Sabah’s mineral potential promising but licensing hurdles deter investors, says mining entrepreneur

TAWAU (Feb 10): Sabah’s mineral-rich areas, including gold, copper, iron ore and coal, have significant potential to boost the state’s economy, but investors remain cautious due to lengthy licensing processes and the lack of guaranteed mining permits, said Datuk Lo Fui Ming.

The founder of a mining company in Tawau, said that despite Sabah having over 34 potential mineral-rich areas, few local or Peninsular-based companies dare to invest in the mining sector because of the high risks involved.

“My two companies were among the earliest local firms to explore gold mining at Bukit Mantri and Bukit Tundong, Balung, since 2014,” he said.

“From my nearly 15 years of experience in the gold mining industry, very few Malaysians used to venture into Sabah’s mining sector.

“However, recently, there has been a positive shift as the state government began issuing more exploration licenses to local and Peninsular companies,” he added.

He noted that each mining site could create around 300 to 600 jobs, depending on the size and productivity of the mine, bringing new hope for Sabah’s economy.

However, Lo stressed that mining activities require strict compliance with multiple legal provisions.

“Companies must adhere to the 1960 Mining Ordinance and Sabah Land Ordinance Chapter 68, and go through a lengthy approval process that can take up to seven years before operations can commence,” he said.

He outlined the process, which begins with identifying potential areas and applying for a prospecting license from the Land and Survey Department via Sabah Mineral Management Sdn Bhd (SMM), obtaining clearance from the Sabah Forestry Department, conducting feasibility studies under Joint Ore Reserves Committee (JORC) Code guidelines, and finally submitting for gazettement in the State Legislative Assembly.

Lo added that even after gazettement and signing of mining agreements, companies still need approval for Environmental Impact Assessments (EIA), operational permits, and compliance with the Ore Management Scheme (OMS) before production can begin.

He also voiced investors’ concerns that obtaining an exploration license does not guarantee a mining license, despite the high costs already invested.

“The state government has the right to award mining licenses to others. This situation deters investors, as exploration costs can reach tens of millions of ringgit without any assurance of returns,” he said.

Lo urged the Sabah government to provide clearer and more reliable guidelines on the relationship between exploration and mining licenses to attract more investors.

He also suggested that the Land and Survey Department liaise with the Sabah Forestry Department before issuing prospecting licenses, so companies would not face difficulties entering approved forest reserve areas for exploration.

“If this process is simplified, Sabah’s mining industry could grow faster, bringing significant benefits to the state’s economy and local communities,” he said.