Decentralisation blamed for mining losses

Giving provincial people’s committees the power to issue business licences had done great harm to Viet Nam’s mining industry, Consultancy in Development Institute deputy director Pham Quang Tu said.

The devolution was part of a programme of decentralisation and “an attempt to simplify administrative procedures,” he said.

The Industry and Trade Ministry had granted 928 operation licences in the 12 years from 1996 to 2008 of which 353 allowed minerals exploitation.

“But the people’s committees had granted 4,200 operation licences in just the three years from 2005-08.

Of these, 3,900 allowed the exploitation of minerals.

Most had been issued in Binh Thuan, Vinh Long, Yen Bai, Cao Bang, Lam Dong, Lai Chau, Nghe An and Lao Cai provinces and the number was 10 times higher than the ministry had approved in 12 years.

Lax State supervision meant that many provinces had not reported exploration results and novice mining companies, with little experience or knowledge of the industry, had rushed to exploit resources, complained deputy director Tu.

Further, the Mineral Law failed to properly define the responsibilities of the State and people’s committees in the granting of licences.

Nor did it prevent the transfer of licences.

“The shortcomings have contributed to great losses of natural resources, especially in mines managed by local authorities,” he said.

The institute’s statistics put coal mining losses at between 40 and 60 per cent; phosphate at 26 to 43 per cent, ores at 15 to 30 per cent and building materials at 15 to 20 per cent.

Deputy director Tu said people’s committees which administered mineral deposits should take planning of exploration and exploitation into account when granting business licences.

Licences should be revoked if their holders did not meet the conditions.

“People’s committees should also improve their capacity to manage mineral resources,” he said.

Nguyen Thi Lai, Mining and Metallurgy Science and Technology Institute geologist said the granting of business licences should include a commitment to the exploitation and processing of the minerals.

The law should also stipulate the category of minerals for which each locality could issue exploitation licences and the transfer of licences should not be allowed.

The geologist said that almost 1,700 enterprises were exploiting minerals in 2007, four times higher than 2000.

The yearly increase had been 22 per cent, she said. — VNS

Tags: Vietnam mining industry