Nepal is rich in water, forests, biodiversity and some minerals, but it has no petroleum production of its own. Lok Sewa asks about hydropower potential, where minerals such as iron, limestone and magnesite are found, Nepal’s biodiversity and how royalties from natural resources are shared. This note covers each of these resources.
1. Water resources
- Nepal has about 6,000 rivers and streams; the three big river systems are the Koshi, Gandaki and Karnali.
- Theoretical hydropower potential is about 83,000 MW, estimated by Dr. Hari Man Shrestha in 1966; about 42,000 MW is considered economically feasible.
- Water is used for hydropower, irrigation, drinking, fishing and tourism (rafting).
- Nepal is often called the second richest country in water resources in the world, though this claim is debated.
2. Minerals of Nepal
| Mineral | Main location / use |
|---|---|
| Iron ore | Phulchoki (Lalitpur) and Thoshe (Ramechhap) |
| Limestone | Used in cement factories such as Hetauda and Udayapur |
| Magnesite | Kharidhunga (Dolakha) |
| Lignite / coal | Small deposits in Dang and other western districts |
| Marble | Godawari (Lalitpur) |
| Slate | Used for roofs in hill districts |
| Natural gas (methane) | Small amounts in the Kathmandu valley |
| Gold | Small amounts of gold dust in some rivers |
Minerals are managed by the Department of Mines and Geology. Nepal imports all its petroleum products, mainly through the Nepal Oil Corporation.
3. Land and soil
- Land is Nepal’s most basic resource; a large share of people depend on farming.
- Main soil types: alluvial soil in the Terai (most fertile, good for rice and wheat), sandy and gravelly soil in the Chure and Bhabar, loamy and red soil in the hills, and thin rocky soil in the mountains.
- The Terai is called the granary of Nepal.
- Problems: soil erosion, landslides, fragmentation of land into small plots and loss of farmland to settlement.
4. Biodiversity
- Nepal covers only about 0.1% of the world’s land area but has a very high share of its plants and animals because of its great range of altitude and climate.
- It has about 9% of the world’s bird species.
- Famous animals: one-horned rhinoceros, Bengal tiger, snow leopard, red panda, Asian elephant and gharial crocodile.
- Protected areas cover over 23% of Nepal’s land.
5. Sharing benefits of natural resources
- The National Natural Resources and Fiscal Commission is a constitutional body that recommends how revenue and royalties are shared.
- Under the Intergovernmental Fiscal Arrangement Act 2074, royalty from natural resources (such as hydropower, forests and mines) is shared: federal 50%, province 25%, local level 25%.
- The Constitution directs the state to use natural resources in an environment-friendly and sustainable way and to give local people priority in benefits.
6. Key facts at a glance
| Resource | Fact |
|---|---|
| Hydropower potential | About 83,000 MW theoretical; around 42,000–45,000 MW economically feasible |
| Largest completed hydropower project | Upper Tamakoshi (456 MW) |
| Main minerals found | Limestone, magnesite, iron, copper, mica, talc, natural gas traces |
| Forest cover | Over 46% of land including other wooded land |
| Protected areas | Over 23% of land, including national parks, reserves and conservation areas |
| Royalty sharing | Federation 50%, province 25%, local level 25% |
7. Challenges in using natural resources
- Lack of investment and modern technology for mining and hydropower.
- Environmental damage from unmanaged sand and stone mining.
- Disputes over benefit sharing between levels of government and local communities.
- Climate change affecting glaciers, rivers and forests.
8. How this topic is asked in the exam
Objective questions ask hydropower potential, the largest projects, minerals found in Nepal and protected-area coverage. Subjective questions ask how natural resources can be used for prosperity. Mention hydropower export, community forestry and fair benefit sharing under the National Natural Resources and Fiscal Commission.
📌 Key points to remember
- Nepal has about 6,000 rivers; main systems: Koshi, Gandaki, Karnali.
- Hydropower potential: about 83,000 MW (Hari Man Shrestha); about 42,000 MW feasible.
- Iron: Phulchoki and Thoshe; magnesite: Kharidhunga (Dolakha); marble: Godawari.
- Limestone feeds cement factories like Hetauda and Udayapur.
- Nepal produces no petroleum; Nepal Oil Corporation imports it.
- Alluvial soil makes the Terai the granary of Nepal.
- Nepal has about 0.1% of world land but about 9% of bird species.
- Royalty sharing: federal 50%, province 25%, local 25%.
Test yourself: Natural Resources and Minerals of Nepal
Practise Water resources, Land and soil and Sharing benefits of natural resources with 50 questions. Each attempt picks 25 at random.