$AUMAS (0098.MY)$ TAWAU: The wealth of mineral resources in ...

$AUMAS (0098.MY)$ TAWAU: The wealth of mineral resources in Sabah, including gold, copper, iron ore, and coal, holds great potential to boost the state's economy.

However, it is understood that constraints such as lengthy licensing processes and the lack of guaranteed mining licenses are among the main factors causing investors to remain cautious about venturing into the industry.

The founder of a mining company in Tawau, Datuk Lo Fui Ming, said that although Sabah has been identified to have more than 34 mineral-rich areas, not many local or Peninsular companies dare to invest in mining due to its high risks.

He mentioned that his two companies were among the earliest local firms to explore gold mining at Bukit Mantri and Bukit Tundong, Balung, here since 2014.

“Based on my nearly 15 years of experience in the gold mining industry, previously almost no Malaysians dared to venture into the mining sector in Sabah.

“However, recently there has been a positive change as the state government has started issuing more exploration licenses to local companies and those from the Peninsula,” he said.

Lo said that this development brings new hope to Sabah’s economy because each mining area can provide approximately 300 to 600 job opportunities depending on the size and productivity of the mine.

However, he explained that mining activities require strict compliance with various legal provisions.

“Companies need to comply with the Mining Ordinance 1960 and the Sabah Land Ordinance Chapter 68, in addition to going through a lengthy approval process that can take up to seven years before operations can begin.

“The process begins by identifying potential areas, applying for an exploration license from the Department of Lands and Surveys (DLS) via Sabah Mineral Management Sdn Bhd (SMM), obtaining clearance from the Sabah Forestry Department, conducting feasibility studies according to JORC guidelines, before being brought to the State Legislative Assembly for the gazetting of the mining area,” he said.

He said that after gazetting and sealing the mining agreement, companies still need to obtain approvals for the Environmental Impact Assessment (EIA) and the Operations Management Scheme (OMS) before production can commence.

Lo also expressed investor concerns when the obtained exploration license does not guarantee that the company involved will be granted a mining license, even after incurring high exploration costs.

“The state government has the authority to award the mining license to another party. This situation frightens investors because exploration costs can reach tens of millions of ringgit without any guarantee of returns,” he said.

In this regard, he hopes the Sabah government can provide clearer and more reassuring guidelines regarding the relationship between exploration licenses and mining licenses to attract more investors.

He also suggested that the DLS should first coordinate with the Sabah Forestry Department before issuing exploration licenses so that companies do not face difficulties accessing approved forest reserve areas for exploration.

“If this process is simplified, Sabah’s mining industry could grow more rapidly and bring significant benefits to the state’s economy and local people,” he said.