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Socio-economic and Environmental Impact Analysis of Khothagpa Gypsum Mine Karma Galay between 2008-06 and 2008-08

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 Socio-economic and Environmental Impact
Analysis of Khothagpa Gypsum Mine
Karma Galay*
Part 1. Overview of mining sector in Bhutan
Bhutan is rich in mineral resources such as
dolomite, limestone, slate, and coal. It also has
small deposits of marble, quartzite, granite, talc,
iron ore, and pink shale. Mining in Bhutan
started in the early 1970s and it was mostly
carried out by the government enterprises.
GraduaUy under the auspices of policy of
privatization, mining sector operations were
privatized. Mining activities are now solely
carried out by private agencies. Currently, there
are 27 private mining companies. In addition to
the mining companies, there are 83 mineral
based industries. In terms of geographical
spread, most of the mineral based industries are
located in the west, south and south eastern
parts of the country. See chart 1.
Chart 1: Geographical spread of mineral based
industries
Senior Researcher, The Centre for Bhutan Studies
 Impact Analysis of Khothagpa Gypsum Mine
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Although mining is one of the modern economic
activities pursued by Bhutan since the start of
planned development, mining sector has not
expanded much. The performance of mining
sector has been very erratic with some years
experiencing negative growth rates. See chart 2.
Chart 2: Growth rate of mining sector
51
 Journal of Bhutan Studies
The contribution of mining sector to GDP has
been very low; it constituted less than 2% of
GDP for most of the years. See table 1.
Table 1: Share of mining sector in GDP
Year
% share
1997
2.1
1998
1.8
1999
1.7
2000
1.6
2001
1.7
2002
1.7
2003
1.6
2004
1.4
2005
1.5
2006
2.3
However, as we see in Chart 2, mining sector is
experiencing some upsurge in the recent years.
In 2006, mining sector experienced a growth
rate of 63%. More business agencies see
engagement in mining activities as a lucrative
business and have taken up mining business in
the recent years.
While mining sector certainly could play an
important role in the industrial development and
benefit the country in terms of generation of
employment and revenue, it is also a sector that
could bring about a wide range of costs to the
society. Some of these costs could be felt in
short-term and whtie many others could be felt
over and after much longer period of time.
It is in this context that the current study has
been initiated. As a baby step towards studying
overaU impacts of mining sector on Bhutan's
economy and society, a case study of mining of
52
 Impact Analysis of Khothagpa Gypsum Mine
gypsum in Khothagpa under Pemagatshel
dzongkhag was carried out. The study looks at
the economic, social and environmental impacts
of the gypsum mining on people living nearby as
well as at the national level. However, given the
non-existence of economic and social data on
the communities, the impacts outlined in the
study are mostly perceived ones.
Part 2: A brief background of Khothagpa gypsum
mine
The gypsum mine is located at Khothagpa
viUage, some 13 kilometers below Pemagatshel
town. It has a total mine area of 26.67 hectares.
Mining first began in the early 1980s and was
managed by the department of Geology and
Mines. Subsequently for a brief period of time, it
was managed by the Penden Cement Authroity.
In 1993, government leased out the mine to
Druk Satarr Corporation for a period of 10 years.
The corporation won the bid to operate the mine
for another 10 years in 2004.
Using semi-mechanized open cast method, the
corporation mines gypsum which is mostly
exported to India. A small proportion is exported
to Bangladesh and Nepal, and a small amount
sold to Bhutanese buyers. In 2002, the
corporation, along with some other promoters
set up Druk Plaster and Chemicals Limited. As
it is a spin-off company, it is managed by the
same team of managers. The two companies,
however, have separate staff at the field offices.
Remaining part of paper is organised as follows:
part three highlights economic impacts; part
four social impacts; part five health and
environmental   impacts;    and   part   six   some
53
 Journal of Bhutan Studies
concluding remarks. The impacts outlined below
are based on random interviews of some farmers
of Khothagpa, Nangkor, Yalang, Shali, Gamung,
and Jaipobrangsa vUlages; businessmen of
Khothagpa and Pemagatshel; gup of Shumar
gewog; truckers; Chief Executive Officer and
some employees (both permanent and
temporary) of the corporation as well as the on-
site observations of the author of this paper.
