The mining sector in the country is rapidly emerging as one of the country’s key economic growth engines, with mineral production surging by more than 70 percent over the past two years and the government embarking on its first comprehensive National Mineral Exploration Project to unlock the country’s untapped mineral potential.
According to the Department of Geology and Mines (DGM), total mineral production increased from approximately seven million metric tonnes (MT) to 12 million MT over the past two years, while the sector’s Gross Value Added (GVA) expanded from Nu 4 billion in 2022 to Nu 5.5 billion in 2025.
Mining is also becoming an increasingly important contributor to public finances. Domestic revenue generated through royalties, mineral rents, licence fees and auction fees increased from Nu 721.6 million in 2024 to Nu 917.96 million in 2025. The sector’s GDP contribution currently stands at Nu 5.5 billion, although the official national GDP figures for 2025 are yet to be published.
The sharp rise in production has been driven largely by construction materials, whose output more than tripled from 1.9 million MT to 6.3 million MT during the period. Dolomite, one of Bhutan’s major export minerals, also recorded steady growth, increasing from 2.76 million MT to 3.1 million MT.
Officials attribute the sector’s improved performance to a combination of mining policy reforms, streamlined mineral allocation and licensing procedures, and greater adoption of scientific mining practices.
While the sector continues to expand, Bhutan still lacks a comprehensive national inventory of its mineral resources. To address this gap, the government has initiated the National Mineral Exploration Project, which aims to systematically map the country’s mineral deposits and establish an accurate national mineral database.
Officials from DGM say the project will provide reliable geological information to support scientific planning, attract responsible investment, reduce exploration risks, and guide long-term resource management. The government believes the absence of comprehensive geological data has historically constrained investment and sustainable mine planning, making the exploration project a critical foundation for future development.
Samtse and Chukha continue to dominate Bhutan’s mineral production owing to their concentration of active mines, surface collection and river dredging sites, as well as their proximity to export markets.
Despite the sector’s strong growth, the government says future expansion will not come at the expense of environmental sustainability. Officials say Bhutan is pursuing a scientific and carefully regulated mining model that balances economic development with environmental conservation and community welfare.
The government’s long-term strategy seeks to transform mining from a traditional “take-make-dispose” industry into one based on circular economy principles, where waste is minimized, materials are recovered and resources are used more efficiently.
A central objective is to reduce dependence on exporting raw minerals by encouraging domestic value addition and downstream mineral processing industries.
Officials say processing minerals within Bhutan would generate greater economic returns, create skilled employment, strengthen industrial development and reduce vulnerability to price fluctuations in international commodity markets.
The DGM will continue to enforce strict regulatory standards, including scientific mine planning, environmental safeguards and financial assurance mechanisms to ensure proper mine rehabilitation once operations cease. The government also plans to strengthen the use of technology and science-based monitoring systems to complement conventional field inspections, enabling more efficient oversight of mining operations while reducing environmental risks.
According to officials, past experience has demonstrated that manpower-based monitoring alone is insufficient to ensure compliance across an expanding mining sector.
Equally important is changing the mindset of mine operators. The government intends to promote greater awareness of circular economy principles and responsible mining practices so that operators increasingly view themselves as long-term stewards of Bhutan’s natural resources rather than simply extractive businesses.
Meanwhile, the proposed Mines and Minerals Bill 2026 incorporates many of these lessons learned from decades of mining experience. The legislation seeks to improve transparency, strengthen environmental governance, encourage responsible investment and maximize the country’s economic benefits from its mineral resources. Under the proposed legislation, mining companies will be required to establish Community Development Agreements (CDAs), through which operators will make regular financial contributions to Community Development Funds that directly support local development initiatives.
The bill also introduces statutory provisions favouring local employment and procurement, ensuring that communities living near mining projects receive tangible economic benefits alongside national revenue.
Officials say these benefit-sharing mechanisms are intended to build stronger relationships between mining companies and local communities while promoting inclusive and equitable development.
The government believes Bhutan’s future mineral development must be guided by scientific knowledge, responsible governance and long-term sustainability rather than short-term extraction.
With the National Mineral Exploration Project laying the groundwork for a comprehensive understanding of the country’s mineral wealth, policymakers hope Bhutan can unlock new economic opportunities while maintaining its longstanding commitment to environmental conservation and responsible natural resource management.
As the country pursues economic transformation under the 13th Five-Year Plan, mining is expected to play an increasingly strategic role, not simply through higher extraction, but by creating greater domestic value, strengthening industrial capacity and ensuring that the benefits of Bhutan’s mineral resources are shared sustainably across the nation.
Meanwhile, any information on the Airborne Geophysical Survey is subject to non-disclosure currently, according to the Department. This is due to the Non-Disclosure Agreement (NDA) governing the project, which restricts disclosing information until the project is fully completed and all NDA obligations are fulfilled.
Tashi Namgyal, Thimphu
