Mines and Minerals Rules, 2056 (1999)
Date of Publication in the Nepal Gazette:
16 Sept. 1999 (2056.5.31)
Amendment
Mines and Minerals (First Amendment)
Rules, 2060 (2003) 2060.5.18 (4 Sept. 2003)
In exercise of the power conferred by Section 28 of Mines and Minerals
Act, 2042 (1985), Government of Nepal has framed the following Rules:

Chapter-1
Preliminary
1. Short Title and Commencement: (1) These Rules shall be called
“Mines and Minerals Rules, 1999 (2056).”
(2) These Rules shall come into force immediately.
2. Definitions: Unless the subject or context otherwise requires, in this
Rules:-
(a) “Act” means Mines and Minerals Act, 1985 (2042).
(b) “License” means a license issued pursuant to these Rules for
prospecting and excavation of any minerals.
(c) “Mining Gate” means the main gate of mining area from where
minerals are to be exported.
(d) “Specified Minerals” means any minerals for which the Department
has issued a license to carryout mining operations having concluded
a contact or any minerals as specified by Government of Nepal to
carryout any mining operations by the Department or any other
governmental agency only as specified by the Department.
(e) “Committee” means Mines Development Committee constituted
pursuant to Rule 35.
(f) “Centre” means Minerals Development Centre established pursuant
to Rule 39.

1
Amended by the First Amendment.
2
Amended by the First Amended.
3
Amended by the First Amended.
4
Amended by the First Amended.
(a) One who has Two years experience in concerned
mining operations or one who has a capacity to employ
a mining operation expert related thereto.
(b) One who has financial capacity of Four Hundred
Thousand Rupees per square kilometer of the mining
area amongst the total mining area for prospecting
operations and Three Million Rupees per square
kilometer of the mining area amongst the total mining
area for excavation.
(2) The qualifications of a person desirous to obtain a license to
carry out mining operations of precious or valuable minerals shall be as
follows:
(a) One who has Two years experience in concerned
mining operations or one who has a capacity to employ
a mining operation expert related thereto.
(b) One who has financial capacity of Two Hundred
Thousand Rupees per square kilometer of the mining
area amongst the total mining area for prospecting
operations and Two Million Rupees of the mining area
amongst the total mining area for excavation.
(3) The qualifications of a person desirous to obtain a license to
carry out mining operations of ordinary minerals shall be as follows:
(a) One who has One year experience in concerned
mining operations or one who has a capacity to employ
a mining operation expert related thereto.
(b) One who has financial capacity of One Hundred
Thousand Rupees per square kilometer of the mining
area amongst the total mining area for prospecting
operations and One Million Rupees of the mining area
amongst the total mining area for excavation.
(4) For the purpose of this Rule, a person who submits an application
for deputing an expert for mining operation, shall submit confirmation
letter of the expert mentioning with consent to provide necessary technical
service for mining operation, copy of the expert registration certificate
received by the expert and evidence of tax clearance of such expert.
(5) For the purpose of this Rule, the applicant shall submit, as an
evidence of financial capacity, a evaluation document made by Village
Development Committee or Municipality of the land, house or any other
movable, immovable property of the applicant, or details or Bank deposit of
the applicant or certified document which mention property price or amount
of the movable, immovable property in the name of applicant which shows
the financial capacity of the applicant.

Chapter – 3
Provisions Concerning Prospecting Operations
6. To Submit an Application for Prospecting License: If a person
desirous to prospect minerals quality and quantity of which have not been
yet determined, shall have to apply to the Department in the format as
specified in Schedule-3 along with a proposed scheme of prospecting
operations.
7. To Issue a Prospecting License: (1) The Department shall, upon
receiving the application pursuant to Rule 6, if it deems fit to issue a license
to the applicant after making necessary inquiry, issue a license in a format
as specified in Schedule-5 having charged the fees as referred to in
Schedule-4.
5 (2) The license pursuant to Sub-rule (1) shall be collected by the
applicant him/herself or by his/her representative within Thirty days of the
information provided by the Department to issue a license.
(3) In case of failure to obtain the license within the time limit
referred to in Sub-rule (2), the license shall, ipso facto, be cancelled.
8. Size and Area of Prospecting Operations: (1) The Department may,
for prospecting operations of any minerals, fix area of 0.25 square
kilometer in minimum (approximately an one tenth part of one square mile)
and 250 square kilometer in maximum (approximately Hundred square
mile) in rectangular shape.
(2) The total length of the area fixed pursuant to Sub-rule (1) shall
not exceed more than Four times of the total breath.
9. Provisions Concerning Period for Prospecting Operations and
Extension of the Period:
6
(1) The person who has obtained a prospecting
license pursuant to Rule 7, shall complete the prospecting operations within
a period of Four years in the case of prospecting of very precious minerals
or precious and valuable minerals and within a period of Two years in the
case of ordinary minerals.
(2) If it requires to extend time due to impossibility to complete the
prospecting operations within the period as referred to in Sub-rule (1), the
licensee shall have to apply to the Department for time extension before
Three months of the expiry date of specified period, along with the progress
report as specified in Schedule-6.
(3) If an application is received pursuant to Sub-rule (2), the
Department may, if it deems fit to extend the period as per request after
making necessary inquiry, extend a period of up to Two years but not
extending One year at a time within One month from the date of application