Part 3: Economic impacts
A. Positive impacts
Most publicized economic benefits of gypsum
mining are the following:
i) Generation of foreign exchange
Over 90% of gypsum that the corporation mines
is exported to India, Bangladesh and Nepal.
Since India is the main buyer, it earns a
significant amount of rupees. It contributes
towards butiding up of rupee reserves. In the
recent years, rupee shortage has inconvenienced
Bhutanese businessmen. Through its rupee
earning, it can be said that the corporation
contributes towards easing the problem.
Furthermore, it contributes towards overall hard
currency earnings of the country. Bangladeshi
and Nepalese buyers pay in US dollars.
FoUowing chart shows the export earnings for
the first six months of 2008.
Chart3: Rupee value of gypsum exports (January
08^June 08)
54
 Impact Analysis of Khothagpa Gypsum Mine
160 -,
140
120
100
80
60
40
20
0
138.6
3.4
•                 •
3.2
Bangladesh
India
Export destination
Nepal
ii) Generation of government revenue
The corporation generates revenue for the
government payment of bid value, corporate
income tax, royalties, mineral rent, surface rent
and environment restoration fund. Between
January 1994 and December 2007, the
corporation has so far paid Nu. 438.95 million
as tax and rents. See chart 2.
Chart 4: Various forms of payments made to the
300 -
250 -
tf)
£    200 -
1    15°~
a;
.2    100 -
rs
>
50 -
0 -
Zby.e
139.4
160.1
6.9
8.9
Env.
restoration
JVtineral
Rent
Royalty      Corporate
tax
Forms of payment
Bid value
Surface
rent
 Journal of Bhutan Studies
government
As a percentage of national revenue, the
contribution of the corporation is less than 1%
for most years. See table 2.
Table 2: Share ofDSCL's contribution in the
national revenue
Year
DSCL's
contribution
(in millions)
National
revenue
(in millions)
% contribution
of DSCL
1999
17.1
4381.1
0.4
2000
21.6
4671.5
0.5
2001
20.4
5100
0.4
2002
20.9
4785.3
0.4
2003
24.7
5055.2
0.5
2004
84.9
6066.1
1.4
2005
46.3
6902.9
0.7
Source: Statistical Yearbook of Bhutan, 2003 & 2007
and information from DSCL.
However, when DSCL's contribution to the
government revenue is juxtaposed with its
overaU turnover or gross income, it amounts to a
high percentage of its turnover. From the point
of view of a single corporate entity, the amount it
pays to the government is very high; for no year
since its operation has its contribution been
lower than 19% of its turnover. See table 3.
Table 3: DSCL's contribution to the national
revenue as percentage of its turnover
Year
Turnover
Contribution
% of turn over
1994
31,748,126.00
9,785,557.00
30.8
56
 Impact Analysis of Khothagpa Gypsum Mine
1995
34,883,821.00
6,759,223.00
19.4
1996
46,439,104.00
12,267,424.00
26.4
1997
54,386,017.10
13,458,329.00
24.7
1998
59,908,815.20
14,541,117.00
24.3
1999
84,960,303.40
17,132,168.00
20.2
2000
96,227,307.00
21,622,053.00
22.5
2001
106,919,159.00
20,373,601.00
19.1
2002
108,654,288.00
20,948,637.00
19.3
2003
129,590,773.00
24,749,117.00
19.1
2004
143,659,434.00
84,928,763.00
59.1
2005
181,626,300.00
46,344,022.00
25.5
2006
261,333,265.00
74,188,966.00
28.4
2007
237,572,321.00
71,852,267.00
30.2
iii) Broad based ownership ofthe corporation
The structure of ownership of the corporation is
broad and diversified. When the corporation
came into being in 1993, His Majesty the Fourth
King commanded it to sell its shares to the
people of six eastern dzongkhags. FoUowing this
command, 30% of the company's shares were
sold to people of six eastern dzongkhags. Thanks
to the farsighted vision of His Majesty, many
farmers from six eastern dzongkhags own shares
and receive dividends every year from the
company. However, number of shares owned by
farmers is small and the number of shareholders
varies widely between dzongkhags with
Pemagatshel accounting for the highest.
