Updated on 15 May 2020
Krishna P. Kaphle,
Former Superintending Geologist, Department of Mines and Geology, Kathmandu, Nepal
Nepal lies in the central part of 2500km long Himalayan belt. Almost 83% of Nepalese territory is mountainous. It is an underdeveloped, landlocked country situated in between China in the north and India in the south. Nepal is very rich in vast natural resources such as minerals, water, forest, medicinal herbs and varieties of agricultural products. For the economic development of the country exploitation and proper use of such valuable resources, especially mineral resources is extremely important. The mountainous region and the geological environment therein are suitable for metallic, nonmetallic and energy/ fuel mineral deposits as well as huge amount of construction materials, dimension and decorative stones. Continues efforts are required to find more mineral deposits in the unexplored virgin areas, early exploitation and sustainable development of known resources for the rapid economic growth of the country, provide job opportunities, and upgrade the quality of life and overall benefit to its people.
Minerals are the nonrenewable natural resources and hidden treasure of a country. They are mined and used in different forms for various purposes by the people since prehistoric time. Sustainable development of such resources play vital role to industrial development, employment generation, minimize dependency on foreign goods and services, save foreign currency, control trade deficit, strengthen the economy of the country and contribute substantially to national GDP. Systematic geological mapping, mineral exploration and detail investigation of mineral were started since the establishment of Nepal Bureau of Mines in 1961 (2018BS) and Nepal Geological Survey in 1967 (2024BS). Both of them were amalgamated by the Government of Nepal (GON) in 1977 and renamed it as Department of Mines and Geology (DMG). Mineral exploration activities were in peak during 1969 – 1984 when DMG and UNDP funded projects (1969 - 1972), Mineral Exploration Development Project (MEDP, 1974 -1978) and follow up works by DMG were in action. All these investigation/ exploration activities in the past were able to delineate quite a few prospective areas and also able to identify some economic and sub-economic mineral deposits in different parts of the country (Fig.1). Systematic petroleum exploration by DMG was started in 1979. First Airborne Magnetic survey over 48000sq.km area covering Terai and Siwalik belts was conducted with the help of IDA/ World Bank. The result of this survey was encouraging and the GON has established Petroleum Exploration Promotion Project (PEPP) in 1984 to promote and monitor the exploration works in the country. DMG/ PEEP has divided the area into 10 prospecting blocks for petroleum exploration in southern part of the country covering the whole Terai plane and major parts of Sub-Himalaya (Siwalik foot hills). The Government of Nepal invited foreign oil companies by opening for bidding exploration acreage in 1985 for the first time to explore petroleum in Nepal. Five foreign companies showed their interest and signed agreement with GON in different years (time) but except Shell Nepal BV none of them did extensive exploration work to find out the petroleum reserve in Nepal. All of them left Nepal when GON cancelled their petroleum agreements. Now the GON should understand the importance of the minerals and petroleum resources and give high priority in exploration, evaluation and sustainable development of industrial minerals, high price metals, base metals, precious and semiprecious stones, fuel minerals and petroleum and natural gas and mine/ exploit them at the earliest. GON must invite potential national and international investors/ companies to invest in mineral and mining sector as well as petroleum sector to establish mineral and petroleum industries by giving more incentives to attract them in the initial 3 to 5 years. Since last few years just over 550 private investors have shown their interest and involve in mineral exploration and mining activities. In FY 2075/076BS (2019) they obtained 388 prospecting licenses to explore 16 minerals and 143 mining licenses to mine 17 mineral commodities from DMG. Mineral exploration activities by DMG as well as by private sectors are going on but in very slow speed. Most of the mining license holders are reluctant to develop the mines (except some cement grade limestone) timely and properly by hiring trained technical manpower, purchasing suitable mining equipment and creating better mining environment. Most of the mines are in development stage with very slow progress and only some limestone and few dolomite, talc, calcite, marble, granite, quartzite, slate, coal, red clay, and semi-precious stones mines are in operation whereas magnesite, lead, zinc, copper and iron ore mines are still unproductive. Based on these mineral raw materials quite a few cement industries and very few marble, dead burnt magnesite (DBM), talcum powder, gemstone cutting & polishing, agri-lime, porcelain, pottery and rock slab cutting and polishing industries have been established but most of them are not in regular production and some of them are already closed due to lack of infrastructures, trained technical manpower, suitable mining equipment, unavailability of raw materials, haphazard mining activities, environmental issues raised by local people, contradiction in Mines and Mineral Act, Forest Act and Local Governance Act related to ownership of natural resources, as well as many demands from the local people. Mineral resources and petroleum play vital role in the industrial development and it could contribute substantially (>15%) in the national GDP.
