Major iron projects remain stalled

Iron mining projects at Dhaubadi, Jhumlabang and Phulchoki fail to gain momentum

 

Kathmandu, Aug. 23

Iron mining initiatives have failed to gain momentum at Dhaubadi in Nawalparasi (East), Jhumlabang in Rukum (East) and Phulchoki in Lalitpur – three large iron deposits in Nepal.

Jhumlabang, located in Bhume Rural Municipality-3 in Rukum (East), has the largest deposits of iron ore which is estimated to be around 200 million tons – almost double that of Dhaubadi in Nawalparasi (East).

The Department of Mines and Geology (DMG) was planning to begin the drilling work in Bhume by the end of 2025, but no progress could be made. The mine is tendered out to Ramesh Steel for 30 years but work is not begun, said Narayan Banskota, Information Officer at the DMG.

"The locals have filed compliants at the National Human Rights Commission, the government and the DMG demanding to halt the work at the site saying that it will damage the livelihood, culture and displace people who have been residing in the area for centuries," he said.

Chairperson of Bhume had updated the Department that the locals are not in the mood to allow even the study works other than the excavation. It might take more than a decade to begin exploration.

Minister for Industry Gauri Kumari Yadav has also shown interest in the matter and requested both the DMG and local government to facilitate in the project.

The site is located in a remote mid-hill area and is at a distance of 165 km from Ghorahi in Dang. The private company has demanded with the government for the construction of the basic infrastructure including roads, bridges and information technology.

"Access to the site is 7-km from the recently opened track of the Mid-Hill Highway but the industrial production of iron there needs a well facilitated road network because the processing industry should be established in Dang district," said Banskota while stating that construction of a cable way can also be a solution.

Likewise, Dhaubadi Iron Company Limited (DICL) is conducting the chemical analysis of the iron ore from the sites and is set to begin the preparation of the Detailed Project Report (DPR). Although the government had given priority to the DICL in its budgets for the past several fiscal years, substantive progress is not seen.

According to Dr. Janak Bahadur Chand, CEO of the company, the DPR is estimated to complete in one-and-a-half years.

The DMG reported that while 3000 tonnes of iron could be produced from ore processing at Jhumlabang, Dhaubadi can produce 1500 tonnes.

 

Highly potential Phulchoki

Meanwhile, iron mining at Phulchoki came to a complete halt after court, in Godavari Marble Case, barred commercial mining in ecologically sensitive conservation area as well. A private sector company Sagarmatha Iron has leased the iron excavation in Phulchoki but the government did not facilitate the company in clearing the policy hurdles, including that created by the court decision. It's been 12 years since the court barred mining and related works in Godavari and surrounding areas.

Feasibility study of Phulchoki iron deposit was conducted about 50 years ago and partial extraction was also conducted. The DMG said that iron ore from Phulchoki has the highest iron content of 56 per cent compared to 40 per cent of Bhume and 35 per cent of Dhaubadi.

It means processing one tonne of iron ore from Phulchoki can yield up to 560 kg of iron against 400 kg in Bhume and 350 kg in Dhaubadi. Production cost is also lowest at Phulchoki.

Banskota said that there is a possibility to extract iron ore at Phulchoki through underground tunnel from the outside of the Kathmandu Valley.

 

Second largest import

Iron and steel are the second largest imports of Nepal after petroleum products. The country imported iron and steel products worth Rs. 169.56 billion in Fiscal Year 2025/26. It was up by 7.37 per cent of previous year 2024/25 when imports of iron and steel stood at Rs. 162.50 billion. Steel and iron constituted 8.1 per cent share in the total imports.

Mining and quarrying sector is expected to contribute to 0.43 per cent to the national Gross Domestic Product (GDP) of the country in 2025/26 with an annual growth rate of 3.52 per cent. The total GDP of the country is expected to reach Rs. 6600 billion, according to the National Statistics Office.

Published in The Rising Nepal on 24 August 2026.