5
Amended by the First Amended.
6
Amended by the First Amended.
so received, having taken into account of the nature of the minerals,
geological condition, prospecting technology and also the progress of
prospecting operations upon charging an additional fees as specified in
Schedule-4.
10. Operation of Prospecting Operations: (1) A person having obtained a
license shall operate prospecting operations within a period of Ninety days
from the date of license so obtained.
(2)In case of failure to operate prospecting operations within the
period as referred to in Sub-rule (1) the Department may revoke the license
of prospecting operations.
(3) Notwithstanding anything contained elsewhere in this Rule, if the
person who has obtained a license for prospecting operations applies before
expiry its date specifying special circumstances by virtue of which he/she
has failed to operate the prospecting operations within the period referred to
in Sub-rule (1), the Department may, if it deems fit after making necessary
inquiry on the same, provide permission for operation of prospecting
operations with the period of Ninety days from the date on which the
specified time was expired.
11. Conditions to be Followed in the course of Prospecting
Operations: The conditions to be followed by a person having obtained a
prospecting license in the course of prospecting operations, shall be as
follows:
(a) To follow healthy system and apply diligent and efficient manner in
carrying out prospecting operations.
(b) Not to cause damage or loss to the house, land, trees, crops, things or
other property located within the area specified in the prospecting
license.
(c) In case of tracing out any archeological matter in the course of
prospecting operations, to keep such a matter safely and inform on
the same to the concerned District Administration Office and also to
the Department immediately.
(d) To rehabilitate the prospecting area referred to in the license within
Thirty days after completion of prospecting operations having
maintained fence or wall as required in dig wells, slops, soil hips or
soil covered land made in course of such operations.
(e) To remove all the materials from the area referred to in the license
within One Hundred and Eighty days from the completion of the
period of prospecting operations
(f) Not to sell any minerals traced at the time of performing
prospecting operations.
12. Relinquishment of Prospecting Area: 7
(1) A licensee for prospecting
operations shall not be allowed to relinquish the area referred to in the
license for a period of Four years in the case of very precious minerals or
precious and valuable minerals and for a period of Two years in the case of
ordinary minerals.
(2) If a licensee for prospecting operations desire to relinquish
some of the area out of the total area referred to in the license
obtained by him, after completion of the period referred to in Sub-rule
(1), he shall have to submit an application to the Department for
relinquishment of the area having specified the same.
8
(3) If an application pursuant to Sub-rule (2) is received, the
Department may grant permission for relinquishment of 0.25 square
kilometer in minimum in rectangular shape (aayatkar) (approximately an
one tenth part of one square mile) area of the prospecting operations.

7
Amended by the First Amended.
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Amended by the First Amended.
13. Facilities and Incentives to be Obtained in Prospecting
Operations: A licensee for prospecting operations shall, while
carrying out prospecting operations be entitled to the following
incentives and facilities:
(a) To scratch, dig, make whole or follow any appropriate method
for prospecting of minerals within the area referred to in the
license for prospecting operations.
(b) To take abroad the samples of minerals traced in course of
prospecting operations in quantity as permitted by the
Department for the purpose of testing and analyzing the
nature, quantity, value of the minerals in crude, semi-refined
or refined form.
(c) To use water ha ving brought from the prospecting area or
from the outside thereof for prospecting operations and for
persons engaged in the prospecting operations, without
causing adverse effect to the public-in-general.
(d) To store (keep) machine, machinery equipment or others
required materials for prospecting operations in the
prospecting area and construct house, cot, shed to live the
persons engaged in prospecting operations.

Chapter-4
Provisions Concerning Excavation
14. To Submit an Application for a Excavation License:(1) If a person
desires to carry out excavation of minerals quality and quantity of
which have already been determined, he/she shall have to apply to the
Department in the format as specified in Schedule-7 along with
proposed scheme of excavation.
(2) Notwithstanding anything contained in Sub-rule
(1), if a person holding a license of prospecting operations pursuant to
Rule 7 desires to perform the excavation, he/she shall have to apply to
the Department to obtain a license for mining opening operation in the
format as specified in Schedule-7 along with a detailed prospecting
report and proposed scheme of excavation before expiry of the period
of prospecting operations.
15. To Issue a License for Excavation: (1) Upon receiving application
pursuant to Rule 14, after making necessary inquiry if the Department
deems fit on including the proposed scheme of excavation, it shall
issue a license for excavation, in the format as specified in Schedule-8
to the applicant having charged fees as referred to in Schedule-4.
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(2) The license pursuant to Sub-rule (1) shall be collected by the
applicant him/herself or by his/her representative within Thirty days of the
information provided by the Department to issue a license.
(3) In the case of failure to obtain the license within the time
limit referred to in Sub-rule (2) the license shall, ipso facto be
cancelled.
16. Size and Area for Excavation: (1) The Department may, for
excavation of minerals, fix an area of 0.25 square kilometer
(approximately One Tenth of One square mile) in minimum and 25
square kilometer (approximately Ten square mile) in maximum in a
rectangular size.
(2) The total length of the area fixed in accordance with Subrule
(1) shall not exceed more than Four times of the total breadth.
17. Provisions Concerning Period for Excavation and Extension of
the Period: (1) A licensee for excavation pursuant to Rule 15, shall

9
Amended by the First Amended.
have to complete the excavation of very small scale, small scale,
medium scale and large scale, minerals within a period of Ten years,
Fifteen years, Twenty years and Thirty years respectively.
Provided that, in the case of minerals of lime stone of cement
grade the initial period for a very small scale and small scale shall be
upto Fifteen years and Twenty years respectively.
(2) In case of necessity of extension of time due to
impossibility to complete the excavation within the period as referred
to Stab-rule (1), the licensee shall have to apply to the Department for
extension of time in the format prescribed in Schedule-9 before Three
months of the expiry date along with detail progress report of annual
production.
(3) If an application is received pursuant to Sub-section (2), the
Department may, if it deems fit to extend the period as requested, after
making necessary inquiry, extend the period of One year, Two years, Five
years and Ten years for a very small, small, medium and large scale 10of
excavations of minerals respectively within One month from the date of
application so received having charged additional fees as referred to in
Schedule-4.
1117A.Relinquishment of Mining Area: (1) A licensee who has obtained
excavation license, may submit an application to relinquish area mentioned
in the license not less than 0.25 square kilometer in rectangular (about Ten
percent of One square kilometer) area obtained by him/her.
(2) If an application is received pursuant to Sub-rule (1), the
Department upon making necessary inquiry and if deems appropriate, may
provide approval of relinquishing.