Nepal has over 200 years long history of indigenous mining activities. Small scale historical iron, copper, lead, zinc, cobalt, nickel mines and placer gold panning in the major rivers and many slate, quartzite, dolomite and limestone quarries were operational in many districts. Old working pits, adits, smelting places, scattered slag and remnant of mine materials stand as solid proofs of such mining activities in the past. In many cases the name of the village is derived after the particular mines e.g. Taba Khani, Falam Khani, Shisa Khani, Sun Khani etc. Before 1951(2007BS) Nepal was one of the exporter of iron and copper to Tibet and cobalt to India. A gun factory based on Thoshe iron deposit was established in 1921 at Thoshe Megchan in Ramechhap (Rana, 1965). Its remnants still exist there. But after the change in the government in 1951 such mining activities were gradually closed because of change in the policy of new government, unavailability of charcoal for smelting, technical difficulties in mining at depth etc. Therefore, reassessment and evaluation of such deposits/ mines by DMG and/ or by private sector are extremely warranted for further exploration and mining. One of the examples is Thoshe iron deposit (old working mine) which was reassessed by DMG (Kaphle & Khan, 1996, 2006) and later explored in detail by N & C Minerals Pvt. Ltd. It has prepared a mining plan and obtained the mining license from DMG but it is still unable to develop mine and exploit the iron ore due to many complexities in getting permission from Department of Forest, lack of infrastructures, support from central and local government, huge amount of investment required to purchase mining equipment, hire well trained technical manpower and sustainable mine development without any environment damage and also decrease in international price of iron ore. Currently the company is in the process of mine development to exploit iron ore in near future. Now GON/ DMG is in the process to mine Dhauwadi – Pokhari hematite ore deposit in Nawalparasi for iron and also continuing petroleum and natural gas exploration in Dailekh.
General Geology and Mineral Resources
Nepal occupies the central part (one third) of east – west extending Himalayan range which is comparatively a younger mountain. Geology of Nepal is very complex because of continues geodynamic process in the Himalayan region that resulted many thrusting, faulting, folding, and suffered from magmatism and metamorphic events in the geological past. Geologically Nepal Himalaya can be simply divided into five distinct morpho-geotectonic zones separated by four prominent linear structures like Main Frontal Thrust (MFT), Main Boundary Thrust (MBT), Main Central Thrust (MCT) and South Tibetan Detachment System (STDS), from south to north. From mineral resources point of view, the southernmost Terai Plain (northern fringe of Indo Gangetic plain) area is potential for gravel, sand, ground water, and underlying Siwalik and Pre-Siwalik rocks below the Quaternary sediments at depth consists of stratigraphic and structural traps suitable for petroleum and natural gas reserves. The Sub Himalaya (Siwalik Foothills/ Churia Range including Dune Valleys) is the potential area for construction materials, radioactive minerals, minor amount of low grade coal seams, and possible reservoir rocks and structural traps for petroleum, natural gas. Similarly, the Lesser Himalaya (Mahabharat Range including Midland/ Valleys) is promising for metallic minerals mainly iron, copper, lead, zinc, cobalt, nickel, tin, tungsten, molybdenum, gold, uranium rare metals and so on; and industrial minerals like magnesite, limestone, dolomite, talc, phosphorite, bauxite, clay, kaolin, graphite, mica, quartz, silica sand and gemstones; fuel minerals such as coal, lignite, peat, methane gas, petroleum and natural gas; hot springs; radioactive minerals; and voluminous construction materials; crushed gravel as well as river boulders, gravel and sand etc. Some of the areas in Higher Himalaya are quite promising for precious and semiprecious stones, marble and metallic minerals like lead, zinc, uranium, gold, silver etc. Towards far north the Tibetan Tethys Zone (Inner Himalaya) is prospective for limestone, dolomite, gypsum, salt (brine water), radioactive minerals and natural gas. Because of difficult mountain terrain, complex geology, lack of infrastructures and financial constrain, exploration and exploitation of these mineral resources still challenging.