Table 4: Distribution of DSCL shares
57
 Journal of Bhutan Studies
Name
No. of
shareholders
No. of
shares
% share
Promoters
8
182,272
40
Central monastic body
1
155,112
34
Public of Pemagatshel
431
43,593
10
Public of Trashiyangtse
324
29,678
7
Public of Trashigang
179
24,314
5
Other buyers
37
8,071
2
Public of S/jongkhar
288
5,784
1
Public of Mongar
19
4,552
1
Public of Lhuntshe
5
3,167
1
Total
1,292
456,543
100
Note:     Institutional     shareholder
shareholder are taken as same
and     individual
Except for 2001 and 2002, the shareholders
have been paid dividend every year. By 2007,
the company disbursed over Nu. 86 millions as
dividends to various shareholders. (See table 5
for details). The company also issued some
bonus shares and those shareholders who had
only one share initially now own a minimum of
14 shares. It can be said that through the
disbursement of dividends, the mining operation
not only benefits the promoters and people of
Pemagatshel but some people from rest of the
eastern dzongkhags as well.
Table 5: Year-wise disbursement of dividends
Year
Dividend disbursed
1994
831,167
1995
1,853,500
1996
1,647,125
1997
2,362,500
1998
7,762,500
1999
5,067,200
58
 Impact Analysis of Khothagpa Gypsum Mine
2000
5,067,200
2001
12,161,280
2004
4,560,480
2005
15,201,600
2006
15,979,005
2007
13,696,290
Total
86,189,847
iv) Generation of employment
Mining activities usuaUy generates formal as
well as informal employment opportunities. AU
the workers (both regular and wage workers)
employed at the company are Bhutanese. It
employs 20 staff at its head office in
Samdrupjongkhar, 52 at its field office in
Khothagpa, and 13 at the field office of its sister-
concern Druk Plaster and Chemicals Limited in
Khothagpa. Thus, the company provides formal
employment to 85 individuals. Most of these
employees, particularly those at the field offices
are from Pemagatshel; over 46% of employees at
the field office of Druk Satair Corporation
Limited and 33% of employees at the field office
of Druk Plaster and Chemicals Limited are from
Pemagatshel.
In addition to the formal workers, the companies
employ wage or informal workers. During the
time of this research, there were 27 wage
workers at Druk Plaster and Chemicals Limited
and 37 at Druk Satair Corporation Limited.
These workers are paid Nu. 100 per day. Over
66% of them are from Khothagpa and a few
other vUlages under Shumar gewog and 48% of
the employees are women.
59
 Journal of Bhutan Studies
Number of informal employees could be much
higher if we include truckers engaged in
transporting gypsum from the mine. During the
time of this research, there were 91 trucks that
were engaged in transporting gypsum on regular
basis. Except for 12 trucks, rest of them had
handy boys. This means that about 170 people
(91 + 79) were engaged in trucking. Besides,
those truckers that carry gypsum on regular
basis, several other trucks show up daily to
carry gypsum. Most of these drivers are in their
early twenties (mean age was 24) and had
attended school. It could be argued that if it had
not been for the corporation which provides
them with job opportunities, these young people
would have been elsewhere in the country
looking for job, which is increasingly difficult to
find.
Interviewees said that the opportunities to find
employment, particularly part time work as a
wageworker, have dwindled over the years. The
management has mechanized some aspects of
mining operations and the need for wage
workers declined significantly. Management said
that the deployment of wage workers could
decline further in future as it mechanizes
further.
v) Business opportunities
During the time of this study, there were eight
shops in Khothagpa. Most of the shopkeepers
said that people working at the mines were their
main customers. Besides shopkeepers, people
also benefit through rental income that they
earn. More than 10 farmers living nearby the
mine have rented out their houses to truckers
60
 Impact Analysis of Khothagpa Gypsum Mine
and employees of the mine. A few farmers
interviewed said that their living standard has
improved due to supplementary income they
were able to earn through renting and off-season
work at the mine.