10 Inserted by the First Amended.
11 Inserted by the First Amended.
18. Operation of Excavation: (1) A licensee for mining opening operation
shall carryout excavation within Six months from the date of license
obtained by him/her.
(2) In case of failure to operate excavation within the period as
specified in Sub-rule (1), the Department may revoke the license for
excavation.
(3) Notwithstanding any things contained elsewhere in this
Rule, if a licensee for mining opening operation applies before Thirty
days of its expiry date specifying the reasons for failure to operate the
excavation within the period as specified in Sub-rule (1), the Department
may, if it deems the reasons to be reasonable after making necessary
inquiry on the same, and on the basis of class of mineral, geological
condition and opening technology and other matters extend the time for
excavation for a period of Six months from the date on which the specified
time was expired.
19. Conditions to be Followed in Carrying-out Excavation: The
conditions which shall have to follow in the course of excavation by the
licensee shall be as follows:
(a) To conduct excavation or gyrations in a manner so that maximum
utilization of minerals resources and preservation of mineral deposits
are ensured.
(b) To conduct excavation in a manner so that it causes minimum
detrimental effect to the environment as far as possible and
appropriate attention in environmental protection is given.
(c) Not to perform excavation in the places allocated for the national
and public interest and safety and within at least Fifty meters from
an ancient monument, city, grave yard, crematorium, public way,
dam, canal, pipeline, fort, army barrack, temple, mosque, church,
house, factory etc. and not to construct a house, factory an area.
(d) To allow to use the tram line, rope way line, way and water dam
constructed by him to the other license holder for excavation in the
area near to the mining opening land in reasonable conditions.
(e) To put necessary instrument of measurement of quantity of minerals
in the place of collection and storing minerals.
(f) Not to perform the excavation outside the boundary of ground level
area referred to in the excavation license and if the boundary of Two
or more than Two licenses are joined to perform the excavation
having set aside Twenty Five meters outside the joining of such
boundaries.
(g) To maintain appropriate safety measure to avoid any accident in
tunnel, hole, well etc. made in course of excavation of mines.
(h) In case of any accident, death of any person or damage or loss or
likely to cause damage or loss to the property of any person within
the area referred to in the license at the time of excavation, inform
immediately to the concerned District Administration Office and the
Department.
(i) The licensee shall present in person or his/her representative at the
time of operation of excavation in the mining area for the purpose of
supervision, control etc. of the same.
(j) To establish an office in the mining area and to display the license in
easily visible position at the office.
(k) To maintain the boundaries of excavatopm area in his/her own cost.
(l) In case of stopping or obstacle paused for a period of more than one
month in the excavation by the reason of occurrence of force
majeure situation to inform Department on the same.
(m) In the case of the expiry time period for mining operations or
cancellation of the license of excavation, to stop the mining
operations within Six months and remove all materials and
appropriately rehabilitate the area by covering the holes etc. and
having fenced or walled wholly in the digged and sliding area, if so
required.
20. Facilities and Incentives to be obtained in Excavation : A licensee
for excavation shall be entitled to the following facilities and incentives in
the case of excavation:
(a) To perform any kind of excavation for digging out minerals.
(b) To process, purify, refine, store, transport sell and export the
minerals, having digged out them.
(c) To import machine, tools, equipment etc. required for excavation.
(d) To carry out any type of construction works required for mining
opening of minerals and digging out stone, soil, sand, gravel etc.
from the mining operation area required for such construction works.
21. To Pay Royalty: (1) A licensee of the excavation shall have to pay
royalty as referred to in Schedule-10 for each time of export of the minerals
from the mining gate on the basis of the quantity of such exported minerals.
12(2) A licensee for excavation shall submit royalty to be paid
pursuant to Sub-rule (1) , deposit in the revenue account in the name of
Department within Seven days of the expiry of each month and monthly
production details and revenue deposit voucher within Fifteen days to the
Department.
13(3) If a licensee for excavation does not pay royalty within the
prescribed period pursuant to Sub-rule (2), he/she shall submit additional

12 Amended by the First Amended.
13 Inserted by the First Amended.
Ten percent of the royalty upto Three months of the expiry of period
additional Twenty percent upto Six months and additional Thirty percent
upto One year.
22. Local Development Fee: A licensee for excavation shall, in exporting
minerals from the mining gate, have to pay local development fee at the
rate of one tenth of the royalty fixed in accordance with Rule 21 in each
time on the basis of the quantity of minerals so exported to the District
Development Committee or any other agency prescribed by the said
Committee.
23. Deposit Amount to Pay: A licensee for excavation shall, in course of
excavation, have to pay the deposit amount referred to in Schedule-4.

