Nepal's new mining bill grants government broad powers over resource management

Nepal's government has put forth the Mining and Mineral Resources Bill 2026, aiming to establish a clear framework for managing the nation's mineral wealth under its federal structure. The proposed legislation seeks to replace the outdated Mines and Minerals Act of 1985, which predates the country's current federal democratic republican system. The bill introduces distinct provisions for construction minerals, strategic resources, and radioactive materials, intending to make their conservation, exploration, and extraction more systematic, scientific, and sustainable.

However, a significant aspect of the bill is its extensive reliance on future regulations, directives, procedures, or standards to define critical operational details. Throughout its 63 sections, the phrase "as prescribed" or similar wording appears in 38 instances. This approach effectively allows the government to determine crucial elements of mineral governance after the bill becomes law, rather than embedding them directly in the legislation.

Section 5 of the bill exemplifies this delegation, stating that while the federal government holds primary authority for mineral extraction, provincial and local governments can extract specified minerals if the federal government designates them through a Nepal Gazette notice. Furthermore, other matters related to mineral extraction are left to be determined "as prescribed." This arrangement acknowledges the constitutional division of powers, which places mining under the federal list but also includes it among concurrent powers for all three levels of government.

The bill's structure suggests a strategy where the federal government retains substantial control over mineral governance. Provincial and local entities would need federal authorization to extract specific minerals, and many operational details would be shaped by subordinate legislation. This approach has led to concerns that key powers regarding mineral resource management remain concentrated with the federal government, potentially limiting the autonomy of provincial and local bodies in exploiting resources within their jurisdictions.