The corporation assures constant business to
the truckers. Most of the trucks belong to the
people of Pemagatshel. See table 6 for district
origin of trucks currently employed at the mine.
Table 6: No. of trucks employed by DSCL by
districts.
Districts
No. of truck
1
Pemagatshel
46
2
Trashigang
13
3
S/jongkhar
14
4
Thimphu
5
5
Mongar
5
6
Paro
2
7
Haa
1
8
Bumthang
1
9
T/yangtse
1
10
Trongsa
1
11
Wangduephodrang
1
12
Others
1
13
Total
91
A few truck owners that were interviewed for
this study said that the constant engagement at
the mine to transport gypsum provided them
with an assured and convenient business
opportunity. The monthly income that they get
from hiring of their trucks enables many of them
to pay back their loans on time. It must also be
noted    that    many    of    the     truck     owners,
61
 Journal of Bhutan Studies
particularly those from Pemagatshel, were able
to own one because of constant business they
got from the mine. So far the corporation has
paid Nu. 483.07 millions as transport charges to
various truckers employed at the mine. See table
7.
Table 7: Charges paid to truckers for transporting
gypsum
Year
Amount
1994
1,491,379.0
1995
7,915,309.0
1996
9,849,145.0
1997
19,037,759.4
1998
19,724,084.4
1999
28,981,762.5
2000
25,588,849.0
2001
36,841,213.0
2002
37,152,416.0
2003
40,106,849.0
2004
46,769,979.0
2005
59,580,583.0
2006
82,544,245.0
2007
67,487,589.0
Total
483,071,162.35
vi) Convenient means of transport
There is no public transport between
Pemagatshel and Samdrupjongkhar or
Trashigang. In addition to carrying gypsum,
trucks ferry people and goods between
Pemagatshel and Samdrupjongkhar. People say
that since there are trucks plying throughout
the day, they are able to find transport to go to
Samdrupjongkhar or nearby places at any time
62
 Impact Analysis of Khothagpa Gypsum Mine
of the day. They also say that if they go in a
truck that leaves early to Samdrupjongkhar,
they can return to Pemagatshel the same day,
enabling them to save time.
B. Negative impacts
As much as there have been positive impacts,
there have also been negative economic impacts.
A few of them are discussed below:
i) Siphoning off of labour from other economic activities
Because of the readily available job
opportunities that do not employ them but
warrant assured flow of income, people have
been discouraged from taking up other economic
activities. One such opportunity for people in
Pemagatshel, particularly for those in Shumar
gewog, is to work as wage workers at the mine.
An orange pulp processing unit was set up a few
years ago with some 28 farmers as members;
now the unit has only 15 members. Likewise, a
silo that was set up recently has not attracted
many members; initiaUy it had 50 members but
now it has only 18. The Dzongkhag Agriculture
Officer and the Agriculture Extension Agent of
Shumar gewog said that the problems of wildlife
depredation on the one hand and the avatiabtiity
of economic opportunities outside agriculture on
the other were collectively making many farmers
to quit farming. Such developments could have
significant repercussions on the policy of
ensuring food security in the country.
ii) Decreased horticultural productivity
Farmers living nearby the mining site,
particularly those households nearby the Druk
63
 Journal of Bhutan Studies
Plaster and Chemicals Limited, said that yield of
their oranges have gone down significantly over
the last few years. Farmers alleged this decline
to effects of dusting from blasting, factory where
gypsum powders are produced, and trucks that
transport gypsum. Farmers said that dusting
during flowering hampers poUination and
ultimately the fruiting. Dusting after fruiting
affects colour of oranges; oranges turn dark
greenish from continuous dusting. People also
aUeged that dusts stunt the size of oranges and
when they market them, they do not get good
prices. Mr. Tshechula said that untti few years
ago, he used to earn around Nu. 17,000-18,000
on average every year but for the past two years,
he earned only about Nu. 7,000 from sale of his
oranges. Decline in orange production is also
caused by death of trees. Ms. Tera Wangzom
said that about four orange trees have died in
her orchard from extensive dusting decreasing
her earnings from sale of oranges significantly.
