensure that all persons in the vicinity have taken proper shelter; and (2) he shall give sufficient warning, by an efficient system of signals or by other means approved by the manager over the entire danger zone of 500 metres radius from the place of firing that a blasting is going to take place.

143. Adequate shelters shall be provided when the workings offer insufficient protection against fly rock.

144. An all-clear signal shall be given after shots have been fired, except in case of a misfire.

145. Where a public road lies within the 500 m radius of the danger zone from the blast holes, guards shall be posted at appropriate places to prevent persons and vehicles coming within the danger zone during the blasting period. Misfires

146. When a misfire occurs in a mine, indicated by the counting of exploded shots in case of fuse blasting, or observed by the blaster from other indications in case of electrical or detonating cord blasting, no person shall enter the place of blasting until 30 minutes in case of fuse blasting and 5 minutes in case of electrical or detonating cord blasting after the Page 31 of 89 Mines and Minerals Management Regulations 2022 firing of shots. The place of the misfire shall be marked by a red flag to indicate it as a danger zone.

147. In the event of a misfire, the following procedure shall be followed: (1) the tamping may be sludged out with compressed air or water under pressure and the hole may be reprimed and fired; (2) when the misfire is due to a faulty cable, or is due to a faulty connection in case of electrical firing, the shot may be fired again after the defect has been rectified; (3) where the steps in sections 147(1) and 147(2) of this Regulations have not been successful, another shot may be fired in a relieving hole where practicable. The relieving hole shall be drilled at least 30 cm away from and parallel to the misfire hole; (4) after the relieving hole has been fired, a careful search shall be made for cartridges and detonators amongst the material brought down by the shot; (5) before leaving the mine, the blaster shall inform the foreman and the manager of the misfire that has occurred; when a misfired shot has not been relieved or re-blasted, he shall also inform the officer of the next shift before he leaves the mine; and (6) the blaster shall record every incident of misfire in a bound- paged book kept for that purpose.

148. The manager shall ensure that utmost care is exercised when working is carried out in the mine in an area where the presence of a misfired hole has been reported and the hole has not been relieved. Chapter 13. Machinery and Plant

149. Only properly trained and certified persons may operate or supervise the operation of machinery on the site of the mine. The operator of Page 32 of 89 Mines and Minerals Management Regulations 2022 heavy earth moving machinery shall possess an operating certificate duly certified by mechanical in-charge and manager of the mine.

150. Every air receiver forming part of a compressed air plant shall be fitted with a safety valve and an air gauge, which shows pressure in excess of the atmospheric pressure.

151. Moving parts of any machinery, which can pose danger to the workers, should be adequately fenced while in use. Adequate precautions shall be taken while the guards are removed for carrying out any examination, adjustment or repair.

152. Loose outer clothing may not be worn in close proximity to any moving machinery.

153. A competent person shall, at least once a week, make a thorough inspection of all machinery and plant in use and shall record the result in a bound-paged book kept for the purpose.

154. When heavy earth-moving machinery is used in a mine, the lessee shall maintain a log book for each machine showing the hours in use and idle, the reason for idleness, consumption of fuel/energy and lubricants, and the output of the machine during the corresponding working hours. Chapter 14. Accident Prevention and Response Protective clothing and equipment

155. The lessee shall ensure that any person entering a mine site shall wear a helmet and protective footwear.

156. The lessee shall supply, free of charge, a helmet and protective footwear to any person who works in the mine site. This shall be replaced when damaged or worn. Page 33 of 89 Mines and Minerals Management Regulations 2022

157. The National Inspector or Regional Inspector may ask the lessee to supply other protective equipment such as gloves, goggles, ear plugs, dust respirators, etc., to any worker or a group of workers who are exposed to special hazards at work. Notice of accidents

158. The lessee shall immediately inform the Regional/Mines Inspector and the Director, and submit a report on the accident in Form I of Annex 1 of this Regulations to the Director within one week with a copy endorsed to Dzongdag, if an accident: (1) causes loss of life or serious bodily injury to any person in or near a mine due to mining operation; or (2) occurs due to explosives or bursting of equipment containing compressed air or other substance at high pressure. Weekly day of rest

159. No person shall be required or allowed to work in a mine for more than six days in one week. Hours of work

160. No person employed in a mine shall be required or allowed to work more than forty-eight hours in any one week.

161. No person employed in a mine shall work for more than five hours continuously before he has had a rest interval of at least half an hour.

162. The period of work of every employee shall be arranged so that, in addition to the rest interval, it does not total more than 12 hours in one day. Page 34 of 89 Mines and Minerals Management Regulations 2022 Compensation

163. Compensation, in case on accidents resulting in injury or death, shall be made as per the existing laws of the Kingdom.

164. In case of any damage to private or government property within or outside the mining lease area resulting from any activity in the mine, the lessee shall pay suitable compensation as determined by the Government. Chapter 15. Open Cast Mines General precautions

165. In open cast working in soft rock, such as alluvial soil, clay, debris, gravel or similar ground: (1) the sides shall be sloped at an angle not exceeding 45 degrees from the horizontal, unless the Director permits another angle by order in writing; and (2) the sides shall be kept benched; the height of any bench may not exceed 1.5 m and the breadth may not be less than the height.

166. In an excavation in any hard and competent rock worked manually: (1) the sides shall be sloped at an angle of not more than 60 degrees from the horizontal; and (2) the face shall be benched; the height of any bench may not exceed 5 m and the breadth may not be less than the height.

167. Where, in a mine employing heavy earth-moving machinery and deep hole blasting, the requirements of sections 165 or 166 cannot be complied with, the manager shall propose a suitable method for approval in writing to the Director at least 60 days prior to the start of the work. Page 35 of 89 Mines and Minerals Management Regulations 2022

168. Work may not begin until the lessee has received written permission for the alternative method from the Director.

169. No tree, loose stones or debris shall be allowed to remain within a distance of 3 m from the edge or sides of the excavation.

170. No person may undercut any face or side to cause over-hanging. Underground mining

171. If a lessee or manager proposes to extract ore/mineral by underground mining method, he shall submit a detailed proposal with the scheme of entry, blasting, loading, support, size of openings and pillars, haulage etc. to the Director for approval.

172. Any underground mining shall not start prior to the approval in writing from the Director.

173. The Department shall formulate separate regulations for the operation of underground mines as and when required. Chapter 16. Occupational Health and Environment Health and environmental standards

174. The lessee shall ensure that the mine works comply with all emission limits and ambient air quality standards adopted by the National Environment Commission under the EA Act.

175. If emission limits or ambient air quality standards are adopted after the grant of the mine lease, the lessee shall prepare an action plan to bring the mine works into compliance within a reasonable time not exceeding one year, and submit it to the Director for approval as a proposed modification to the FMFS in the annual report under section 107 of this Regulations. Page 36 of 89 Mines and Minerals Management Regulations 2022 Occupational disease

176. The lessee shall inform the Department within seven days of any cases where a person employed in the mine is suspected of having contracted pneumoconiosis and other dust diseases of the lungs.

177. Any medical practitioner, who attends to a person employed in a mine and diagnoses that the person is suffering from pneumoconiosis, shall immediately send a notice in writing to the Department. Sanitary and drinking water conditions

178. In compliance with section 37(ii) of the MMMA, the lessee shall provide and maintain adequate numbers of clean latrines and a sufficient supply of cool and wholesome drinking water for all persons working at the site. Dust

179. The lessee shall take such all necessary measures to control dust emissions at any work place and to suppress dust by spraying water or by other measures to ensure that workers are not exposed to harmful concentration of airborne respirable dust.