Mine Administration and Licensing System
In Nepal, all the mineral resources that occur in the country are owned by the state. DMG under the Ministry of Industry (MOI) is the responsible government organization which not only conducts systematic geological mapping, mineral exploration activities throughout of the country and petroleum exploration in selected areas but also administrates and fully exercises the Mines and Mineral Act 2042BS (amended in 2050BS) and Regulation 2056BS with amendments in 2060, 2072 & 2073BS and Nepal Petroleum Act 2040BS (1983) and Petroleum Regulation 2041BS (1985) with amendments in 1985, 1989, 1994 & 2018. Under these existing Rules and Regulations DMG issue both Prospecting and Mining Licenses and sign petroleum agreements with the interested national and international investors/ companies and regularly inspects and monitors the prospecting and mining activities carried out by the lease holders. DMG had issued about 121 and 142 mining licenses for 16 and 18 mineral commodities and about 365 and 388 prospecting licenses in FY 2074/75BS and 2075/76BS respectively. But only slightly more than half of them are in mine operations/ production and the rest still in mine development stage.
Mineral Deposits, Mines and Their Present Status
In course of time Geological investigations and mineral exploration activities carried out mainly by DMG since its establishment in 1961 till present and partly by DMG/ UNDP (1969 - 1972), UNDP/ DMG/MEDP projects (1974 - 1978) and Geological Survey of India (GSI, 1964-1968) and very few private entrepreneurs were successful to identify metallic, nonmetallic and fuel mineral deposits/ prospects/ occurrences and categorized as economic, subeconomic and noneconomic deposits of more than 66 mineral commodities in Nepal (Fig.1. 2, 3 & 4). Based on some economic deposits DMG is able to promote few mineral based industries like cement, agri-lime, marble, talc, dead burnt magnesite, zinc-lead, coal, gemstones etc. Few small to medium scale mines of limestone, magnesite, marble, talc, coal, peat, clay, salt, mica, quartz crystals, semiprecious and precious stones, dimension/ paving stones, roofing slates are in operation by the private entrepreneurs after obtaining the licenses from DMG. There are over 48 limestone quarries/ mines from which limestone are supplied to different cement industries. 7 gemstone (tourmaline, kyanite, quartz crystals), 1 iron, and few talc, coal, marble, red clay, calcite, quartzite, dolomite mines are in production (www.dmgnepal.gov.np). Few gem industries which do only cutting and polishing of semiprecious and precious stones from Nepal and abroad are established. Most of the minors they sold their raw materials to different industries. Construction aggregates, sand, gravel, dimension stone, decorative stones, paving stones and roofing slates are the other important mineral resources which have high demand for infrastructural development works are locally mined. Metallic ore minerals of iron, copper, lead, zinc, cobalt, nickel, tin, tungsten, molybdenum, and placer/ primary gold are also known from different parts of Nepal but they are not yet mined systematically. Previously two placer gold mining license were issued to private sector but they did not show any production for long time and closed. N & C Minerals Pvt. Ltd. a private company obtained mining license to mine Thoshe iron deposit from DMG but not yet in production. Similarly another Pvt. Co. has obtained a mining license to mine copper ore from Bamangaon polymetallic deposit but its progress is very slow even in preparation of mine plan and mine development. Recently, DMG is in the process to mine Dhauwadi – Pokhari hematite deposit in Nawalparasi. DMG has already proved 310 million m3 methane gas reserve in Kathmandu valley which can be utilized for house hold use to replace imported propane gas. Major and important mineral prospects are briefly described below.
