The mining and natural resources industry in Nepal is an emerging sector that holds substantial potential given the country’s geological profile. Nepal is believed to have deposits of minerals such as limestone, silica, precious and semi-precious stones, and metallic minerals, as well as significant forest and water resources. In recent years, interest from both domestic entrepreneurs and foreign investors in exploring and developing these resources – for instance, establishing cement plants based on local limestone quarries or mining certain minerals – has increased. Large-scale mining projects require heavy capital investment and technical expertise often brought in by international partners, which in turn introduces foreign investment and technology transfer considerations. The sector’s development is subject to a robust regulatory regime: the Department of Mines and Geology oversees exploration and mining licenses under the Mines and Minerals Act, environmental regulations must be met, and, in certain cases, large projects may fall under the purview of the Investment Board of Nepal. Local community relations and adherence to social impact requirements are also key, as natural resource projects can have significant local footprints.

Gandhi & Associates has extensive experience assisting clients in the mining, mineral processing, and natural resources arena. We advise on regulatory compliance for exploration and extraction, helping clients obtain reconnaissance permits, exploration licenses, and mining leases. Our team provides guidance on structuring investments and joint ventures for mining projects, including navigating foreign investment approvals and local ownership rules that may apply to natural resource exploitation. We conduct legal due diligence on mining targets or concessions, assessing the validity of licenses and any encumbrances or disputes. Our firm also assists operational projects with licensing and permits at different stages – such as environmental clearances, land acquisition approvals, and export permits for mineral products. Given the intersection of mining with other sectors, we draw on our cross-disciplinary expertise in areas like environmental law, corporate law, and infrastructure development to deliver well-rounded advice. Our goal is to help resource-based companies and investors operate effectively in Nepal, ensuring all legal safeguards are in place while advancing project milestones.

Representative Experience:

• Assisting a Chinese developer in the development of Nepal’s largest integrated cement manufacturing project (capacities of 12,000 TPD clinker production), a USD 360 million venture. Our work spanned obtaining mining and quarrying licenses for limestone, securing necessary environmental and land use approvals, incorporating the project company, arranging project financing, and negotiating a Project Investment Agreement with the Investment Board of Nepal (chaired by the Prime Minister). We are also advising the same client in acquiring a second license to develop another cement plant (6,000 TPD, USD 300 million project);
• Advised a French multinational mining company on exploring talc deposits in Nepal, including conducting legal due diligence on exploration licenses, advising on compliance with Nepal’s mineral licensing regime, and structuring the potential investment in collaboration with a local partner;
• Advised a Chinese state-owned bank on providing debt financing (USD 150 million) for a cement plant and its associated limestone mine in Nepal, which involved conducting a legal risk assessment of the mining rights and ensuring the financing structure accommodated Nepali security and project laws;
• Advised Osho Ventures (South Africa) on a mining exploration and foreign direct investment project in Nepal, including guidance on the regulatory approvals required for exploration and establishing a locally incorporated entity to carry out operations.