180. For the purpose of this Regulations, respirable dust is airborne dust with size of less than 10 micrometer.

181. For the purpose of this Regulations, a place shall be considered to have harmful concentrations of airborne respirable dust if: (1) the 8-hour time-weighted average concentration of airborne respirable dust exceeds three mg/m3 of air if the dust contains less than 5 percent of free silica; or (2) the 8-hour time-weighted average concentration of airborne respirable dust exceeds the value of 15 divided by the percentage of free silica present in the dust. Page 37 of 89 Mines and Minerals Management Regulations 2022

182. Pending adoption of emission limits and ambient air quality standards by the National Environment Commission under section 33.2 of the EA Act, the lessee shall take all measures necessary to ensure that the ambient air quality meets the following standards at the site boundary: (11) less than 500 µg/m3 concentration of suspended particulate matter; and (12) less than 200 µg/m3 concentration of suspended particulate matter if the area immediately beyond the leasehold is rural or residential in character.

183. The lessee shall at least every six months or whenever the Regional Inspector requires by an order in writing, cause the air at every workplace where airborne dust is generated to be sampled and the concentration of respirable dust determined.

184. When the dust monitoring results have established that the permissible levels of dust concentration are being exceeded at any place, the operation or operations causing excessive dust generation shall be shut down until remedial measures have been taken to ensure that the ambient air quality standards in sections 181 and 182 of this Regulations or in the mine lease or other rules and regulations issued by the Government are complied with. Noise

185. The lessee shall take steps to control the generation of noise in a mine and ensure that workers at the mine are not exposed to high noise levels.

186. The maximum permissible noise level on the site shall be 90 dBA for an 8-hour shift. Page 38 of 89 Mines and Minerals Management Regulations 2022

187. If a particular operation in the mine such as drilling, dozing, crushing, compressor operation, etc. generate a higher noise level, the working hours for the operators of such equipment shall be reduced to 4 hours when the noise level is 93 dBA; the working hours shall be reduced by further 50 percent for every additional 3 dBA increase in the noise level in the work zone.

188. Workers shall not be allowed to enter an area in which the noise level is 115 dBA or more without appropriate ear protection.

189. The lessee shall provide ear plugs or ear muffs to workers in areas of more than 90 dBA.

190. The lessee shall cause to be monitored the noise level at the site and just outside the boundary at suitable locations at least every three months, according to the terms of the lease. Use of topsoil

191. Where topsoil is excavated for mining works or where creation of overburden/waste dumps would cover the topsoil, the lessee shall remove the topsoil separately before starting the excavation or constructing the waste dump.

192. The lessee shall use the topsoil for reclamation of mined out areas, overburden and waste dumps.

193. If the topsoil cannot be used immediately after its removal, the lessee shall store it separately for future use in such a way as to prevent loss through wind or water. Overburden and waste dumps

194. Wherever possible, the lessee shall back-fill the waste rock and overburden into the mine excavations with a view to restore the land to its approximate original shape. Page 39 of 89 Mines and Minerals Management Regulations 2022

195. In deposits where in-pit dumping is not possible and also to accommodate the overburden and waste material produced in the initial stage of mine development, the lessee is required to locate suitable waste dumping places outside the mine pit, create dump in layers suitably terraced at the edges to improve stability, control erosion and for ease in reclamation, and vegetate it as early as possible.

196. The lessee shall undertake phased reclamation or rehabilitation in the areas affected by the mining operation which has no prospect for future use or further mining.

197. The lessee shall incorporate the phased reclamation works in the updated FMFS report and submit for approval by the Department.

198. The overburden and wastes shall be disposed only at the site indicated in approved FMFS or the area approved by the Department and as per the terms and conditions of the Environmental Clearance. Ground vibration

199. Whenever any damage to private or public property or places of cultural heritage is reportedly caused by blast-induced ground vibration, the Regional Inspector may require the lessee to carry out measurements of peak particle velocity (PPV) and frequency of the ground vibration induced by blasting and to develop a predictor equation for ground vibration for the site.

200. Depending on the type of structures and the dominant excitation frequency, the peak particle velocity (PPV) in mm/s on the ground adjacent to the structures not belonging to the lessee may not exceed the values given below in the table. For structures belonging to the lessee 50% higher ppv value may be permitted. Page 40 of 89 Mines and Minerals Management Regulations 2022 Types of Structures Dominant excitation frequency, in Hz and maximum permissible ppv value in mm/w <8Hz 8-25Hz >25Hz Domestic houses 5 10 15 Industrial buildings 10 20 25 (RCC and framed structures) Places of cultural 2 5 10 heritage Water

201. Any water leaving the mine boundary shall not exceed the value of (1) 50mg/l of total suspended solid (TSS); and (2) 10mg/l of oil and grease.

202. Where the mine effluent or overburden dump seepage water has any toxic element, the water shall be treated to reduce the toxicity level acceptable to Department/NECS before being allowed to leave the mine lease area. Monitoring of environmental quality

203. The lessee or the manager of a mine shall be required to get the environmental quality in and around the mine lease area monitored regularly for air, water, noise, vibration and slope stability as specified in the environmental clearance.

204. A copy of the environmental quality monitoring results shall be submitted to the Regional Inspector every three months.