DMG has also started systematic petroleum exploration work since 1979. Natural gas and oil seepages in Padukasthan, Sirsasthan, Navisthan etc. in Dailekh and gas seeps in Muktinath in Mustang are the direct signature of the existence of hydrocarbon/ oil and natural gas in Nepal. In addition to that, shale beds of Lakharpata, Gondwana and Surkhet Group are found to contain 2 – 20% Total Organic Carbon (TOC) which is another strong evidence of petroleum occurrences. In regional context, existence of petroleum in Potwar Basin in Pakistan in the west and in Aasam Basin in India in the east are other positive indicators that support to high possibility to find out similar oil reserve in the similar geological environment/ lithological horizons in Nepal. Considering these evidences geological, aeromagnetic, gravity and seismic survey covering 48,000km2 area was conducted by DMG in 1978-79 with the help of IDA/ World Bank. Petroleum Exploration Promotion Project (PEPP) was established under MOI/DMG in 1982 to promote and monitor the exploration works. Petro-Canada and Compagnie General De Geophysique (CGG) did seismic survey over 3000km2. Hunting Geology and Geophysics Ltd. conducted photogeological study over 60,000km2 area covering Terai and the Siwalik. These studies helped to divide the southern part of the country covering the Terai plane and Siwalik Foothills into 10 petroleum exploration blocks like Block.1 (Dhangari), 2 (Karnali), 3 (Nepalgunj), 4 (Lumbini), 5 Chitwan), 6 (Birgunj), 7 (Malangwa), 8 (Janakpur), 9 (Rajbiraj) and 10 (Biratnagar) (Fig.5), each with approximately 5000km2 area www.petroleumnepal.gov.np. The GON/ DMG/PEPP opened for bidding exploration acreage in 1985 for the first time and invited foreign oil companies to explore petroleum in Nepal with a view to promote petroleum exploration and establish petroleum industries. First of all, Shell Nepal B.V/ an oil company from Netherlands and Triton Energy Corp, USA (19861990) jointly acquired the block-10, Biratnagar to explore petroleum. It has conducted detail exploration by gravity and seismic survey (covering 2000 line km.) and also did petroleum exploration drilling up to a depth of 3520m to test hydrocarbon potential in this block. But the hole appeared dry and then the company left Nepal for good in 1990. After that, Texana Resources Co. (USA) (1998) acquired block-3 (Nepalgunj) and 5 (Chitwan). This Co. did only preliminary field study and some laboratory tests of the selected samples. But the work was not satisfactory as per the agreement. Similarly CAIRN Energy PLC (UK, 2004) leased five blocks as Block no.1 (Dhangari), 2 (Karnali), 4 (Lumbini), 6 (Birgunj) and 7 (Malangwa). It had established an office in Kathmandu and also did some field investigations and laboratory tests of few possible source and reservoir rocks samples but most of the time they remained reluctant to conduct extensive field works, as a result there was no significance progress in petroleum exploration sector in spite of government’s high priority. GON cancelled their lease contract and both Texana Resources and Cairn Energy left Nepal in 2014 without any finding. In 2012/2013, An Arabian oil companies named as Emirates Associated Business Group (EABG), UAE leased block 8 & 9 and USA based BBB Champions oil co. Inc. leased block-10 to explore petroleum in Nepal, but they did not start exploration works seriously and left Nepal within less than two years. Recently GON/ DMG/PEPP with the technical cooperation of People’s Republic of China has started detail exploration of petroleum and natural gas in Dailekh. So far seismic survey (200 line km in 400sq km area supported by magneto telluric survey and collection of source rock samples and soil samples are completed. Laboratory investigation and chemical analysis of the samples and interpretation of seismic data are in process in China. Preliminary field data appear interesting (PEPP, Tripathi, 2019).
(A) Metallic Minerals
Metallic minerals are very much used in various purposes in our day to day life. They are extracted from their respective ores. Gold, platinum, silver, copper and mercury also occur as native state. A numbers of metallic ore minerals are known to exist in different parts of Nepal but only the important ones are briefly described here.