She said that earnings from the sale of oranges
used to be around Nu. 20,000 during the
previous years but last year she earned only Nu.
10,000.
iii) Absence of public transport
Because most people travel to and from
Pemagatshel by trucks, it has not attracted any
individual to operate a public transport there.
Absence of public transport is seen as a problem
by civti servants and police personnel working
there. They say that when they go on transfers,
they are not able to find transport that can
accommodate aU of their belongings and family
members. Some civil servants also say that the
absence of a public transport is not good for
64
 Impact Analysis of Khothagpa Gypsum Mine
Pemagatshel in the long-run; should ever the
mining close down or the route of transport of
gypsum changes in future, many people in the
district will have no means of transport untti a
public transport is instituted.
iv) Loss of customers
Druk Satair Corporation has set up a grocery
shop that supplies ration and other essentials to
their employees. It's a legal establishment with
formal license and sells stuffs at much cheaper
rates than other shops in Khothagpa. While the
employees of the corporation buy from these
shops, they do buy as much as they used to do
before the setting up of canteen. Shopkeepers
complain that the canteen was cutting on the
viabtiity of their business.
v) Increase in local wages
Some farmers complained that as most of the
able bodied were working at the mine, it was
difficult to find workers during agricultural
season. They said that even if they found some,
they refused to work for wages less than what
they got at the mine, thereby pushing up the
local wage rates and making it expensive for
many farmers to hire workers.
Part 4: Social impacts
Social impacts are not as distinctly defined as
economic and environmental ones. It would
require one to spend much longer time and
immerse with community to find or understand
the social impacts of the mine. The issues
discussed here are, therefore, at best perceived
ones   and   some   of  them   are  just   a   means
65
 Journal of Bhutan Studies
towards ultimate social impacts and are not
themselves the impacts.
A. Positive impacts
i) Contribution to purchase of land for construction of
school
The corporation contributed Nu. 250,000, close
to 50% of the total cost when the community of
Khothagpa bought land for construction of a
primary school. A primary school was built in
2004. Without the contribution from the
corporation, it would have been difficult for the
people of Khothagpa to buy the land. The
presence of school has enabled many young
chtidren of both people of Kohthagpa as weU as
the employees of the mine to attend school. The
company also contributed 60 bags of cement
when the new butiding was butit in 2005.
ii) Contribution to Health Trust Fund
The corporation contributed Nu. 1.5 miUion to
the Health Trust Fund. The corporation's
management claims that they were one of the
first Bhutanese organisations to make such a
contribution and it sparked off similar donations
by other corporate bodies, enabling a good flow
of donations from within the country.
iii) Contributions for organisation of annual religious
ceremonies
The corporation contributes Nu. 1.5 million
every year to Yongla Dratshang to conduct
drubchen. It has been making this contribution
since 1998. Besides, the corporation has also
contributed    Nu.     150,000    to    making    of   a
66
 Impact Analysis of Khothagpa Gypsum Mine
thongdrel at Pemagathsel Dratshang. The
corporation also helps the dzongkhag
administration organise annual Moenlam
Chenmo by His Holiness the Je Khenpo. In
2007, the corporation contributed Nu. 20,000 to
the community of Khothagpa during its annual
tshechu. It also allows the people of Khothagpa
to use its trucks for free to fetch firewood for
annual tshechu at the community temple. WhUe
the annual tshechu of Khothagpa is attended by
members of its community and a few others
from nearby vUlages of Bartseri and Denchi,
Yongla Drucbchen is attended by people from
several other vUlages. Since tshechus and other
annual religious ceremonies act as a forum for
people to come together, it can be said that the
corporation, through its financial contributions,
is helping maintenance of community vitality in
these viUages.
iv) Employment of students
During winters when the students are on
vacation, the company employs between 80-90
students. Management says that students are
employed even when there is no labour shortage
at the mine site; they are recruited largely to
enable them to make some income.
v) Other social contributions
Whenever someone in the viUages nearby the
mine site faUs sick, the corporation provides its
vehicle to transport the sick to the hospital. It
has donated two television sets with DVD
players and two room heaters to the general
hospital. The corporation allows the children of
Khothagpa and Denchi studying at Nangkor
High and Pemagatshel Middle Secondary schools
67
 Journal of Bhutan Studies
to use their school bus both to and from their
schools. It has donated a refrigerator to Nangkor
Higher School which has enabled the school
proper storage of vegetables and other
perishable items required for the students' mess.