205. The lessee or the manager shall get the annual environmental statement prepared giving the environmental quality of air, water and noise in the mine and its surroundings, the area deforested and revegetated, results Page 41 of 89 Mines and Minerals Management Regulations 2022 of ground vibration measurements, area of top soil and waste dumps and details of environmental protection works. Page 42 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form A For Official Use DGM Application No Other: Date received Other Responsible Officer Annex 1 – Form A (Application for Mining Lease) (Section 36) APPLICANT DETAILS INDIVIDUALS Title (tick)* Mr Mr Ms. Dasho Dr. Others . s. Name* Postal Address Telephone No. Mobile No.* CID No.* Email ID* LICENSED FIRMS OR COMPANY Name* Postal Address* Telephone No. Mobile No.* License No.* Email ID* SHORT DESCRIPTION OF THE PROPOSED MINING ACTIVITY Type of mine Type of minerals/products* Required investment (Nu.)* Source of Finance* Loan Equity Technical competence & experience Work force requirement & recruitment* Proposed lease period* SRF Private Total area Land ownership (acres) (acres) (acres) No. of mining lease in hand* No. of application under process* Page 43 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form A LOCATION OF THE PROPOSED MINING ACTIVITY Place* Nearest village* Gewog* Dzongkhag* Geographical Co- Longitu Latitude: ° ’ ” N ° ’ ” E ordinates* de: DECLARATION I hereby declare that the information provided herewith are true to the best of my knowledge and in the event of false or misleading information, I shall be liable for any action under the Mines and Minerals Management Act and Regulations thereof. SIGNATURE* Applicant Witness Signature* Affix legal stamp Name* CID No. * Contact no. * Date Place Required documents Sl. Appendix Tick (√) mark Appendices (fields with * signs are mandatory) No. No. if enclosed A copy of CID in case of individuals/license/company 1 A registration certificate* 2 Location map with proposed boundary* B 3 Description of financial capability with evidences* C A copy of Household Information (family tree) issued 4 by MoHCA for an individual or proprietor of a licensed D firm* Written consent from the private landowners if the 5 E proposed area falls within private registered land 6 Exploration report (Mandatory for captive mines) F Page 44 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B Annex 1 - Form B (Mining Lease Agreement) (Section 48) This Mining Lease Agreement (MLA), including three Annexures attached hereto, is made at Thimphu on the ………. Day of ……… (Month) (Weekday)……. of the year ……. (in words) ………………. (in figure). BETWEEN The Department of Geology and Mines (DGM), Ministry of Economic Affairs, Thimphu, on behalf of the Royal Government of Bhutan, hereinafter called the "Lessor" of the first part; AND Mr./Mrs.……………………………. bearing CID No.…………….... from …………………. under ………………… Gewog, ………………. Dzongkhag hereinafter called the "Lessee" of the other part. (OR) M/s. ………………bearing the Registration No. ……………….… hereinafter called the "Lessee" of the other part. Whereas, the Ministry of Economic Affairs is pleased to grant the renewal of Mining Lease for mining of ……………(mineral)………. for use as ………………… at …….(place)………., under ……………… Gewog, ………………… Dzongkhag vide its approval No. ………………… dated ……………………. to Mr./Mrs./M/s……………………………. Now this MLA witnesses that in consideration of the rent and Royalties hereinafter reserved and of the covenant on the part of the Lessee hereinafter contained, the Lessor does hereby demise to the Lessee on terms and conditions given in this Agreement the ……………. deposit situated at ……………. under …………… Gewog, ……………. Dzongkhag covering an area of ………… acres (……. hectares) delineated by DGM and indicated in the Map at Annexure I, hereinafter called the "AREA", together with the right to mine ….……………. for use as ……………………. in and upon the AREA. Page 45 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B Terms and Conditions Clause I The lease shall be for a period of ………. years from ……………… to ………………. and the name of the mine shall be …………………………. Clause II The Lessor may terminate this lease upon non-compliance by the Lessee with any of the terms and conditions of the lease or sections contained in the Mines and Minerals Management Act (MMMA) 1995 and the Mines and Minerals Management Regulations (MMMR) 2022 issued under it, or if the Lessee is in violation of his covenants for more than two instances, or if it is in the interest of the Royal Government to withdraw the lease. Clause III The Lessee may surrender the whole or a part of the lease of the AREA at any time after giving three months' notice in writing to the Lessor, provided that: a) All payments due to the government have been made up-to-date. b) The surrendered area has been restored/reclaimed up to the complete satisfaction of the Lessor. Clause IV Upon approval by the Lessor affecting the expiry/termination/surrender of the lease, the Lessee shall hand over the leased AREA to the Lessor within thirty (30) days thereof after fulfilling the sections contained in the Mines and Minerals Management Act 1995 and the Rules and Regulations formulated thereunder. Clause V The Lessee shall not be eligible for any compensation from the Lessor against loss of mineral due to natural or other disasters. Clause VI The payment of the compensation on termination of the lease shall be dealt in accordance with section 29 (iii) of the MMMA 1995. In case of suspension of a mine or its part in accordance with section 32 of the MMMA 1995, the lessee shall not be liable for any compensation from the Government. Page 46 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B Clause VII The ……….(minerals)……… extracted from the leased AREA shall be solely for the purpose of use as …………………. Clause VIII a) The mine development and mineral production shall be commenced by the Lessee in the leased AREA within 2 years failing which the lease is considered automatically terminated. b) The mining lease shall also be terminated if the lessee fails to operate the mine for two years at a stretch at any point of time during the lease period. Clause IX For carrying out work in the AREA the Lessee shall maintain the technical manpower, equipment and operational scheme as per the Final Mine Feasibility Report which has been submitted and duly approved by the Lessor vide letter number …………………. dated …………Clause X At any time during the tenure of the MLA, it shall be the responsibility of the Lessee to update/validate all mandatory clearances, failing which the operation of the mine shall be suspended. In the event the clearances cannot be obtained within a period of 6 months, the MLA shall be automatically terminated. Rent and Royalty Clause XI

1. The Lessee shall pay Royalty and mineral rent to the Regional Office of Economic Affairs, …………………. in accordance with the rates and terms laid down in Annexure II, in advance.

2. Royalty, mineral rent, sales tax, income/corporate tax, lease rent and such other government levies shall be as per Government schedule of rates and existing rules, which may be revised from time to time. Lease rent shall be applicable until the area has been formally handed over after the restoration. Page 47 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B

3. Determination of the quantities of ………….(mineral)……… dispatched for the purpose of calculation of Royalty and mineral rent shall be in accordance with the procedure laid down in Annexure III and as may be revised by the government from time to time. Clause XII The Lessee shall obtain a business license for sale of the minerals/products and submit a copy to the lessor, prior to issuance of work order. The Lessee Hereby Agrees to the Covenant as Follows:

1. To submit the notice for starting the mine development and re-opening of mine in Form J of the Mines and Minerals Management Regulations prior to the start of the mining operation.

2. To ensure that all the work in the AREA is carried out diligently and strictly in accordance with the provisions of the Mines and Minerals Management Act 1995 and the Regulations and any revision or order issued by the Ministry of Economic Affairs in this regard from time to time.

3. To commence the mining operation as per the terms and conditions laid down in Clause VIII.

4. To pay applicable Royalty, mineral rent and other levies on time.

5. To pay compensation for any loss or damage that may be caused by the mining operation to any land or property whether belonging to the Government or to any private person. The amount of the compensation shall be determined by the relevant Government agencies after taking into account the estimated cost of damage caused or likely to be caused.

6. To submit reports and drawings as per the following schedule: i. Bi-annual Report in Form D before the 15th day of the month following half of the year. Page 48 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B ii. Annual Report in Form E for each calendar year, before 30th April of the year following the reported year iii. Notice of Accident in Form I within one week of the occurrence of the accident with copy to concerned Dzongdag.

7. To prepare and maintain accurate plans and sections of all mine workings, as well as of all exploratory work carried out by the Lessee, including pits, bore-holes and trenches.

8. To keep in the mines office copies of all reports, notices and returns required to be submitted or maintained under this lease agreement or Mines and Minerals Management Act and Regulations, and shall produce the same on demand by the inspection team of the DGM.

9. To refrain from cutting down trees and removing forest products from the AREA without prior approval from the Department of Forest and Park Services.

10. To erect and maintain boundary pillars around the AREA to clearly demarcate its boundaries.

11. To report in writing to the Lessor within 15 days the discovery of any mineral in the AREA other than that for which this mining lease has been granted and to refrain from mining of any such mineral unless a lease for mining the same is granted to the Lessee.

12. To carry out the mining activities in the area with full regard to MMMA 1995 and MMMR 2022, with regard to Safety, Mineral Conservation, and Environmental Preservation and Protection Laws of the country.

13. To refrain from engaging in fronting in any form whatsoever which shall include unauthorized financial participation as well as sub-letting the AREA or any part thereof to foreign or domestic companies or individuals.

14. To comply with all the terms and conditions of the valid clearances issued by the concerned authorities. Page 49 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B

15. To open a joint account in the name of the mine to deposit the money as security for mine reclamation and environmental restoration for the mine upon signing the lease agreement, which shall be withdrawn by the Director General, DGM and Chief Finance Officer, Directorate Services, MoEA jointly.