Iron (Fe) is the principal metal which is used extensively in infrastructure development works, and to manufacture steel, heavy machinery equipment, arms, agricultural tools etc. Iron ores like magnetite (Fe3O4), hematite (Fe2O3), limonite/goethite (FeO(OH).nH2O) and siderite (FeCO3) occurrences/ prospects/ deposits are known to exist in more than 88 localities. Some of these ores were extensively mined and smelted in different parts of Nepal for more than 100 years till 1951 (2007BS) but none of these mines are in operation since then. The well known iron ore deposits are Phulchoki (Lalitpur), Thoshe (Ramechhap, Fig.2A), Labdi Khola (Tanahun), Jirbang (Chitwan), Dhauwadi - Pokhari (Nawalparasi), Falamkhani/ Dhuwakot (Parbat), Bhedikhor and Lukarban (Baglung), Purchaundi/ Lamunigad (Bitadi), Dahabagar, Kachali, and Ekghar/ Khanigaon (Bajhang). Iron prospects and old workings are also known from different parts of Baitadi, Bajhang, Jajarkot, Rolpa, Surkhet, Myagdi, Baglung, Parbat, Chitwan, Ramechhap, Okhaldhunga and Taplejung districts (Kaphle, 2018). Phulchoki iron deposit still remained untransformed into commercialization due to its location in the environmentally sensitive area and also shortage of power like electricity and unavailability of good quality coal in Nepal. Thoshe iron deposit was mined in small scale during Rana's regime for more than 100 years till 2007BS. But it was totally stopped after 2007BS. DMG (Kaphle & Khan 1996. 2006) did the assessment of this prospect and calculated geological reserve of about 10.5 million ton iron ore. Further extension of the area and detail exploration by N & C Minerals Pvt. Ltd. has estimated about 15.9million ton iron ore with an average grade 45.3%Fe (Kaphle, 2011). DMG issued 7 prospecting and 4 mining licenses to the private/ public companies in FY 2018 (DMG, Annual report, 2019). DMG is in the process to mine Dhauwadi – Pokhari hematite ore deposit in Nawalparasi.
Copper (Cu) is another very important metal which is mainly used in electrical industries for the production of electrical and electronic equipment/ goods, copper wires, coins, crafts, making alloys, containers and utensils for household purposes. It was mined traditionally in Nepal since historic time but at present there is no running copper mine as such. The common copper ore found in Nepal are chalcopyrite (CuFeS2), malachite (CuCO3(OH)2), azurite (Cu3(CO3)2(OH), covellite (CuS), cuprite (Cu2O), bornite (Cu5FeS4), and chalcocite (Cu2S). Copper ore deposits/ prospects/ occurrences are known from more than 107 localities in the country. Small scale copper mines were in operation in Gyazi (Gorkha), Okharbot (Myagdi) and Wapsa (Solukhumbu) till 1995 and they were able to produce 20 to 50mt finished copper per year. Other copper prospects/ deposits like Kalitar (Makwanpur), Dhusa (Dhadhing), Wapsa (Solukhumbu), Bamangaon (Dadeldhura, Fig.2B, Bhut Khola (Tanahun) Fig.2C), Khandeshori - Danfechuli/ Marma (Darchula), Pandav Khani (Baglung), Baise Khani (Myagdi), Ningre (Myagdi), Mul Khani (Gulmi), Sikpashore (Dolakha), Kurule (Udayapur), Chhirling Khola (Bhojpur), Janter Khani (Okhaldhunga), Siddhi Khani (Ilam) are the major ones. Many scattered old workings are also known from different parts of Darchula, Bajhang, Bajura, Parbat, Baglung, Myagdi, Gulmi, Tanahun, Gorkha, Makwanpur, Kavre, Ramechhap, Okhaldunga, Dhankuta, Solukhumbu, Ilam and Taplejung districts. 1 mining license and 7 prospecting licenses for copper have been issued by DMG (DMG, Annual report, 2019). At present not a single copper mine is in operation/ production.
Zinc (Zn) and Lead (Pb): Occurrences/ prospects/ deposits of lead and zinc are reported from more than 57 localities in different parts of Nepal. In most cases their ore minerals like Sphalerite (ZnS) and Galena (PbS) are associated and occur together like in Ganesh Himal area (Rasuwa), Phakuwa (Sankhuwasabha), Labang- Khairang (Makwanpur), Pangum (Solukhumbu), Salimar valley (Mugu/ Humla), Daha Gulzar and Rani Shikhar (Darchula), Phulchoki (Lalitpur), Hatti Lekh (Palpa), Sisha Khani and Kandebas (Baglung), Dhuwakot (Parbat), Barghare (Makwanpur) and Khola Khani (Taplejung). Most of them are known as old workings. Among them, only Ganesh Himal Zinc - Lead deposit (at Lari, Serkaping, Suple, Poktanzo) have been explored in detail. Lari deposit is an economic deposit of about 2 million mt. ore with combined grade 13% Zn+Pb with minor Ag and Cd. An underground mine has been development by Nepal Metal Company long time before but the deposit still remained unexploited due to its remote location without road approach, harsh climate, complex geology, small tonnage in spite of its high grade, and other technical and financial reasons. However, detail exploration and evaluation of nearby Serkaping, Suple and Poktanjo Pb+Zn prospects could also be economic deposit and mine together with Lari deposit. DMG issued 1 zinc and 3 lead mining license and 1 zinc and 2 lead prospecting license in 2018 (DMG, Annual report, 2019) to the private investors but so far none of them are in operation and production.