Chapter -5
Provisions Relating to Specified Minerals
24. To Invite a Proposal for Mining Operations Contract of Specified
Minerals having Published a Notice: (1) The Department shall, for the
purpose of granting a license for mining operations having concluded a
contract on specified minerals pursuant to Sub-section (3) of Section 5 of
the Act, invite proposal having given at least Sixty days time and having
published a notice thereof in the newspapers of national level along with
necessary details thereof.
(2) A notice for invitation of a proposal to be published pursuant to
Sub-rule (1) shall specify, inter alia, the following matters:
(a) The mining area invited for mining operations,
(b) Basic notice and information about the specified
minerals made available,
(c) Basic information about physical infrastructures
made available,
(d) Charge for proposals,
(e) Other necessary matters.
(3) The Department shall if it desires to change the amount or to
subscribe equivalent shares of costs incurred for prospecting operations
having estimated direct expense thereof, also be specified in a notice of
invitation for proposals to be published pursuant to Sub-rule (1).
25. Matters to be Specified by an offerer: (1) The interested person shall
submit his/her proposal to the Department within the period as prescribed
in an invitation for proposal pursuant to Rule 24, having specified the
following details:
(a) A proof that the offerer has the capital, machinery, equipment and
expertise or capacity to manage the expertise required for mining
operations,
(b) Method of explorative development and feasibility study as well as
method of implementing mining scheme and time schedule thereto,
(c) Minimum programme to be carried out in different phases of the
mining operation period.
26. Evaluation of the Proposal: (1) The Department shall, after receiving
proposals pursuant to Rule 25, evaluate the proposals on the following
bases:
(a) Financial capacity of the offerer,
(b) Whether or not the offerer has the qualifications
pursuant to Rule 5,
(c) Experience of the offerer in the field of sale and
distribution of the minerals,
(d) Proposed minimum works and expenses to be carried
out during the period of explorative development and
feasibility study,
(e) Other relevant matters.
(2) The Department may ask further detail or information from any
offered in the course of evaluation of the proposals.
27. Negotiations: The Department may, after evaluation of the proposals
pursuant to Rule 26, negotiate with the offerer, if it so desires.
28. To Conclude a Contract by Accepting Proposal and to Issue a
License: (1) On the basis of evaluation of the proposals pursuant to Rule
26 and negotiations concluded with offerer pursuant to Rule 27, if the
Department deems appropriate to accept the proposal, it may conclude a
contract with the offerer by accepting the proposal and shall issue a license
for mining operations of specified minerals.
(2) The Department may, after concluding a contract pursuant to
Sub-rule (1), grant a license in the format as prescribed in Schedule-11 for
mining operations of the specified 11 minerals to the party concluding a
contract.
(3) The Department may, while granting a license by concluding a
contract pursuant to Sub-rules (1) and (2), include special conditions like
renewal of a license, size and territory of mining area, period of prospecting
and excavation, operation of mining and it may also provide special
facilities to a party concluding a contract.
(4) The Department may, while granting a license for mining
operations by concluding a contract pursuant to Sub-rules (1) and (2),
include a condition of taking royalty and local development fee including
other fee or amount pursuant to these Rules from the contractor and it may
conclude the contract.
29. Matters to be Mentioned in the contract: While concluding a contract
pursuant to Rule 28, such a contract shall include inter alia, the following
matters:
(a) Objectives of the contract,
(b) Period of mining operations and provision for extension of the
period,
(c) Possibility of relinquishment of the mining area, if any, in different
phases,
(d) Liability at the time of relinquishment of mining area,
(e) Works and liabilities of the parties to the contract,
(f) Provision concerning performance guarantee,
(g) Budget programme of mining operations in different phases and
amendment of limitation,
(h) Prospecting operation and results thereof,
(i) Period of minerals production and extension of the period,
(j) Environmental protection, projection of minerals and protection of
life and property,
(k) Provision concerning measurement of produced minerals,
(l) Matter to submit a report on mining operations,
(m) Provision concerning operation and continuation of mining
operations,
(n) Provision concerning security of labours,
(o) Sale and domestic supply of minerals,
(p) Provision concerning employee and training,
(q) Provision concerning procurement of materials,
(r) Provision concerning utilization of land and government assistant,
(s) Operation of mining in the joint venture, if any,
(t) Provision concerning joint review of performance in accordance
with the contract,
(u) Provision concerning partnership and transfer,
(v) Provision concerning postponement and cancellation of mining
operations,
(w) Provision concerning dispute resolution,
(x) Law applicable in the course of mining operation,
(y) Matters to be included in case of situation of force majeure,
(z) Other matters as the Department deems necessary.
30. Government of Nepal may Specify Mining Operations of the
Specified Minerals: Notwithstanding any thing contained elsewhere in
this chapter, Government of Nepal may specify that mining operations of
any specified minerals may be operated only by the Department of other
governmental agencies, as the case may be, pursuant to Sub-section (3) of
Section 12 of the Act.

Chapter-6
Mineral Deposits and Environment Protection
31. Protection of Mineral Deposits: (1) A licensee shall conduct mining
operations in such a manner so that it shall cause minimum effect on the
land and maximum recovery of mineral deposits.
(2) A licensee for mining operations shall give emphasis on
producing highly valuable minerals as far as possible.
(3) A licensee for mining operations shall, while carrying out it, have
to utilize maximum of by production produced by the said operation and
minimize the waste.
32. Significant Adverse Effect on the Environment shall be Deemed:
The following effects caused on the environment in the course of mining
operation by the operator of mining shall, for the purpose of Section 11A.
of Act, be deemed to have been made significant adverse effect on the
environment:
(a) Possibility of dislocation in the use of land and land surface in the
course of development of mines and basic structure,
(b) Possibility of deforestation and disappearance of wildlife,
(c) Possibility of water pollution due to the water flowed from the mine
and from the dirty liquid wastage produced in the course of ore
processing,
(d) Possibility of air pollution due to smoke and dust,
(e) Possibility of sound pollution and vibration due to drilling, blasting
and use of heavy machines,
(f) Possibility of problems of soil wastage due to over burden trilling,
(g) Possibility of problems such as lands erosion, landslide, floating of
sloppy land, floating of soil and blockage of way that might be
produced,
(h) Possibility of diverting water flow and causing inconvenience in
water utilization,
(i) Possibility of damage to the cultural, archeological spots and
vegetation garden.
33. Protective Measures to follow in Respect to Environmental
Protection: A person carrying out mining operations shall, in respect to
environmental protection, have to follow the following measures:
(a) To carryout mining operation in a manner so that it shall cause less
effects on the surface and ground water situated in the surrounding
of mining area,
(b) To manage appropriate siltation of wastes, pond and drainage for
water flow,
(c) To use affluent treatment measure, as per necessity,
(d) To follow minimum pollution emitting methods, as far as possible,
in the sources of mine where poisonous gas and maximum dust are
produced,
(e) To cause to use gas filter and dust mask to the labours working in
mines producing poisonous gas and maximum dust,
(f) To use minimum sound producing explosive goods or machinery in
the mining operation, as far as possible,
(g) To use silencer as an alternative available to explosive goods,
(h) To collect the waste produced in the course of mining operation in
an appropriate place and make walling, fencing and plantation
around it,
(i) In case of removing topsoil in the course of mining operation, to
store it separately in an appropriate place,
(j) After completion of mining operations to rehabilitate the topsoil and
to make plantation therein,
(k) To follow required safety measures where hazardous substance are
used or where possibility of hazardous situation might be occurred in
the course of mining operation,
(l) To carryout mining operation in a manner so that it may cause
minimum adverse effect to the flora and fauna,
(m) To carryout mining operation in a manner so that it cause minimum
adverse effect to the natural beauty and cultural heritage.