16. To deposit a sum of Nu. …………….. (Ngultrum …………………….. only) prior to the commencement of mine development work and Nu. 4/- per MT of material dispatch in advance by way of Environmental Restoration Bond (ERB) into the joint account opened in accordance to the preceding clause.

17. To surrender ERB, if the mine reclamation and restoration of the mined out area is not carried out to the satisfaction of the Lessor. Clause XIII The fund deposited in the joint account opened by way of ERB shall be claimed by the Lessee upon carrying out the mine reclamation and restoration of the mined out area to the satisfaction of the Lessor and a Clearance shall be obtained as per Form K. IN WITNESS WHEREOF the parties first above written have affixed their signatures hereto: Signed: Signed: Director General (Name) Department of Geology and Mines Authorised Signatory For and on behalf of For and on behalf of the Ministry of Economic Affairs ………………..… Mine Royal Government of Bhutan CID No. ……………..... Lessor Lessee Page 50 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B Witness 1: Signature: Name: ………………. Chief Engineer Mining Division Witness 2: Signature: Name: ………………. CID No.: ……………… Annexure I Plan showing the boundaries of lease-hold area in relation to: a. Demarcation pillars b. Natural features like hills and drainage system c. Roads and other infrastructural features d. Main triangulation points, position of boreholes/trenches and any previous workings e. Surface contour lines on a scale having representative fraction of 500:1 to 10,000:1 f. Boundary of various land uses and cadastral features. Annexure II Rate and terms for payment of royalty, mineral rent and lease rent for all minerals;

1. Royalty and mineral rent shall be paid in advance of the despatch of the mineral to the concerned Regional Office of Economic Affairs. Page 51 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B i. Royalty payable per metric tonne (MT) of despatch of ………(mineral)……. for domestic supply (subject to periodic revision by the government) shall be Nu. ………….. per MT. ii. Royalty payable per metric tonne of despatch of …….(mineral)……. for export (subject to periodic revision by the government) shall be …………. on the Minimum Floor Price established at country exit point or the invoiced value, whichever is higher. iii. Mineral rent payable per metric tonne of ….…(mineral)………. for domestic supply (subject to periodic revision by the government) shall be ………… per MT. iv. Mineral rent payable per metric tonne of ……. (mineral)…. for export (subject to periodic revision by the government) is an amount equivalent to …………. of projected export royalty or domestic royalty, whichever is higher.

