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POLICY & LEGISLATION
Malaysia is a federation consisting of 14 states (Perlis, Kedah, Pulau Pinang, Perak, Selangor, Negeri Sembilan, Melaka, Johor, Kelantan, Terengganu, Pahang, Sabah, Sarawak and the Federal Territories of Kuala Lumpur, Labuan and Putrajaya). Mineral resources belong to the states, and in consequence, each state takes the responsibility for the approval and issuing of exploration licences and mining rights over land that lie within its border. However, decisions on issuing such rights are usually taken after consultation with Federal agencies such as the Minerals and Geoscience Department, the Department of the Environment, and other relevant authorities.
National Mineral Policy
Malaysia formulated a National Mineral Policy (NMP) in 1994. The primary aim of the Policy is to provide the foundation for the development of an effective, efficient, modern and internationally competitive regulatory environment for the mineral industry to expand, diversify and contribute to the nation's economic development. The thrust of the Policy in expanding and diversifying the mineral industry is through optimum exploration, exploitation, and utilisation of Malaysian's mineral resources. Emphasis is also given in the maximum use of research and development (R&D) and modern technology.
Two main legal instruments to help ensure the full and efficient implementation of the National Mineral Policy are as follows:
a) Mineral Development Act 1994
The Federal Act that provides the framework pertaining to powers of the Federal Government with regard to the inspection and regulation of mineral exploration and mining operations and other related issues. The Mineral Development Act came into force in August 1998.
The Mineral Development Act, 1994 spells out the do's and don’ts related to mining activities. These include the statutory requirements that have to be observed by the mine operator before, during and after the commencement of mining operations, such as the giving of notice of intention to carry out exploration work, submission of the appropriate mining schemes to the relevant authority for approval before commencement of operations, notice of intention to commence mining operations, and the carrying out of all related activities in accordance with good and safe practices and such environmental standards as may be prescribed under the Federal Act and any written law relating to environment. (In this case, the other written law that is applicable is the Environmental Quality Act of 1974, under which mining and quarrying are listed as prescribed activities that are subject to Environmental Impact Assessment.) The implementation of the Federal Law is carried out by the Department of Minerals and Geoscience Malaysia, which is the implementing department under the Ministry of Natural Resources and Environment.
b) State Mineral Enactment
This Enactment delineates the power and rights of State Governments with regard to the issuance of mineral tenements, such as the issuance of prospecting and exploration licences and mining leases, which fall under the purview of the State Governments. The State Mineral Enactment is currently at various stages of being adopted by the respective State Governments.
The State Mineral Regulations, which is the sub-set under this Enactment, spells out the detailed procedures that have to be followed when carrying out prospecting, exploration and mining operations in the States, and also contains the various forms that need to be filled for the different procedures.
The formulation of the new NMP and its attendant laws and regulations is to place the country's mineral resources industry on par with that of its neighbouring countries, as well as to respond to the rapid developments taking place in and around the region. Overall the Policy initiative was undertaken by the authorities to create a more conducive environment to attract investments, both local and foreign, into the mineral resources industry, to revitalise and to give it a much-needed boost.
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