Chapter-7
Special Provisions for Ordinary Construction
Oriented Minerals
34. To Submit an Application for license for the Ordinary
Construction Oriented Minerals: (1) A person desiring to carryout
mining operation of ordinary construction related minerals such as soil,
stone and sand shall have to apply to the concerned District Development
Committee in the format as prescribed in Schedule-12 to obtain a license
for the same pursuant to Sub-section (4) of Section 12 of the Act, having
caused no adverse effect on the customary practice of such minerals for
personal use by the public-in-general.
(2) The District Development Committee shall, after receiving
application pursuant to Sub-rule (1), forward it to the committee constituted
pursuant to Rule 35 to inquire and recommend whether to issue or not a
license for the mining of the ordinary construction related pursuant to the
request of the applicant.
35. Constitution of the Mines Development Committee: (1) In order to
recommend to issue a license for mining operations of ordinary
construction related minerals there shall be a Mines Development
Committee in each District constituted as follows:
(a) Local Development Officer – Coordinator
(b) A representative, District
Development Committee – Member
(c) A representative (officer level),
District Administration Office – Member
(d) A representative (officer level),
District Forest Office – Member
(e) A representative (officer level),
District Road office – Member
(f) A representative (officer level),
District Soil Conservation Office – Member
(g) A representative (officer level),
Housing and Urban Development
Office – Member
(h) Chief of District Survey Section
or, Surveyor as Designated by
him – Member
14(i) Officer level representative of the
Department of Mines and
Geology for the Districts of
Kathmandu Valley and Officer
level representative of the Office
of Cottage and Small Scale
Industries for the District or
Officer level representative or
Cottage and Small Scale
Industries Development
Committee where the Office of
Cottage and Small Scale
Industries is not in function – Member
15(j) Planning and Administrative
Officer, District Development
Committee -Member-secretary

(2) The Committee shall fix its procedure of meeting by itself.
36. Approval shall be Taken: (1) The Committee shall, after making
necessary inquiry to the application received pursuant to Sub-rule (2) of
Rule 34, if it thinks fit to grant a license for mining operation of ordinary
construction related minerals as per the request of the applicant, shall
recommend to the District Development Committee to that effect.

14 Amended by the First Amended.
15 Inserted by the First Amended.
(2) The District development Committee shall, after receiving the
recommendation from the Committee pursuant to Sub-rule (1), forward it
for the approval of the Department before issuing a license for mining
operation requesting whether a license as per request of the applicant is to
issue or not having specified the details of area of mining, method of the
excavation of mines, area and name of minerals.
(3) The Department shall, within a period of Six months from the
date on which such a letter for approval is received pursuant to Sub-rule
(1), decide on the subject matter of the same specifying as to in what
manner , how and subject to what conditions such a license shall be issued.
Provided that, a license shall not be issued if the Department decides
not to issue a license.
(4) Notwithstanding anything contained in Sub-rule (2), if the area
recommended for mining operation falls within forest area the District
Development Committee shall have to receive an approval of the Ministry
of Forest and Soil Conservation before obtaining approval of the
Department.
37. To issue a License for Ordinary Constructed Oriented Minerals:
(1) The District Development Committee shall, if an approval is received
pursuant to Rule 36 issue a license for mining operations of ordinary
construction related minerals to the applicant in the format as prescribed in
Schedule-13 having charged fees referred to in Schedule-4.
(2) The District Development Committee shall forward the
information along with a voucher to the Department having deposited an
amount at the rate of Twenty percent of the income received by it in the
revenue account of the Department for a license issued pursuant to Sub-rule
(1).
(3) A licensee for the ordinary construction related minerals shall
have to renew the license from the District Development Committee
pursuant to Rule 42.
Provided that, in the case of non-renewal by the District
Development Committee without reasonable grounds, the concerned person
may apply to the Department for it and the Department may renew after
making necessary inquiry on it.
38. To Monitor: (1) The District Development Committee shall monitor on
whether the licensee for mining operation of ordinary construction related
minerals has, while operating mines, been abided by Act and these Rules or
other laws in force. The District Development Committee may, in such
monitoring, issue necessary order to the licensee, suspend the mining
operations and revoke the license for mining operation of ordinary
construction related minerals, as the case may be.
(2) Notwithstanding anything contained in Sub-rule (1), the
District Development Committee shall, in suspending mining operation or
revoking a license for mining operation of ordinary construction related
minerals, recommendations of the Committee and the Department have to
obtain.
(3) In case of failure to follow the terms and conditions specified by
the Department in granting approval on the issuance of a license, the
Department may issue appropriate order to the District Development
Committee to suspend mining operation or revoke the license.