2. The rate of lease rent for all surface area occupied by the Lessee shall be Nu. …….. per acre per annum unless revised by the Royal Government, and it shall be for the period from the date of approval until the site has been satisfactorily restored and surrendered to the Lessor. Annexure III Procedure for determining production and despatch from the mine, for the purpose of calculation of mineral levy shall be as follows: ● The Lessee shall be responsible for printing the Transport Permit Books for which serial numbers for the Transport Permits shall be obtained from the DGM prior to printing. ● The Lessee shall then handover all the printed Transport Permit Books to the Mines Inspectors posted at the mines by DGM. ● The Mines Inspectors shall be responsible for filling in the Transport Permits at the time of arrival of the loaded trucks to the despatch check post, or at the exit point of the mine. Page 52 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form B ● The Mines Inspector shall handover three copies of the Transport Permit to the driver of the truck and retain the fourth copy. The three copies shall accompany the goods to its destination. ● At least one copy of the Transport Permit, after receipt of the goods at the destination, shall be returned to the manager who shall keep it preserved and recorded for post audit purposes. ● The Mining Division, DGM shall routinely cross check the information received from the Mines Inspectors posted at the mine. ● For the calculation of the weight of mineral to be despatched, the Lessee shall use pre-designated/approved weigh-bridge facilities. In the event where the weighbridge facilities are not available, an accurate conversion factor shall be applied to convert the volumetric measurement in cubic meters of the mineral into metric tonnes. Page 53 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form C Royal Government of Bhutan Ministry of Economic Affairs Department of Geology and Mines Annex 1 - Form C (Transport Permit) No. Date: Vehicle number ………………………. has departed ………………………………………............. Mine/stockyard on …………………… (Date/Month/Year) at …...……...……. (Time) carrying the following for supply to …………………………………………………………………………………………. … ……… ………………………………………………………. (buyer and destination). Sl. No. Particulars Quantity Remarks TOTAL QUANTITY: In words: ……………………………………...…………………………………………………… …………………………………………………………………………………(quantity) Despatch Check Point: …………………………………… Mines Inspector Name: Page 54 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form D For Official Use Application ID No. Received Date Annex 1 - Form D (Bi-annual Report on Operation of the Mine) (Section 106) Period of Reporting (Ö) First half Second half Year Actual number of days operated during the half year A. DETAILS OF THE MINE Name of the mine Lessee Postal Address Tele No. Mobile No. Fax No. Email ID Mineral(s) Mined B. SALE OF MINERALS DURING THE PERIOD Sl. Specification (size, Unit Mineral Domestic Export Total No. dimension, grade) (MT/Cum.) C. MINERALS STOCK DETAILS (Please enclose separate sheet for each stockyard, if any) Despatch (Total Unit Opening Closing Mineral Product Raising as reported in B (MT/Cum.) Balance Balance above) NUMBER OF TRUCKLOADS DESPATCHED: D. WASTE GENERATED (with no economic value) Type of Unit Place of Lead Method of Excavated Disposed off Waste (Cum.) Disposal Distance Disposal Page 55 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form D E. EXPLOSIVE USE AND DRILLING a. Drilling Information Average Total Drill Hole Dia Depth of Blast Meterage Drilling No. of Holes Drilling (mm) Holes (m) Drilled (m) Time/hole Time (min) (min) b. Explosives Type of Opening Procurement/ Closing explosive and Unit Consumption Balance Receipt Balance accessories c. Blasting Information Explosive Charge per Hole Charge Length per Hole (average) (unit) (average) (m) Cost of Explosive Utilised (Nu.) Name of the Blaster License No. F. MANPOWER a. Summary Total Workers Total Wages and Salary (Nu.) Male Workers Female Workers National Expatriate b. Details Expatriate Type National workers Total Wages Category (skilled/semi worker Workers Total Sl. and of - Mandays No. Male Fem Nat Exp Salary Workers skilled/unski Femal Worked Male ale ion atria (Nu.) lled) e al te Page 56 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form D G. RETURN ON MACHINERIES Hired (Yes or Name of Equipment Fleet (No.) Running cost (Nu.) No) H. MARKET INFORMATION a. Domestic Quantity Price per Sale Transporta Transpo Mineral Value Mineral (MT/Cu Unit Destinati tion rt Cost Product (Nu.) End Use m.) (Nu.) on Method (Nu.) b. Export Quantity Price per Sale Transporta Transpo Mineral Value Mineral (MT/Cu Unit Destinati tion rt Cost Product (Nu.) End Use m.) (Nu.) on Method (Nu.) I. COSTS, RETURNS & REVENUE a. Summary Landed Cost (for Mineral Quantity Total Sale Value Total Production captive Mines Only) product (MT/Cum.) (Nu.) Cost (Nu.) (Nu.) a. Break-up of Production Cost Sl. No. Cost Details Amount 1 Earth Moving Machineries 2 Transportation Page 57 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form D 3 Salary & Wages 4 Royalty, mineral rent and lease rent 5 Explosives 6 Energy 7 Communication charges 8 Environmental Management Cost 9 Depreciation 10 Interest on loan 11 Other expenses TOTAL b. Royalty/Tax payment (Nu.) Cheque/draft Revenue Type of Levy Amount (Nu.) Date Receipt Date No. Receipt No. Royalty & Mineral rent J. SAFETY ASPECTS (accidents, injuries) Seriousness of Injury Person (s) Place of Cause of Date Injured Injury Injury Minor Major Fatal Declaration I hereby declare that the information provided herewith are true to the best of my knowledge and in the event of false or misleading information, I shall be liable for any action under the Mines and Minerals Management Act and Regulations thereof. Name*: Designation*: Date: Page 58 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form E For Official Use Application ID No. Received Date Annex 1 - Form E (Annual Report on Operation of the Mine) (Section 107) For the Year (submission: On or before 30th Day of April of the following year) A. GENERAL a. Details of the Mine Name Manager Postal address Tele No. Mobile No. Fax No. Email ID b. Details of Lessee Name Postal address Tele No. Mobile No. Fax No. Email ID Name Percentage Major shareholders of the Company with % of share Authorised Representative c. Present Status of the Mine (tick the appropriate one); Production full Production under Developing Abandoned capacity capacity Date of seasonal Date of opening: closure Principal mineral extracted: Subordinate minerals extracted: Page 59 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form E B. GEOLOGY No. of exploratory boreholes/trial pits Exploratory borehole meterage drilled (metres) Reserve estimated (MT) C. SOCIOLOGICAL ASPECTS a. Medical Facility Availability of BHU/dispensary hospital: Provision of other medical facilities: b. Educational facility d. Recreational facility (Tick c. Housing facility provided if available) Category of worker % covered e. Canteen/subsidised food f. Water & sanitation g. Transport & communication h. Training i. Amenities to staff (tick if provided): Bonus/incentive Leave Travel Concession (LTC) Medical re-imbursement Leave with pay Overtime Allowance GIS scheme Loan facility D. MINE PRODUCTION a. Method of operation (tick appropriate box) Production Loading Waste Disposal Manual Mechanised Semi-mechanised a. Dust suppression method adopted: Page 60 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form E E. DRILLING & BLASTING a. Drilling Information Depth of Blast Holes No. of Holes Drill Hole Dia (mm) Meterage Drilled (m) (m) b. Explosives Type of explosive Annual Price per Brand Name Manufacturer Supplier and accessories Consumption unit (Nu.) Total explosive cost (Nu.) Magazine types & capacity F. ENERGY CONSUMPTION Connected Load (KW) Power Consumption (KWH) Annual power bill paid (Nu.) Total P.O.L cost (Nu.) Total cost of energy consumed (P.O.L + power) (Nu.) G. EMPLOYMENT a. Managerial Nature of Type Certificate Employment Name Designation Nationality (skilled/semi- holder (regular/contract/ skilled/unskilled) (Yes/No) casual) b. Manpower and its costs Category of Type (skilled/semi- Salary & wages No. of workers Total mandays workers skilled/unskilled) (Nu.) Page 61 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form E c. Summary Total Workers Total Wages and Salary (Nu.) Male Workers Female Workers National Expatriate H. SAFETY ASPECTS a. Injuries during the year Seriousness of Injury Number of persons injured Minor Major Fatal b. Safety appliances provided to the mine workers Type of appliances Category of workers I. LAND USE AND ENVIRONMENT Lease hold area Total demarcated area (acres) SRF (acres) Total excavation area (acres) Private land area (acres) J. EQUIPMENTS/MACHINERY Name of Initial Current Depreciation Maintenance Yearly cost equipment/ cost value Make Capacity (Nu.) cost (Nu.) (Nu.) machinery (Nu.) (Nu.) Total Page 62 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form