Cobalt (Co) prospects are not as common as iron, copper, lead and zinc in Nepal. Cobaltite (COAsS) and erythrite (CO3(AsO4)2.8H2O are the two common ores of cobalt. In vein type deposit it occurs with nickel minerals. 70% Co comes from Congo. Few old workings and test mining for cobalt were carried out long time before from Netadarling & Tamghas (Gulmi) and Samarbhamar in Arghakhanchi districts and the ore used to export to India. They are also recorded from Lamadanda (Dhadhing), Nangre (Kavre), Bhorle (Ramechhap) and Bauli Gad (Bajhang) districts. Reassessment by detail exploration and evaluation of these prospects is required to confirm the grade and tonnage of the deposits. There is no cobalt mine in operation at present. It is one of the important metal in modern age. It is mostly used to make battery for electric vehicles and pigment to produce blue glass and in polishing diamond. Both Co and Ni are harmful to health to develop cancer, chronic bronchitis etc.
Nickel (Ni) is a silvery white shining metal with a slight golden tinge. Its occurrences are reported from few polymetallic deposits like in Bamangaon (Dadeldhura), Bering Khola – Sunmai (Ilam), Bauligad (Bajhang), Khopre Khani (Sindhuli) and old workings from Nangre (Kavre), Bhorle (Ramechhap) and Ningre (Kavre) areas (Sharma,1966). The main ores of this metal are niccolite (NiAs) and pentlandite (Fe,Ni)9S8) which are mainly associated with chalcopyrite, pyrrhotite and pyrite. Follow up and detail exploration is required to confirm the overall tonnage and grade of these known occurrences. At present not a single nickel and cobalt mine is in operation. Nickel and chromite both are used in chrome steel and other alloys to withstand high temperature and corrosion. It is also used in batteries. Nichrome is used for resistance in electrical heating equipment.
Gold (Au) is a precious attractive yellow metal which has very good market price worldwide. Its present price in world market is increasing since last few months and now reached around US$1725/ounce. It is widely used in making coins, ornaments, jewelry, dental appliances, electroplating, metal coating and many other purposes. In Nepal alluvial/ placer gold are frequently wined by local dwellers (Botes) from the river gravel/ sediments deposited by the major rivers like Mahakali, Chamliya, Jamari Gad, West Seti, Karnali, Bheri, Rapti, Lungri Khola (Fig.3A), Phagum Khola, Kaligandaki (Fig.3B), Myagdi Khola, Modi, Madi, Marshyangdi, Trishuli, Budhigandaki, and Sunkoshi Rivers along their high and low flood plains as well as in their terraces (Kaphle, 1996). Placer gold in these rivers are mainly derived from higher Himalayan region (Sthapit & Kaphle, 2005). Primary gold in-situ occurrences are known from Lungri Khola area (Joshi, 1991, in Damphutar, Dokadhunge, Phuliban, Sherma, and Gam (Rolpa); Bangabagar, Gorang & Jamari Gad (Baitadi); Bamangaon (Dadeldhura), Khandeshori (Darchula), Upper part of Bauligad (Bajhang) and rarely in Bering Khola – Sunmai area (Ilam). Gold is generally found in association with silver and many other sulphide ores (Chalcopyrite, Arsenopyrite, Pyrite) mainly in hydrothermal quartz veins, quartz sulphide veins and in auriferous quartzite. Exploration works in the past have shown high possibility to find primary gold in the Higher Himalayan region. Therefore, all these known occurrences must be well evaluated to confirm the deposits. 2 mining licenses and over 30 prospecting licenses for placer gold exploration have been issued by DMG in FY2012/13 but at present not a single license is renewed/ issued.