Chapter-8
Provision Concerning Establishment and Functions,
Duties and Powers of the Centre
39. Establishment of the Minerals Development Centre: Government
of Nepal may, in order to develop mining and minerals resources and to
operate mining operations that may be supportive the mining operations
establish a Minerals Development Centre.
40. Functions, Duties and Power of the Centre: The functions, duties and
powers of the Centre shall be as follows:
(a) To formulate national mining policy,
(b) To frame and implement and cause to implement mineral protection,
promotion and development programmes,
(c) To perform necessary works for resolving problems arising in
mining industry,
(d) To conduct or caused to conduct other promotional programmes on
minerals,
(e) To perform other necessary functions.
41. Special Committee may be constituted by the Centre: (1) The
Centre may, in order to carryout certain functions relating to the
development and promotion of minerals, constitute a special committee.
(2) The function, duty, power and procedure of the committee to be
constituted pursuant to Sub-rule (1) shall be as specified by the Centre.

Chapter-9
Miscellaneous
42. Renewal of a License: (1) A licensee shall have to renew the license
obtained by him/her for mining operations within a period of Three months
from the date of expiry of every fiscal year.
16(2) In order to renew the license pursuant to Sub-rule (1), one shall
submit an application to the District Development Committee in the case of
ordinary construction related minerals license and to the Department in the
case of other license.
(3) If an application is received pursuant to Sub-rule (2), the
Department 17and to the District Development Committee in the case of
ordinary construction related minerals shall, after making necessary
inquiry, renew the license as per the request of the applicant having charged
the renewal fee as referred to in Schedule-4.
(4) 18
……………….
43. Circumstances on Which a License is to Revoke: A license shall be
revoked on the following circumstances:
(a) If a licensee submits an application to revoke the
license,
(b) If a license issued in accordance with the Rule 7 or 15
is not received by the applicant him/herself or his/her
representative within a period of Thirty days,
(c) If a license is not renewed pursuant to Rule 42,
(d) If any acts are done having caused adverse effect on
public interest or national security or environment,

16 Amended by the First Amended.
17 Inserted by the First Amended.
18 Deleted by the First Amended.
19(d1) If prescribed royalty, fees, amount, land rent etc. is not
paid within the prescribed time limit to the prescribed
institution.
20(d2) If details, report, notice etc. to be submitted to the
Department pursuant to these Rules, is not submitted
within prescribed time limit.
(e) If the conditions prescribed pursuant to these Rules are
not followed.
44. If any Other Minerals are invented to Obtain another License: (1)
A licensee for prospecting operations or excavation shall, in order to
carryout the mining operations referred to in the license, inform the
Department within a period of Thirty days, if any minerals other than those
specified in the license are found and he/she shall be issued a license for
mining operation of such minerals on the priority basis.
(2) If the licensee who has found any minerals other than those
specified in the license pursuant to Sub-rule (1), desires to operate mining
operations of such newly invented minerals, he/she shall have to obtain a
license for prospecting or excavation within a period of Thirty days from
the date of information so submitted having followed the procedure as laid
down in Rules 6,7,14 and 15, as per necessity.
(3) Notwithstanding anything contained in the Sub-rule (2), a
licensee shall not be issued a license for mining operation of such minerals
in the following circumstances:
(a) if information is not given within a period of thirty
days from the date of finding of the minerals.

19 Inserted by the First Amended.
20 Inserted by the First Amended.
(b) If a licensee expresses his/her unwillingness to
carryout mining operation.
(4) If a person to whom priority has been given pursuant to Sub-rule
(1) does not obtain a license for such minerals, the Department may issue a
license for such mining operations to any other person.
45. Statement, Information and Report: (1) A licensee shall have to
submit the progress report of prospecting operations to the Department in
the format as prescribed in Schedule-6 in every Five months.
(2) A licensee shall have to submit a statement of annual production
process report of the mining operation to the Department within a period of
three months from the date of completion of each fiscal year.
(3) A licensee shall have to submit a detail statement or a report as
follows to the Department within a period of Three months from the date of
completion of each fiscal year:
a) The details concerning minerals reserved and shall
deposit of minerals.
b) The details concerning production and sell of minerals.
c) The details concerning machinery and instrument
d) The details concerning employees and works
e) The details concerning costs, income and expenditure
for various mining operations.
f) Other necessary details and report.
(4) A licensee shall, in course of mining operation, if causes damage
or feels that there exists possibility of damage to the public property, have
to notify along with full details to the Department through the prompt
means having taken required measures for the protection thereof.
46. To Pay Land Rent: (1) If the land of the mining area referred to the
license for mining operation is owned by Government of Nepal, the
licensee shall have to pay land rent to Government of Nepal as prescribed
in Schedule-14.
21(2) A person who desires excavation license, shall submit an
application along with written agreement between applicant and the
landowner regarding to lease of Land to the District Development
Committee in case of ordinary construction minerals and to the Department
in case of the minerals, if the land as referred to in proposed planning of the
excavation is owned by the private person.
(3) The licensee shall have to pay the amount as mentioned in the
agreement concluded pursuant to Sub-rule (2) to the land-owner as land
rent.
47. To Sell other Minerals or By-production: (1) The licensee shall have
to obtain prior approval of the Department for selling of the minerals or byproduction
other than those referred to in the license.
(2) While selling of other minerals or by production having obtained
prior approval of the Department pursuant to Sub-rule (1), one shall have to
deposit the royalty as prescribed pursuant to Rule 21.
48. Restriction on Mineral Exports: (1) Government of Nepal may issue
necessary order for restriction on export of any minerals with a view to the
national security or supply of internal demand.
(2) Notwithstanding anything contained in the Sub-rule (1), the
licensee may export the minerals opened by him having obtained priorapproval
if the Department for the following purposes:

21 Amended by the First Amended.
(a) To determine or to analyze the quality of minerals,
(b) To send sample for market study of the minerals.
49. The Department may Grant Approval: The Department may grant an
approval to export stone, soil, sand, rock, fossils in abroad collected by any
person in the course of geological survey and mining exploration of Nepal,
for laboratory analysis and exploration works. 22The Department shall levy
fees for export as referred to in Chapter (c) of Schedule 4 for such approval.
50. Procedure Concerning Inspection and Inquiry: (1) The Department
may designate any mining engineer, geologist or an expert of related
subject as mining inspector in order to inquire on situation of any mine and
whether mining operations is carried out in accordance with the prevailing
laws, Rules, orders and directions rights, subject to the laws and Rules in
force:
(a) To enter into any mining area alone or along with
government employee, representatives of local
authorities or police as required.
(b) To inquire on the plant, machine etc. located in the
mining area or to take sample of minerals of any
condition or any other goods produced from mining
area or to take them on custody or to stop for selling or
transportation of any minerals.
(c) To issue an order for submission or possess of
documents, registers, account books, books if records
or any other necessary documents related with mining
operations which are holding by the licensee or having
in his authority or to take them in his custody or to

22 Inserted by the First Amended.
take them as sealed so that they shall not be taken
elsewhere.
(d) To inquire with or make written statement from the
licensee, worker or employee related with the mining
as the mining inspector desires to inquire.
(3) If any minerals or any other goods as referred to in clause (b) or
(c) of Sub- rule (2) are taken on custody of stopped, the mining Inspector
shall have to inform the concerned person and t submit a report thereof to
the Department.
(4) The Department may decide after making inquiry and give
necessary order on the report submitted by the mining inspector pursuant to
Sub- rule (3).
51. Survey and Map of the Mining Area: The geological, topographical,
mining etc. survey and mapping in the mining area shall be as fixed by the
Department on the basis of nature of minerals, geological conditions and
mine opening technology etc.
52. Arbitration Procedures: In case any dispute arisen between
Government of Nepal and licensee in respect to any matter concerning
mining operations cannot be resolved by mutual consultation between the
parties pursuant to Section 26 of the Act, such a dispute shall be resolved
by the procedure as prescribed in the contract, such a dispute shall be
resolved by the arbitration according to the law of arbitration in force.
53. Procedure and Method: The procedure and method to be followed by a
licensee in the course of mining operations shall be as specified by the
Department in the license depending upon the nature of mining operations.
2353A.Transfer of License: (1) A licensee shall not transfer his/her license in
the name of any other person without an approval of the Department.
(2) If a licensee desires to transfer his/her license to any other
person, he/she shall submit an application to the Department along with the
qualification of the person who desires to obtain license pursuant to Rule 5.
(3) If an application is received pursuant to Sub-rule (2), upon
making necessary inquiry whether the qualification of the concerned person
as referred to in Rule 5 meets or not, the Department shall decide within
Thirty days of the receiving an application whether or not to transfer
license.
(4) If it deems appropriate to issue a license to a person who desire
to obtain license pursuant to Sub-rule (3) is qualified as referred to in Rule
5, the Department shall transfer the license by levying transfer fees as
referred to in Schedule 4.
(5) If a heir submits an application that licensee has died or he/she is
unable to perform as per terms and conditions as prescribed in license at the
time of issuance or Act or these Rules along with the evidence that he/she is
the nearest heir, upon making necessary inquiry, the Department deems
that the applicant is qualified as referred to in Rule 5, shall transfer the
license by levying transfer fees as referred to in Schedule 4.
(6) If any case is filed regarding heir of the licensee upon making
necessary inquiry to transfer the license pursuant to Sub-rule (5), the license
shall not be transferred to any person until such a case is decided.
2453B. To be Deposited: A licensee who has mining operation license shall
deposit an amount as referred to Schedule 4 to perform mining operation.

23 Inserted by the First Amended.
24 Inserted by the First Amended.
54. Accounts and Record of Mining Operations: The accounts and
records of the minerals to be maintained by a licensee shall be as fixed by
the Department.
55. Schedule May be Altered or Modified: Government of Nepal may
alter or modify the Schedule as per necessity by a Notification published in
the Nepal Gazette.
56. Repeal and Saving: (1) The following Rules are, hereby, repealed:
(a) Mineral (Amendment and Consolidation) Rules, 2018
(1961),
(b) Gas Oil (Contract) Rules, 2015 (1958),
(c) Gas (Protection) Rules, 2017 (1960).
(2) Acts done pursuant to Minerals (Amendment and Consolidation)
Rules, 2018 (1961), Gas Oil (Contract) Rules, 2015 (1958) Gas (Protection)
Rules, 2017 (1960) before the commencement of these Rules shall be
deemed to have been done pursuant to these Rules.

25Schedule-1
(Relating to Rule-3)
Classification of Minerals
1. On the basis of the nature of the minerals, minerals are classified as
follows:

25 Amended by the First Amended.

2. On the basis of the importance of the minerals, minerals are classified as
follows:

26Schedule-2
(Relating to Sub-rule (2) of Rule 4)
Scales of Minerals

Schedule-3
(Relating to Rule 6)
Application for a License of Prospecting Operations
The Director General,
Department of Mines & Geology,
Lainchour, Kathmandu
Dear Sir/Madam,
I/We hereby applied for a license for prospecting operations pursuant to
Mines and Minerals Act, 1985 (2042) and Mines and Minerals Rules, 1999 (2056)
with following details.
1. Name of the person: Occupation:
Postal Address:
Telephone: Fax No.:
2. Corporate body’s, firm’s and company’s:
Name: Telex:
Postal Address: Fax No.:
Telephone No. Registered date and number:
Office where registered
Chief official:
3. Intended minerals to perform prospecting operations:
4. Time duration demanded for prospecting operations:
5. Four sides (boundaries) description of the demanded prospecting area and
scale map:
…….……Zone………………………….District……………………………..
.Municipality and Village Development Committee (VDC)…………………….
Place ………………………………..Topo Sit No…………………………
Main sign………………………East from……………..………………meter
West from……………… meter North from ………………………………….
Meter South from………………………meter total………………………………
Square km.
6. Details of the land for utilization of demanded area for prospecting
operations:
(a) Village settlement:
(b) Forest:
(c) River, Stream, bridge, road, public place etc:
(d) Type of land: cultivated/ uncultivated/ governmental/public:
(e) Whether there exists prospecting or mining operations or there has
been existing prospecting or opening mining operation within the
area demanded for prospecting operations:
(f) If there exists prospecting or mining area near by the demanded area,
details thereof:
7. Provision of Technicians:
1) If applicant himself
a) Professional qualifications and training:
b) Experience:
2) Other, if any,
a) Name and address:
b) Professional qualification and training:
c) Experience:
Applicant’s:
Signature:
Name:
Date:
Attached documents:
1. Proof of professional qualification and training certificate
2. Experience
3. Citizenship and company’s, firm’s and corporate body’s certificate
4. Work’s scheme