E K. SALES AND MERKETING a. Sales Mineral Opening Closing Unit Total product Raising balance at Domestic Export balance at (MT/Cum.) Sale type stockyard stockyard b. Marketing Customer Mineral Quantity Chemical Selling relation Quality/grade End use product type (MT/Cum.) assay point (no. of years) How sale price is determined? L. INVESTMENTS, COSTS AND RETURNS a. Summary Landed Cost (for Quantity Total Sale Value Total Production Mineral product captive Mines (MT/Cum.) (Nu.) Cost (Nu.) Only) (Nu.) a. Investment (additional investment in current year in terms of capital expense) Description Investment value (Nu.) Total investment c. Break-up of Production Cost Sl. No. Cost Details Amount 1 Salary and wages 2 Energy 3 Transportation 4 Explosives 5 Royalty, rents & taxes Page 63 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form E 6 Environment management 7 Depreciation 8 Interest on loan 9 Communication charges 10 Other expenses TOTAL d. Financing and repayment Loan position in the year’s beginning (Nu.) Repayment during current year (Nu.) Balance at year-end (Nu.) e. Environment management budget Budget allocation for mine environment management & mine rehabilitation activity in the following year (Nu.) ERB deposited in the joint account (Nu.) f. Revenue Royalty & Mineral Rent (Nu.) Land lease rent (Nu.) License Fee (auctioned mines only) CIT/BIT (Nu.) (Nu.) Rupee earnings during the year Hard currency earnings during the year M. Community development/CSR Amount spent on CSR activities during the period (Nu.) Activity Amount (Nu.) Some of the CSR activities along with details of budget Declaration I hereby declare that the information provided herewith are true to the best of my knowledge and in the event of false or misleading information, I shall be liable for any action under the Mines and Minerals Management Act and Regulations thereof. (Name) Designation Date: Page 64 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form F For Official Use DGM Application ID No. Other Date received Other Responsible Officer Annex 1 - Form F (Application for Renewal of Mining Lease) (Section 54) APPLICANT DETAILS Lessee* Postal Address Telephone No. Mobile No. * Fax No. Email ID* SHORT DESCRIPTION OF THE MINE LEASE Name of the Mine* Current Lease* Duration* Expiry Date* Proposed lease renewal period* Domestic Captive Specify mineral use (tick) * Specify Export country LOCATION OF THE MINE Place* Nearest village* Gewog* Dzongkhag* DECLARATION I hereby declare that the information provided herewith are true to the best of my knowledge and in the event of false or misleading information, I shall be liable for any action under the Mines and Minerals Management Act and Regulations thereof. Page 65 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form F SIGNATURE* Applicant Witness Signature Affix legal stamp Name: CID No.: Contact Details: Date Place Required documents to be attached: Appendix Tick (√) mark if Sl. No. Appendices (fields with * signs are mandatory) No. enclosed 1 Valid Tax Clearance Certificate* A 2 Deposit Assessment Report* B Page 66 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form G For Official Use DGM Application ID No. Other Date received Other Responsible Officer Annex 1 - Form G (Application for Transfer of Mining Lease) (Section 84) DETAILS OF MINING LEASE (field with * sign are mandatory) Name of the mine* Nearest Place* Location of the mine* village* Gewog* Dzongkhag* Agreement No.* Signing Date* Mining Lease Details* Valid from* To* TRANSFEROR (EXISTING LESSEE) DETAILS Name* Postal Address* Telephone No. Mobile No.* Fax No. Email ID* TRANSFEREE Name: Postal Address Telephone No. Mobile No.* Fax No. Email ID* Dzongkhag Permanent Village* Gewog* * Address* Thram No.* House No.* REASON FOR TRANSFER (tick the relevant one) * a. Inheritance b. Acquisition c. Incorporation/amalgamation d. Others (specify) Page 67 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form G DECLARATION I hereby declare that the information provided herewith are true to the best of my knowledge and in the event of false or misleading information, I shall be liable for any action under the Mines and Minerals Management Act and Regulations thereof. SIGNATURE* Transferor Transferee Signature Affix legal stamp Affix legal stamp Date: Place: Required documents to be attached: Tick (√) Sl. Appendix Ownership Appendices (field with * sign are mandatory) mark if No. No. enclosed Valid Tax Clearance Certificate* A Transferor No objection from private registered landowner, if 1 (Existing B applicable Lessee) Board resolution for the sale/ownership transfer (if C company) Evidence of experience in mine operation* E Description of finance capability with evidence* F Copy of CID in case of individuals/license/company G 2 Transferee of incorporation* A copy of household information (family tree) issued by MoHCA for an individual or proprietor of a H licensed firm* Number of mines in hand and application under I process, if applicable Page 68 of 89 Mines and Minerals Management Regulations 2022 Annex 1 - Form H(i) For Official Use Application ID No. Date Annex 1 - Form H (i) (Half-yearly Performance Evaluation) (Section 55) DETAILS OF MINE (fields with * sign are mandatory) Name of the mine* Lessee* Place* Nearest village* Location* Gewog* Dzongkhag* Date of evaluation* PERFORMANCE EVALUATION* Average Parameters Weightage Remarks Score (%) Mine Operation 40 Environmental Management 25 Occupational Health & Safety 10 Employment (national) 5 Compliance to Obligation, 20 Instruction and Order Total 100 The performance score of ……………………………………………… Mine for the first/second (tick) half in year…………………………. is Sl. No. Category of rating Total score Tick (Ö) mark 1 Outstanding 80% and above 2 Very Good 70 to 79% 3 Good 60 to 69% 4 Average 50 to 59% 5 Below Average Below 50% Page 69 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form H(i) Recommendations: Evaluator 1 Evaluator 2 Evaluator 3 Evaluator 4 Evaluator 5 Regional Coordinator (Chairman): Note: To evaluate the performance of a mine, the committee may use mines monitoring tool Page 70 of 89 Mines and Minerals Management Regulations 2022 Annex 1 - Form H (ii) For Official Use Application ID No. Date Annex 1 - Form H(ii) (Annual Performance Evaluation) (Section 55) DETAILS OF MINE (fields with * signs are mandatory) Name of the mine* Lessee* Place* Nearest village* Location* Gewog* Dzongkhag* Date of evaluation* PERFORMANCE EVALUATION Parameters Weightage Average Score (%) Remarks Mine Operation 30 Environmental Management 15 Occupational Health & Safety 10 Taxes and Levies 10 Corporate Social Responsibility 5 Average of Half Yearly 25 Performance Evaluation Rating Innovation and Technology 5 TOTAL 100 The performance score of ……………………………………………………………. Mine for the Year …………………………. is Sl. No. Category of rating Score Tick (Ö) mark 1 Outstanding 80% and above 2 Very Good 70 to 79% 3 Good 60 to 69% 4 Average 50 to 59% 5 Below Average Below 50% Page 71 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form H(ii) Directives to the Regional Office: Directives to the Lessee: Evaluator 1 Evaluator 2 Evaluator 3 Evaluator 4 Evaluator 5 Head, Mining Division (Chairman): Page 72 of 89 Mines and Minerals Management Regulations 2022 Annex 1 - Form H(iii) For Official Use Application ID No. Date Annex1 - Form H (iii) (Final Performance Evaluation) (Section 89) DETAILS OF MINE (fields with * signs are mandatory) Name of the mine* Lessee* Place* Nearest village* Location* Gewog* Dzongkhag* Date of evaluation* PERFORMANCE EVALUATION Average Parameters Weightage Remarks Score (%) Overall operation and management 30 of the mine Compliance to law 15 Employment (Bhutanese) 5 Corporate Social Responsibility 5 activities Quality of progressive restoration and post mine reclamation or 10 restoration* Value addition/domestic sale 5 Taxes and levies 10 Average of Annual Performance 20 Evaluation Rating TOTAL 100 *The criteria shall be not applicable in case of transfer and where the Lessee is intending to renew the lease. Page 73 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form H(ii) The performance score of …………………(Lessee)…………………………. operating the ….…… Mine from the period ……………. to …………… is Tick (Ö) Sl. No. Category of rating Score mark 1 Outstanding 80% and above 2 Very Good 70 to 79% 3 Good 60 to 69% 4 Average 50 to 59% 5 Below Average Below 50% Remarks: Evaluator 1 Evaluator 2 Evaluator 3 Evaluator 4 Evaluator 5 Director (Chairman): Page 74 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form I For Official Use Application ID No. Date received Annex 1 - Form I (Notice of Accident) (Section 158) PARTICULARS OF THE ACCIDENTS* Date and hour Place and Number of person (s) of accident location in Seriously Cause of the accident occurrence the mine Killed injured PARTICULARS OF THE INJURIES, FATALITIES, ETC.* Nature of injury and CID Card Position/Desi Gende Name of person (s) Age if fatal, No. gnation r cause of death Killed 1. 2. 3. Injured 1. 2. 3. Date: (Signature) Name and Designation: CC:

1. Dzongdag, Dzongkhag Administration, ......................................

2. Regional Coordinator, ........................................ Region, DGM Page 75 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form J For Official Use Application ID No. Date received Annex 1 - Form J (Notice of Opening/Reopening of Mine) (Section 79) DETAILS OF THE MINE (fields with * sign are mandatory) Name of the mine* Lessee* Postal Address Telephone No. Mobile No.* Fax No. Email ID* DETAILS OF OPENING/REOPENING OF THE MINE: Date of opening/reopening, from* Validity of Environmental Clearance* Date: Signature Name* Designation* Page 76 of 89 Mines and Minerals Management Regulations 2022 Annex 1 – Form K For Official Use Application ID No. Reference Number Date

Annex 1 - Form K (Mine Closure Notification) (Section 88) The Department of Geology and Mines hereby notifies that all the requirement to formally close the mine allocated vide Lease Agreement Number ……………………………………. dated ……… are complete. The following table provides the details of the mine allocated: DETAILS OF THE MINE (all fields with * signs are mandatory) Name of mine* Lessee* Postal Address Lease Agreement No.* Place* Nearest village * Mine location* Gewog* Dzongkhag* MINE LEASE, LEASE RENEWAL AND TRANSFER HISTORY: Initial lease period: From: To: No. of times From To Lease renewal (if any): Transferor Transferee From To Lease transfer history (if any): Offences (if any) Page 77 of 89 Mines and Minerals Management Regulations 2022 . Annex 1 – Form K TOTAL REVENUE GENERATION License Fee Royalty and Lease rent (auctioned mines Others Total Mineral Rent only) MINE RECLAMATION ERB collected in the joint account: Nu. ERB used by the Department to carry out additional restoration required (if applicable) Nu. The balance ERB in the joint account maintained with BOB is returned vide letter No. Nu. ……………………. dated …. ………….and the account is closed. PERFORMANCE RATING OF THE MINING COMPANY BY THE APPROVAL COMMITTEE OF THE DEPARTMENT BASED ON THE SET OF CRITERIA: Sl. No. Rating Tick Remarks: 1 Outstanding 2 Very Good 3 Good 4 Average 5 Below Average Therefore, all transactions corresponding to the above allocated mine hereby ceases. Date: Director Department of Geology and Mines Copy to: 1. Hon’ble Tengye Lyonpo, Thimphu for kind information; 2. Hob’ble Secretary, MoEA, Thimphu for kind information; 3. Hon’ble Secretary, NLCS, Thimphu for kind information 4. Hon’ble Secretary, NECS, Thimphu for kind information; 5. Dzongdag, Dzongkhag Administration ……………………. Dzongkhag for information; 6. Director, DRC, MoF, Thimphu for information; 7. Director, DoFPS, Thimphu for information; 8. Regional Director, RoEA …………. Region for information; 9. Gup, Gewog Administration, …………………. Gewog, ……………. Dzongkhag for information; 10. Lessee for information Page 78 of 89 Mines and Minerals Management Regulations 2022 . Annex 2

Annex 2 - Guidelines and Formats for Final Mines Feasibility Study (Section 41) The report shall include at least the information listed below: 1. Salient features It shall be the summary of the project and includes, • Background of promoter; • Location of mine; • Leasehold area; • Total geological and mineable reserve; and • Summary of the report. 2. Market analysis • Size of market and specifications; • Competition in the market; • Import substitution/export potential; • Value addition potential; • Quality control of products; and • Legal and regulatory considerations. 3. Geology and reserve • Brief description of the exploration programme to determine the reserve and quality of the mineral and the geology; • Geological plans and sections showing necessary geological features; and • Detailed findings of the exploration, geological parameters, reserves, quality of mineral, etc. 4. Mine development planning • Determination of pit boundary and the area required for establishment of infrastructural facilities and waste disposal area; • Access road to the mine area and the mining benches; • Pre-production development works including jungle & bush clearance, initial cut and bench preparation to expose the deposit; • Establishment of infrastructure which include plant and machinery, office and residential buildings; and • Provision of ancillary facilities such as power, water, transport facility with and beyond the mine etc. Page 79 of 89 Mines and Minerals Management Regulations 2022 . Annex 2 5. Mine design parameters • Giving justifications for the selection of chosen parameters for, o Bench dimensions; o Blast hole drilling; o Blasting; o Haul road and ramp; o Waste dump; o Final pit configuration etc. • A mine plan and design including the bench parameters, for operation and abandonment of a mine shall take into consideration of the following geotechnical aspects: o The geological structure and its impact on wall stability; o Shear strength of the rock mass and its geological structure; and o Analysis of rain water inflow, surface drainage and groundwater pattern and their impact on wall stability over time; • The maximum vertical height of any quarry bench face is determined with regard to the measures set out above and that an adequate margin of safety is provided for persons working on the bench below the face; • If a bench is, or a series of benches are, left unworked in a quarry operation, the height of the bench faces and the width of the benches is such that so far as is practicable localized failures of such benches can be contained to prevent a hazard to persons working deeper in the pit and that equipment is available to persons at the benches to enable them to make the area safe; • A quarry face shall not be drilled or otherwise worked in a manner, which will create an overhang of the face, and if unconsolidated rock is mined the face and sides must be battered to prevent a collapse; • A quarry face shall not be undercut by the excavation of a slot at the toe or in any other part of the face. 6. Mine production planning. • Year-wise and bench-wise working and production plan giving details of quantity, quality and specification of mineral/rejects/sub-grade mineral and all the consumables; and • Description of the method of operation. Page 80 of 89 Mines and Minerals Management Regulations 2022 . Annex 2 7. Mine plan drawings • Location map in an appropriate scale showing pre-mining landuse in and around the mining lease area and demarcation line of private and state land within the lease-hold boundary; • Topographic map showing the demarcation boundary of the leased area with Geo- Demarcation Pillars coordinates in National Coordinate System (Drukref03); • Layout plans (in a scale not less than 1:5000) showing lease boundary, pit boundary, infrastructure set-up, access road, locations of top soil/reject rocks/sub-grade dumps, explosives magazine, public facilities such as school, hospital etc. and the index map showing the location of the proposed mine in the region; • Pre-production development plan; • The mine plan shall contain all the following features: o Title of the map; o North arrow; o Legend with clear colour coding; o Index map; o Map scale; o Geo-Coordinates of Demarcation Pillars in National Coordinate System (Drukref03); o Map grid with appropriate intervals; o Details of the drawing in a table; o Name of the mine; o Drawing No. and date; o Name of the Lessee; o Lease/demarcated area in acres; o Name of the Geologist (Geology by:); o Name of the demarcating mining engineer (Demarcated by:); o Name of the surveyor (Surveyed by:); o Name of the mining engineer who prepared the plan (Prepared by:) and sign & seal; and o A column with Verified and Approved by- for sign and seal by DGM. • Sections of the plans (at least two sections for each plan including for overburden dumpsite) should be provided in a separate sheet and not with the plans; Page 81 of 89 Mines and Minerals Management Regulations 2022 . Annex 2 • Pre-mining cross-sections at suitable intervals not exceeding 100 meters, along the actual slope of topography with clear plotting of different litho- types • Bench-wise slice plans clearly demarcating different litho-types and grade of mineral in different mining benches; • Year-wise configuration of the mining pit shown on plans and all X- sections clearly marking the litho-types for five years, for the end of lease period and for end of the mine life; • Year-wise configuration of the waste disposal site for five years, for the end of lease period and for end of the mine life; • Ultimate pit configuration on plan and different X-sections; • The scale should be the same as that of plans; o Title of the sheet; o Name of the sections; o Legend with clear colour coding; o Name of the mining engineer who prepared the section (Prepared by:) and sign & seal; and o A column with Verified and Approved by- for sign and seal by DGM. 8. Waste Disposal planning • Select most suitable site giving justification and due consideration to the cost involved; and • Describe in detail the management of waste & tailings, configuration of waste dump and its stability. 9. Manpower • Details of manpower requirement in executive, supervisory, technical and workers category stating their duties, including organisation charts; and • Type of contract work and the contract workers proposed to be involved. 10. Project implementation schedule • It includes the implementation schedule of various activities in the mine starting from project concept to signing of lease agreement to the production stage and closure. 11. Capital cost • It includes pre-production and preliminary costs, cost of equipment and machinery, infrastructure and mine development costs, utilities costs, working capital, etc. Page 82 of 89 Mines and Minerals Management Regulations 2022 . Annex 2 12. Operational cost: It shall include cost for unit operations such as; • Transportation; • Fuel, water and power; • Labour, health, safety and sanitation; • Service, marketing and promotion; • Land compensation, acquisition; • Government and mineral levies; • Waste disposal, environment management and restoration activities; • Financing, depreciation cost; • Corporate Social Responsibility (CSR); • Other cost. 13. Financial Analysis: • Revenue from sales; • Profitability statement; • Cash-flow analysis; • Rate of return; • Payback analysis; and • Break-even analysis. 14. Environment Management Plan • Include Environmental Management Plan approved in the EIA Report by NECS as a Chapter in the FMFS Report; and • Include the estimation of Environmental Restoration Bond (ERB) based on the ERB Estimation Formula (Annex 4 of this Regulations). 15. Additional documents required to be attached • Copies of all the sectoral clearances shall be attached as an annexure to the report. • Undertaking of the Mining Engineer who has prepared the FMFS report. Page 83 of 89 Mines and Minerals Management Regulations 2022 Annex 3

