KOTA KINABALU: Sabah Mineral Management Sdn Bhd (SMM), a wholly owned entity of the Sabah government, has transformed into a revenue-generating agency while reinforcing the state’s control and stewardship over its mineral resources.
To date, SMM has facilitated the issuance of several prospecting licences through what it described as strict and comprehensive due diligence processes.
The progress follows a series of institutional reforms introduced under SMM’s new leadership appointed by Chief Minister Hajiji Noor, aimed at strengthening governance, improving transparency and accountability, enhancing regulatory consistency, and restoring public confidence in Sabah’s mineral sector.
As part of the reforms, SMM introduced new pre-qualification requirements for companies seeking prospecting licences.
Applicants are now required to undergo a rigorous due diligence process, with only companies demonstrating strong financial standing, proven technical expertise, and a clear commitment to Sabah participation allowed to proceed.
Comprehensive background checks are also conducted on companies, including their directors and shareholders, to ensure only credible and reputable partners with integrity are considered.
The reforms have already produced tangible outcomes, with SMM recording its first direct contribution of RM1 million to the Sabah government last year, alongside its highest net profit since the company was established in 2021.
Mineral prospecting, however, involves significant commercial risk and high operational costs borne entirely by applicants.
This includes geological surveys, environmental assessments, technical studies, and compliance obligations, which can amount to millions of ringgit without any guarantee of success.
From the state’s perspective, the prospecting phase represents a low-risk approach to developing Sabah’s mineral sector as all financial and operational risks are undertaken by applicants, while the state gains access to valuable geological and technical data.
SMM Chief Executive Officer Natasha Sim said only about 30 per cent of Sabah’s mineral deposits have been comprehensively mapped by the Department of Minerals and Geoscience Malaysia (JMG).
She said incoming prospecting activities present an important opportunity for Sabah to expand its mineral database and improve understanding of the state’s resource potential.
Natasha said under the current development model overseen by SMM, the state bears no financial cost or liability during the prospecting phase while retaining full ownership of all mineral data generated.
She said this is particularly significant as much of the previous exploration work conducted by JMG did not place ownership of the data under the Sabah government.
“The current licensing process provides a strategic pathway for Sabah to reclaim ownership of its geological data, expand knowledge of its mineral potential, and systematically explore the remaining 70 per cent of land area where little or no information currently exists,” she said during a courtesy call by Sabah Publishing House deputy general manager Dexter Yeh at the SMM office in Plaza Shell.
She added that while the state does not bear costs during prospecting activities, Sabah becomes directly involved once mining activities commence.
“If and when a mining lease is approved, the state participates through royalties, fees, land-use payments and, in certain cases, equity participation.
“This ensures that the commercial benefits from resource extraction are channelled back to the people of Sabah, but only after all necessary safeguards, diligence processes and approvals have been completed,” she said.
