Overview

Sudurpashchim Province holds a strategic position with access to both domestic and cross-border markets via India. The province is rich in untapped natural resources, has an abundant labor force, and benefits from growing infrastructure, making it an attractive destination for industrial and mineral development. With its vast potential, Sudurpashchim is poised to become a key economic driver in Nepal.

Key Locations for Industrial and Mineral Investment

· Godawari Industrial Area (Kailali)

· Tikapur Industrial Belt

· Gokuleshwar (Darchula) – Stone, Copper and Granite mining zone

· Khaptad Region – Herbal Processing and Mineral Prospects

· Chure Hills (Baitadi, Dadeldhura) – Iron, Lead & Zinc deposits

Metallic minerals:

Iron ore (Bhatgaon, Bajhang, Purchaudi, Lamuni Gad, Baitadi), Copper (Judia Marma, Darchula, Danfechuli, Darchula, Seri, Bajhang), lead (Dil Gad, Bajhang, Matailo Khola, Baitadi, Thulo Khola, Dadeldhura), Bismuth (Bamangaun, Dadeldhura, Bauli Gad, Bajhang),  Zinc(Matilo Khola), Cobalt(Bauli Gadh, Bajhang),  Nickel (Baman Gaun dadeldhura), gold (Mahakali River, Baitadi , Seti River, Bajhang), Chromium(Bauli Gadh, Bajhang), Cobalt (Bauli Gadh, Bajhang), Lithium( Doti, Bajhang), Nickel (Baman Gaun Dadeldhura), Tin(Meddi, Dadeldhura), Antimony( Bauli Gadh Bajhang), Zinc( Mataio Khola Baitadi), Uranium ( Gorang, Dilasaini Baitadi and Bithadchaur, Bajhang) 

Non-metallic Minerals:

Dolomite (Diyari Gad, Baitadi and Osil Gad Darchula), Magnesite (Bhakari Khola Baitadi), Pyrite (Khatiyaro Khola, Bajhang), Phosphorite (Baitadi and Bajhang), Mica (Bhasuban, Achham Bajhang and Doti), Granites (Dadeldhura), Pegmatite (Budakot, Achham), Aquamarine ( Doti and Bajhang ), Kyanite (Achham)

 

Why Invest in Sudurpaschim’s Industries, Mines and Minerals?

Abundant Raw Materials

The province is rich in natural resources, including copper, lead, dolomite, talc, high-grade limestone, and construction-grade stone and sand, offering strong raw material supply for mining and processing industries.

Strategic Border Access

·       Proximity to the Indian border, particularly near border points like Gaddachauki and Trinagar, supports easy cross-border trade and export-import opportunities, lowering logistics costs and enhancing regional market access.

Low Labor Cost & High Availability

·       With a large population of youth and high outmigration for employment, the province offers a low-cost and readily available labor force eager for local employment opportunities.

Industrial-Friendly Policies

·       Federal and provincial governments have introduced tax exemptions, customs waivers, and subsidies for industries in underdeveloped regions like Sudurpashchim. Policies favor industrial establishment, mining operations, and private investment in SEZs.

Eco-Industrial Growth Model

·       Focus on sustainable industrial development using clean energy sources (like hydropower and solar), promoting environmentally responsible mining and manufacturing in line with green economy principles..

Opportunities in Focus

Ø  Limestone Mining & Cement Industry – Identified in Mankot, Sinkelek, and Deulad of Baitadi; Shri Bhawar of Bajhang; and Gwani of Darchula. Among these, the Mankot deposit is considered the most suitable for long-term use, with a composition of 49.6% CaO and 2.5% MgO. Additionally, the total estimated quantity of mineable talc powder is 9,957 million cubic meters..

Ø  Value-added Industries: Fertilizer & Chemical Plants, Construction Materials Industries (tiles, bricks, cement blocks), Metal Craftsmanship using traditional skills from Doti and Baitadi.

Ø  The Composite Wood Industry:  Sudurpashchim is projected with an estimated cost of NPR 135.9 million over five years and an estimated income of NPR 225 million during the same period. The benefit-cost ratio is calculated at 1.65, indicating a financially viable and profitable investment.

Ø  Timber treatment plant, located in Ward No. 4 of Godawari Municipality, Kailali District, has an estimated five-year cost of NPR 583 million. It is expected to produce 50,000 cubic feet annually, generating an estimated income of NPR 900 million over five years. The benefit-cost ratio is calculated at 2.03.

Ø  A Wood Seasoning Plant is proposed in Sudurpashchim Province with an estimated cost of NPR 372.2 million over five years. The projected income for the same period is NPR 810 million, resulting in a benefit-cost ratio of 2.17.

Ø  Talc Powder:  reserves are located in Saileshikhar and Lekam of Darchula district. The total estimated talc reserve is 7,104,290 tonnes, with a muck reserve of 3,052,781 tonnes. The daily production capacity is 1,600 tonnes, based on 300 working days per year. At this production rate, the mine life is estimated to be 21 years.

Ø  Granite Processing Plants – Strong potential in Darchula and Baitadi.

Ø  Metal Mining (Lead, Copper, Zinc) – Sustainable mining in Bajhang and Doti.

Ø  Agro-Forest Integration – Pine resin, medicinal herbs, and timber-based units.

Ø  Export-Oriented Mineral Processing – Direct link to Indian and global markets.

Government Supports

Federal Incentives Applicable in Sudurpashchim

1.     Income Tax Exemptions:

Ø  Industries engaged in mineral exploration and extraction (excluding limestone) that commence operations by mid-April 2024 (Chaitra 2080 B.S.) are eligible for a 100% income tax exemption for the first 7 years, followed by a 50% exemption for the subsequent 3 years.

Ø  Manufacturing industries established in designated remote, undeveloped, or underdeveloped areas receive income tax exemptions of 90%, 80%, and 70% respectively for up to 10 years

2.     Customs Duty Exemptions:

Ø  Micro, cottage, and small-scale industries importing novel technologies, machinery, tools, and equipment for capacity enhancement are granted customs duty exemptions.

3.     Special Economic Zones (SEZs):

Ø  Industries operating within SEZs, such as the one in Daiji, Kanchanpur (Sudurpashchim), benefit from various facilities, including tax exemptions and infrastructural support.

4.     Revenue Sharing:

Ø  Provinces receive a share of royalties from natural resources, including mining activities. Specifically, 25% of royalties from natural resources are distributed to local governments, with the remaining shared between federal and provincial governments.

5.     Local Resource Management:

Ø  Local governments are authorized to manage the extraction of construction materials like stone, sand, and gravel. They collect royalties based on rates prescribed by provincial finance acts, retaining 60% of the revenue and sharing 40% with the provincial government.

“The future belongs to those who invest in it today. Sudurpashchim awaits your vision, your technology, and your enterprise.”