Annex 3 - Registry of Mineral Titles (Section 9) 1. All documents listed below shall be stored by the DGM and made available to any person upon demand within a reasonable time: 1.1. Reference maps of mining lease locations 1.2. Reference maps of exploration programs 1.3. Index of lessees under sections 10 and16 of the MMMA 1.4. Index of approved mineral prospectors under section 15 of the MMMA 1.5. Mining lease agreements with registered numbering system 1.6. Final Mine Feasibility Study reports, including the Environment Management Plan, the Mine Restoration Plan under sections 22-25 of the MMMA 1.7. Updated mining plans and sections under sections 34-35 of the MMMA. 1.8. Surfaces right clearances and permissions 1.9. Annual reports under sections 37(viii)-(ix) of the MMMA 1.10. Copies of all accident reports under section 37(vii) and section 38 of the MMMA 1.11. Copies of applications and orders related to the transfer of mining leases 1.12. Approvals 1.13. Notices and orders to lessees 1.14. Inquiries to lessees 1.15. Surrender notices 1.16. Termination notices 1.17. Fees, rentals, levies, subsequent payments 1.18. Royalties charged and royalty payments 1.19. Any other records as may be prescribed by the Director Page 84 of 89 Mines and Minerals Management Regulations 2022 Annex 3 2. Fees 1.20. The Registry may demand a reasonable fee to cover the cost of duplicating requested documents 3. Record storage Legal status of records: 1.21. Duplicates of originals 1.22. Copies of originals 1.23. Electronic storage of original 4. Confidentiality 1.24. The applicant or lessee may request that specified information be kept confidential if dissemination would cause substantial harm to their commercial interests. 1.25. The DGM may refuse to provide information to the public if it determines that it is confidential. 5. Delivery of notices and documents The following documents shall be handed over in person or through a registered mail or an email: 1.26. Applications for mining leases and permits 1.27. Applications for mineral exploration permit 1.28. Final Mine Feasibility Study reports 1.29. Applications for transfer of mining leases 1.30. Updated mining and environmental management plans 1.31. Bi-annual report 1.32. Annual report 1.33. Notices for temporary closure or re-opening of mines 1.34. Copy of the correspondences endorsed by the Director Page 85 of 89 Mines and Minerals Management Regulations 2022 Annex 4

Annex 4 - ERB Estimation Formula (Section 71) The method of calculating ERB shall be based on the surface area coverage, overburden waste reflected in the FMFS report and the actual production of mineral. Environmental Restoration Bond (ERB) = Ax + By + Cz Where, A = Surface area (Hectare) B = Overburden/inter-burden waste (m³) C = Production (metric tonnes) The total surface area shall be the total demarcated mining area by the DGM. The value of x shall be: = Nu. 50000/hectare for all talc mines = Nu. 20000/hectare if surface area is < 10 hectares = Nu. 15000/hectare if surface area is >10 but < 20 hectares = Nu 10000/hectare if surface area is > 20 hectares The value of y and z shall be Nu. 5 and 4 respectively. Mode of Collection • The ERB amount from surface area coverage and overburden waste shall be payable prior to the commencement of development of the mine. • The ERB amount from production shall be payable on the actual quantity of mineral despatched in advance. The values of x, y and z shall be subject to revision from time to time. Page 86 of 89 Mines and Minerals Management Regulations 2022 Annex 5

Annex 5 - Schedule of Royalty and Minerals Rent for Domestic Use (Section 63) Unit of Royalty Mineral Mineral Grade measure (Nu.) Rent (Nu.) Dolomite All grade Metric ton 40.00 10.00 Limestone/ Marble/Crystalline All grade Metric ton 34.00 8.50 Limestone High grade Quartzite Metric ton 30.00 5.00 white Iron ore All grade Metric ton 20.00 5.00 Talc All grade Metric ton 40.00 10.00 Lumps & Metric ton 2.20 0.55 Granite boulders Slabs/Tiles Square feet 1.00 0.25 Shale Pink & Green Metric ton 34.00 8.50 Clay All Metric ton 2.20 0.55 Roofing Square feet 0.04 0.01 Tiles/slabs Slate Powder Metric ton 2.20 0.55 Gypsum All grade Metric ton 50.00 5.00 Coal All grade Metric ton 50.00 5.00 Construction All grade Metric ton 2.20 0.55 Material Page 87 of 89 Mines and Minerals Management Regulations 2022 Annex 6

Annex 6 - Time Limits Sl. No. Action Time Limit 1. Scrutiny of the application 3 days from the date of submission 2. Conduct of Pre-feasibility Study 1 week Convey the decision of Technical 1 week from the date of conduct of 3. Committee on application and PFS Technical Committee meeting report Review and sharing of comments 4. for draft Detailed Geological or 2 weeks after receipt of draft reports Exploration report Approval of Detailed Geological 3 days from the date of submission of 5. or Exploration report revised report 2 days after receipt Preliminary Intimate the applicant to undertake 6. Approval from NLCS or approval of FMFS report and EIA Detailed Geological Report Review and sharing of comments 7. 2 weeks after receipt of draft reports for draft FMFS report 3 days from the date of submission of 8. Approval of FMFS report revised FMFS report Forwarding of application for 9. 1 day after Action 8 Environmental Clearance 2 weeks after the receipt of draft 10. Approval of updated FMFS report reports Issue Compliance Order as per 1 week from the receipt of non- 11. Section 119 of the MMMR 2022 compliance report 1 month from the date of conveying the 12. Appeal against the decision decision Page 88 of 89 Mines and Minerals Management Regulations 2022 Annex 7

Annex 7 - List of Eligible Minerals and Requirement of Value Addition Value addition Sl. No. Mineral Minimum Remarks Potential areas requirements 1. Animal feed 2. Marble mosaic tiles Crystalline 3. Marble tiles/slabs Animal feed 1. Eligibility and 1 Limestone/ 4. Wall putty size size of the Marble 5. Limestone/crystalline mine shall be powder, etc. determined by 1. Cement production Limestone 2. Lime capacity of 2 Lime the proposed 3. Clinker plants; 1. Plaster of Paris Plaster-of- 3 Gypsum 2. Gypsum board Paris 2. RGoB shall 1. Refractory bricks levy lower 2. Ferro-silicon royalty for in 4 Quartzite Tiles country value 3. Ceramics 4. Tiles addition upon approval by Powdering to the 5 Talc Talcum powder minimum 100 Parliament. mesh size 6 Iron Ore Iron Sponge iron Note: 1. The potential areas listed under each mineral is just indicative. Any other value addition proposals fulfilling the minimum value addition criteria shall be accepted. 2. Any existing mines extracting minerals listed above shall be subjected to value addition requirements at the time of the lease renewal. Page 89 of 89 Department of Geology and Mines Ministry of Economic Affairs PO Box No. 173 Thimphu-11001 Telephone No.: +975-2-322879/323096 www.moea.gov.bt / www.dgm.gov.bt