The first Five-Year Plan (1956–1961) marked the beginning of planned economic development in the country. Introduced during a period when Nepal was emerging from political isolation, the plan aimed to establish the foundations for long-term economic growth by investing in infrastructure, agriculture, transport, communications, education, health, and industrial development.
With a total allocation of approximately Rs 576m, the plan emphasized the creation of basic facilities necessary for national development. Although transportation and communication received the largest share of investment, the plan also recognized the strategic importance of developing Nepal’s mineral resources. A separate policy on mines and minerals was included, reflecting the government’s belief that the country’s geological resources could contribute significantly to industrialization, employment generation, and economic diversification.
The First Five-Year Plan viewed mineral resources as essential raw materials for the production of tools, machinery, construction materials, and other producer and consumer goods. It argued that the availability of minerals such as iron, copper, limestone, coal, mica, lead, zinc, nickel, and cobalt could support the growth of domestic industries, reduce dependence on imported materials, and promote economic self-sufficiency. Mineral development was therefore seen not merely as an extractive activity but as a key component of broader industrial and economic transformation.
The plan acknowledged that mining was not a new activity in Nepal. Historical evidence indicated that copper, iron, and several other minerals had been extracted in earlier periods. However, many of these traditional mining enterprises had gradually declined or disappeared. According to the plan, this decline resulted primarily from the country’s difficult transportation system, which made mining commercially unviable, and from poor treatment of workers, which discouraged labor participation. Despite this decline, the plan noted that Nepali workers had demonstrated their capability and interest by successfully working in mining operations in neighboring countries. This suggested that, with improved conditions and proper management, Nepal could rebuild a productive mining sector.
A major challenge identified in the plan was the lack of reliable geological knowledge about Nepal’s mineral resources. While many people believed that the Himalayan region contained abundant mineral wealth, the plan cautioned against making assumptions without scientific evidence. It explained that the relatively recent geological formation of the Himalayas may have disrupted, buried, or altered earlier mineral deposits. Consequently, the government emphasized that systematic geological investigation was necessary before any conclusions could be reached regarding the quantity, quality, and commercial value of mineral resources.
The plan described mineral exploration as a gradual scientific process involving several stages. The first stage consisted of geological reconnaissance and mapping, which aimed to understand the rock formations and geological structures of different regions. Such surveys would help identify areas where economically valuable minerals might exist. The second stage involved detailed exploration through geological investigations, rock sampling, chemical analysis, and test drilling. Once mineral deposits were discovered, additional drilling and laboratory testing would be conducted to determine their size, grade, purity, and commercial potential. Only after these investigations could mining operations be planned with confidence.
By the time the First Five-Year Plan was prepared, Nepal had already initiated the early stages of geological exploration with technical assistance from international organizations. Experts from the United Nations Technical Assistance Administration, the Geological Survey of India, and the United States Operations Mission had begun geological reconnaissance surveys and mapping across different parts of the country. Field geologists were investigating potentially mineralized zones, while basic laboratory facilities for chemical and metallurgical analysis had been established. Nevertheless, the plan recognized that these activities represented only the beginning of a much larger and longer-term effort. Continued exploration over many years would be necessary before Nepal could fully understand its mineral resource potential.
The plan identified several mineral deposits that appeared promising based on preliminary investigations. Among the most important was the limestone deposit at Bhainse, which was considered sufficiently large and of suitable quality for cement production. Since cement was a critical material for infrastructure development, this discovery had considerable economic significance. Similarly, an iron ore deposit at Phulchowki-danda showed promising potential, and deep diamond drilling was proposed to determine its actual extent and quality. Additional investigations were planned for the copper deposits at Nangre and the nickel deposits at Bhorle.
Other mineral occurrences also attracted attention. A mica deposit north of Kathmandu appeared suitable for commercial mining, while lignite deposits near Kathmandu showed potential as fuel for brick kilns and other industrial uses that did not require high-grade coal. However, the plan noted that commercially significant coal deposits had not yet been confirmed in accessible areas. Given coal’s importance for metallurgy, foundry work, and industrial energy, the exploration of suspected coal deposits was assigned high priority. Other minerals known to occur in Nepal, including cobalt, lead, and zinc, required further investigation before their economic value could be assessed.
The First Five-Year Plan emphasized that discovering mineral deposits alone would not guarantee successful mining development. Several practical and economic challenges had to be addressed before commercial mining could begin. One of the most important considerations was transportation. Since many mineral deposits were located in remote mountainous regions, roads and transport facilities were essential for moving equipment, labor, and extracted minerals. The availability of electricity, coal, water, and other supporting infrastructure also needed careful evaluation. In addition, mining operations required technically qualified engineers, geologists, metallurgists, and skilled workers, all of whom were in short supply in Nepal during the 1950s.
Investment represented another major concern. Mining projects typically require substantial financial resources for exploration, drilling, equipment, processing plants, and transportation infrastructure before generating any returns. The plan therefore recognized the need to mobilize both public and private investment. It proposed encouraging private capital to participate in commercially viable mining ventures, supported where necessary through government loan facilities. In certain strategic projects, direct government ownership or public corporations with partial private participation could also be established.
Institutional development formed an important component of the mining policy. The Bureau of Mines was assigned responsibility for coordinating geological surveys, exploration activities, mineral analysis, metallurgy, and ore dressing. It was also expected to coordinate closely with other government departments responsible for transport, communications, industry, agriculture, education, power, village development, and national planning. Such coordination was intended to prevent duplication of effort, improve the sharing of maps, records, equipment, and technical expertise, and ensure more efficient planning of mineral development projects.
The plan further emphasized human resource development. Nepal lacked trained mining professionals, making technical education a priority. The government proposed sending mining engineers and other highly qualified personnel abroad for specialized training while simultaneously developing lower-level technical training programs within Nepal. Building domestic expertise was viewed as essential for reducing dependence on foreign experts and ensuring the sustainable development of the mining sector.
Recognizing the need for an appropriate legal framework, the First Five-Year Plan also proposed the development of a mining code and related regulatory legislation. Expert advice from both government specialists and international aid organizations would assist in formulating mining policies, establishing legal standards, and regulating exploration and mining operations. The plan additionally proposed creating a special board to provide loans to prospectors and mining enterprises operating under the technical supervision of the Bureau of Mines, thereby encouraging systematic exploration while maintaining professional oversight.
Overall, the mines and minerals policy of the First Five-Year Plan was cautious, scientific, and institutionally oriented. Rather than rushing into commercial mining based on speculation, the government prioritized geological surveys, scientific exploration, technical capacity building, institutional development, legal reforms, and infrastructure improvement. The plan recognized that mineral development would be a long-term process requiring sustained investment, careful planning, and international technical cooperation.
Although large-scale mining did not emerge during the First Five-Year Plan, the policies introduced during 1956–1961 laid the institutional and scientific foundations for Nepal’s future geological exploration and mineral resource development. In this sense, the First Five-Year Plan established the country’s earliest comprehensive framework for transforming its mineral wealth into a productive asset for national economic development.