B. Negative impacts
i) Family disorganisation
The mine operates for sixteen hours: from 7 a.m.
tiU 11 p.m. This requires the workers to work in
shifts. This long hours of the mine's operation
causes inconveniences to the workers and their
families. When they are required to work in the
first shift, i.e. from 7 a.m. through 3 p.m. they
have to wake up early and leave for work. This
doesn't aUow them to have breakfast with their
family. For the workers who work the second
shift, they are late for dinner and by the time
they are home, their children and spouses are
already asleep. This doesn't aUow families to
spend much time together.
ii) Inconvenience in participating in community events
The need for consistent and reliable workforce
that does not take time off on a seasonal basis
creates a situation in which the benefits of
employment in the mines are often offset by the
social and famtiy disruptions and loss of
opportunities to participate in community life.
Like in famtiy affairs workers, particularly the
wage workers working at various shifts of the
mine's daily operation are only partially able to
participate in community events such as annual
tshechus. The corporation operates seven days a
week and sixteen hours a day; this
inconveniences many workers from participating
68
 Impact Analysis of Khothagpa Gypsum Mine
in community events. For instance, a wage
worker sought a replacement for him when he
was attending mask dance practice sessions for
the annual community tshechu.
iii) Migrant workers
Many local people complain that the presence of
migrant workers, mostly from Bhangtar, has
deprived them of opportunities to work at the
mine. These migrant workers stay and work at
the mine site regularly. The need for consistent
and reliable workforce that does not take time
off on a seasonal basis forces the management
of the mine to prefer migrant workers,
disallowing people of the local areas from taking
advantages of opportunities to work part time at
the mine.
iv) Inadequate housing
Most of the migrant workers that have come to
work at the mine are living in make-shift
structures whtie a few of them live in hired
rooms in the houses of the nearby people. The
permanent employees of the corporation live in
semi-permanent houses. AU these structures are
unfit for decent living. This poor quality of
housing has potentials to cause diseases to
employees and their chtidren, if none of them
are suffering from one already.
v) Safety problems
People complained of threats to safety of their
animals and children from speeding and
overloaded trucks. Empty trucks returning from
Samdrup Jongkhar speed up to arrive on
stipulated time for loading at the mining site. So
69
 Journal of Bhutan Studies
far, there had been no accidents but people are
worried of some mishaps in the future. People
also complain that the trucks overload
themselves; sometimes almost twice their legal
capacity. This not only poses the risks of
accidents but because the road from mining
area to the Trashigang-Samdrupjongkhar
highway is aU uphtil, the overloaded trucks
produce more noise and vibration to people
living by roadsides.
vi) Other social problems
There is no prostitution in the legalistic sense
but people do mention of prevalence of overt
promiscuity among or between workers of mine
and sister agency- Druk Plaster and Chemicals
Limited. This has a high chance of spreading
sexuaUy transmitted diseases. There have also
been some five or six cases of local women
having children from iUegitimate relationship
with drivers. Gup of Nangkor said that it was
difficult to track down the fathers of these
chtidren.
Part 5: Environmental and health impacts
A. Environmental impacts
AU the mining operations are inspected regularly
by the National Environment Commission to
check that their operation does not cause no or
tittle footprints to the nature. Despite these
regular visits by the staff of the National
Environment Commission, mining operations
are causing significant damages to environment.