27Schedule-4
(Relating to Sub-rule (1) of Rule 7, Sub-rule (3) of Rule 9, Sub-rule (1) of Rule
15, Sub-rule (3) of Rule 17, Rule 23 and Sub-rule (3) of Rule 42)
Fees and Deposit Amount
Fees and Deposit Amount

c) For Export:
Export fee One Thousand Rupees or royalty as prescribed in Schedule 10.

27 Amended by the First Amended.

Schedule-6
( 29Relating to Sub-rule (2) of Rule 9 and
Sub-rule (1) of Rule 45)
Details of the Progress of Prospecting Operations
1. Name and address of the licensee……………………………
License No…………………………
Name of the minerals…………………………
Duration of progress report from………………….to ………….……
2. District where the area of prospecting operations is
located………………………Municipality/VDC.……………………………..…
Ward No. ……… Place ………………………….
3. Exploration Area:-………………………………..
4. Geological Map ………………..……. Area……………….……….. scale.
5. Geo-chemical exploration.
(1) Stream sediment sampling……….. method ………….. No.
(2) Soil Sampling…………………..
(3) Rock Sampling……………………..
(4) …………………………..
(5) …………………………..
6. Geo-physical Exploration:
(1) ……………………….
(2) ………………………..
(3) ………………………..

29 Amended by the First Amended.
7. (a) Physical Exploration:-

(b) For underground exploration only:-
Number Dimension (M) L×B×H Volume
(1) Adit/ Tunnel
Driving Method:
a. Drilling
b. Blasting
c. Support system
d. …………………
(2) Map and sketch
(3) Machinery and other materials
(4) Mining environment
a. Light
b. Water
c. Ventilation
d. Safety
8. The proof of sample and authentic analysis to submit:
(1) Chemical analysis
(2) Metallurgical analysis
(3) Other
9. Grade and tonnage
10. Exploration cost
11. Market study
Applicant’s
Signature:
Name:
Date:

Applicant’s
Signature:
Name:
Date:
Attached Documents
1. Proposed scheme of mining opening operation.
2. The detail report of the prospecting operation if it was carried out by
him/herself.
3. Certificate of professional qualification, experience, citizenship and
certificate of the company, firm or organization.
4. A deed of consent letter etc. of the landowner or other agencies related with
the land of mining area.
5. A letter of consent of the related agencies, if the proposed mine is located
within Five meters from the public road.

Schedule-9
(
30Relating to Sub-rule (2) of Rule 17 and
Sub-rule (2) of Rule 45)
Progress Report of Annual Production of Minerals
1. Name and address of the License holder:
License No. …………………. Name of the Minerals ……………….
………………. Duration of the progress report (Fiscal year)…………
2. District where mine is located ………………. Municipality/ V.D.C
…………………………. Ward No. ………. Place …………………..
3. Mine Development:-
a. Detail of lining, drilling and explorative opening:
b. Study on detail technological opening and refining feasibility:
c. Study on detail market and economic feasibility:
d. Evaluation of final feasibility:
4. Mine (Productive) Development:-
a. Mine productive project promotion and implementation.
b. Operation of regular mine industry.

30 Amended by the First Amended.
c. Scheme for mine development.

Applicant’s
Signature:
Name:
Date:
Note:
1. While filling the details according to this Schedule, only the necessary
details shall be filled.
2. If the space is inadequate to fill the details in the Schedule, they shall be
filled up in a separate page.

31Schedule-10
(Relating to Sub-rule (1) of Rule 21)
Royalty Rate

Applicant’s
Signature:
Name:
Date:

Schedule- 14
(Relating to Sub-rule (1) of Rule 46)
Annual Land rent
1. For the First Five years One Thousand Rupees upto One square k.m.
and thereafter at the rate of Five Hundred Rupees for per additional
square k.m.
2. For the Second Five years Three Thousand Five Hundred Rupees upto
One square k.m. and thereafter at the rate of One Thousand Seven
Hundred Rupees for per additional square k.m.
3. For the Third Five years Five Thousand Rupees upto One square k.m.
and thereafter at the rate of Two Thousand Five Hundred Rupees for
per additional square k.m.
4. For the Fourth Five years Seven Thousand Five Hundred Rupees upto
One square k.m. and thereafter at the rate of Three Thousand Seven
Hundred Fifty Rupees for per additional square k.m.
5. For the Fifth Five years Nine Thousand Rupees upto One square k.m.
and thereafter at the rate of Four Thousand Five Hundred Rupees for
per additional square k.m.
6. For the Sixth Five years Eleven Thousand Five Hundred Rupees upto
one square k.m. and thereafter at the rate of Five Thousand Seven
Hundred Fifty Rupees for per additional square k.m.
7. For the Seventh Five years Thirteen Thousand Rupees upto One
square k.m. and thereafter at the rate of Six Thousand Five Hundred
Rupees for per additional square k.m.
65
8. For the Eighth Five years Fifteen Thousand Five Hundred Rupees
upto One square k.m. and thereafter at the rate of Seven Thousand
Seven Hundred Rupees for per additional square k.m.

(Source: Nepal Law Commission)

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