Given the technicalities of environmental
impacts which the author of the study is not
70
 Impact Analysis of Khothagpa Gypsum Mine
familiar with, only obvious ones are reported
below.
i) Air pollution
Dusts generated by various mining activities are
of major concern to the people living in the
nearby areas. Dust is generated by blasting,
loading and haulage, vehicular movements, open
air disposal of waste rocks, driUing, and
crushing. These fugitive dusts from mine site as
weU as from the factory of Druk Plaster and
Chemicals Limited are added to the air and
eventuaUy settle down as fine dusts on nearby
trees and houses. People said that dusts were
dirtying their houses as well as making their
fodder plants unpalatable for animals to
consume. People say that the level of hygiene in
their community has deteriorated due to
presence of so much of dusts in the air; a few of
them said that the problem was particularly
worse during winters. Company claims that it
sprays water along the road to reduce dusts
emission due to vehicular movements but people
complain that the company does not carry out
this function faithfully. As discussed under
economic impacts, dusting has hampered
horticultural productivity in the nearby areas.
People also complain of unpleasant odour that
they smell after blasts at the mine site.
ii) Noise and vibration
Main sources of noise and vibration are blasting,
operation of heavy machineries, and movement
of trucks. People aUege that vibration from
blasts, operation of large machineries at the
mine, and movement of trucks vibrates their
houses, causing their roof materials to slide. Mr.
71
 Journal of Bhutan Studies
Karma Gyeltshen of Borangchilo complained
that every year he spends two or three days
fixing the roof materials that slide down due to
vibration caused by blasts. He said that since he
uses slates, some of them get damaged during
the repairs, forcing him to find new ones.
People also allege that the cracks in some
government buildings nearby the dzong located
about two kilometers from the mining site are
caused by vibration from the blasts. The
management of the mine however argues that
these allegations are baseless as not a single
house in the immediate neighbourhood where
the vibration is supposedly stronger has suffered
any cracks.
The mine starts its operation at 7 a.m. and goes
on ttil 11 p.m. People of Borangchilo viUage,
which is located across the mining site,
complained that the noise of vehicles and
machineries affects their sleep and quiet
moments. They said that due to deafening noise
from the mine site, they were not able to hear
the sounds of wild animals when they entered
their fields, losing substantial amount of their
crops to wild animals every year.
iii) Water pollution
There are no complaints of pollution of drinking
water as all the water sources are from places
above mine site. However, rock and mud wastes
that are unmindfully disposed off down the
slopes get deposited into the stream below. This
has caused stitation of its banks. Disposal of a
large amount of wastes into the stream
increases  its  sediment load.   People  said  that
72
 Impact Analysis of Khothagpa Gypsum Mine
during monsoons, when the volume of water
increases in the stream, it floods causing
damages to plants and aquatic lives as well as
causing great risks to people living downstream.
Picture a:  Wastes sliding down to the stream
iv) Soil erosion
The mine site does not have a proper place to
dispose off the wastes and debris generated by
blasts. Rock and mud wastes are disposed off
unmindfully down the steep slopes below the
mine site. Bigger rocks and other debris slide
down to the stream below while smaller ones are
left hanging loosely onto the slopes. The run-off
water after heavy rainfalls washes down these
materials. During such process, not only are the
lose materials carried away but also the intact
materials on to which the lose materials hang
73
 Journal of Bhutan Studies
also gets washed away, causing blanketing of
the bottom of the gorge and the banks of the
stream.
Picture b:  Truck unloading debris on to the slope
74
 Impact Analysis of Khothagpa Gypsum Mine
Picture c:  Unloaded debris sliding down the slope
75
 Journal of Bhutan Studies
v) Physical damages
What has been a group of some nine households
and their farmlands along with pristine forests
around some 26 years ago has now been
converted into a brown opencast mine site. Trees
and plants have all disappeared and the
topography has been altered significantly. What
has been a gentle slope is now converted into
steep slopes. People of Borangchilo, a vtilage on
the opposite side of the mine, say that the site
has certainly degraded in its aesthetic beauty.
Another physical damage associated with the
mine is degradation of roads between
Tsheringkhor and Pemagatshel. They said that
a large number of heavtiy loaded trucks plying
the road has damaged roads in many places.
Picture d:  Scar caused to the landscape by
mining
76
 Impact Analysis of Khothagpa Gypsum Mine
77
 Journal of Bhutan Studies
Picture e: Close-up view ofthe scar
B. Health impacts
A few interviewees of this study reported that
the frequency of occurrence of diseases such as
cold and cough which people believe are
commonly caused by presence of more dusts, is
more now as compared to previous years. There
was no data to substantiate such a claim. The
district medical officer said the hospital received
two or three accident cases from the mine site
every week.
Part 6: Summary and conclusions
This study points out to a number of
conclusions. The mining of gypsum at
Khothagpa does have some economic benefits.
At a national level, it contributes to the
exchequer and helps our country to earn rupees
and hard currency. Locally, people benefit from
part-time jobs and renting of their extra space in
their house to migrant workers. Local business
community benefits from the extra customers
generated by the mine. Truckers are able to
deploy their trucks in transporting gypsum on
regular basis. In the social sector, the
corporation provides financial support to
organise some important community religious
ceremonies and has made donation of goods for
social causes. These tidbits of contributions that
the corporation makes, however, are very
sporadic.
People are of opinion that benefits, especially the
economic ones, are shrinking every year. They
say  that  during  the  first  lease  period  (1993-
78
 Impact Analysis of Khothagpa Gypsum Mine
2003), more local people were able to work at
the mine and earn some extra cash. During the
second lease, migrant workers have arrived from
other parts of the country, competing with the
local people for jobs at the mine. Besides, due to
deployment of more dozers and rock breakers,
the need for manual workers has been reduced
significantly; the need for manual workers wiU
be even lower when more dozers are deployed,
which the management intends to do in future.
While benefits or positive impacts are small and
shrinking, mining operation has caused several
negative socio-economic and environmental
impacts, most of which cannot be quantified.
Interviewees said that many people were
discarding their farming practices to embrace
non-farm work such as working at the mine,
which warrants them some assured monthly
income. This has not only led to fallowing of
land but also to labour shortages and increased
wages in the local areas. Horticultural
productivity in the areas nearby the mine has
decreased. The management compensates three
households annuaUy but there are sttil both
moral and economic issues involved in such
compensation packages. The management of the
company has agreed to compensate two
households Nu. 7,500 each every year until the
manufacturing of plaster of paris is
discontinued. Manufacturing of plaster of paris
may conveniently stop when it is no longer
profitable and farmers wiU not get
compensation. But many orange trees would
have died by then and the health of surviving
ones hampered seriously. For several years
down the road, these households would neither
79
 Journal of Bhutan Studies
get compensation nor would earn anything from
their horticulture.
Cohesive family life and participation in
community events are important aspects of
Gross National Happiness. The shift system
induced by 16 hour daily work period for the
mine is causing inconvenience to social life of
the community. People are not able to spend
time with their famtiy and partake in community
events. Some workers are of opinion that despite
handsome profits that company makes, they are
paid very low. Some workers wondered if it was
worth inhaling so much of dusts for just Nu.
100 a day.
The mining operation has caused some serious
ecological footprints. Given the technicalities of
the environment impacts, this study has
outlined only those that are obvious to a lay
person's eyes. A huge scar has been inflicted to
the landscape and it will only worsen as more
trees are cut and more rock faces are blasted.
Ensuing soti has resulted in siltation of a stream
below. If researches elsewhere have found that
siltation and flooding ktils aquatic lives, it must
also be so those aquatic organisms of the stream
below the mine and others that it joins
downstream. Continued mining could pose a
serious challenge to the communities nearby.
Not only there be more vibration, noise and
dusts but the stability of the whole slope could
be threatened as the company digs in deeper
every year. There are viUages adjacent to the
mine; some day, if not any time soon, these
viUages would face serious problems of
environmental instabtiity.
80
 Impact Analysis of Khothagpa Gypsum Mine
In the final analysis, it can be said that the
mining operation does have benefits as weU as
costs. Although this study has attempted to
pass some judgments in that it is of the opinion
that there are more costs than the benefits,
more detailed study involving multi- disciplinary
team would be required to see whether the
benefits outweigh costs or the other way round.
Also, given the ownership pattern of the mine,
which is very broad and diverse, the findings of
this study may not be applicable to other mines
with different patterns of ownership.
81

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