Investment Opportunities in Mining Sector in Myanmar
- 1. The Republic of the Union of Myanmar Ministry of MinesInvestment Opportunities in Mining Sector Presented by – U Win Htein Director General Department of Mines6/15/2012 Ministry of Mines 1
- 2. 1. Introduction ( i ) Organization Chart of the Ministry ( ii ) Legal Framework2. Mineral Occurrence in Myanmar3. Investment Information ( i ) Procedure for the Foreign Investment ( ii ) Tax Regime in Mineral Sector ( iii ) Royalty ( iv ) Categories of Mining Permits ( v ) Production Sharing Contract ( P.S.C ) System ( vi ) FDI List4. Conclusion
- 3. Introduction Ministry of Mines is the governmentauthority responsible for implementation ofthe policy, legislation and enforcement ofLaw, Rules and Regulations in the miningsector.6/15/2012 3
- 4. Organisation Chart of the Ministry Union Minister No.(1) No.(2) No.(3) Myanmar Myanmar Myanmar Department Department Mining Mining Mining Gems Salt Pearl of ofEnterprise Enterprise Enterprise Enterprise and Enterprise Geological Mines Marine Survey Chemical & Enterprise Mineral Exploration 6/15/2012 4
- 5. Myanmar is endowed with mineral resources such as copper,gold, lead, zinc, silver, tin and nickel and so on.Myanmar has a lot of potential for mining sector if we cancombine with our rich mineral deposits and newtechnologies.So, I would like to invite the investors in Mining Sectors asnot only FDI( Foreign Direct Investment ) but alsopartnership with local companies in Myanmar.6/15/2012 5
- 6. Legal FrameworkNow a days , MIC ( Myanmar Investment Commission) is trying topromulgate the new Myanmar Investment Law.The Union of Myanmar Mines Law was promulgated in September1994.Rules relating to the law followed in December 1996.At Present, Ministry of Mines is trying to amend the Myanmar MinesLaw with the advice of experts and publics.( i ) To facilitate the environmental conservation and Green Mining .(ii) To encourage for investments more easily and trustyfully.According to the Myanmar Mines law, all natural mineral depositsfound either on or under the soil of any land in the continental shelf aredeemed to be owned by the State.6/15/2012 6
- 7. 6/15/2012 7
- 8. GEOLOGICAL MAP OF MYANMAR ( 2008 ) • Compilation and Digital Geological map of Myanmar based on the 1:1M scale (1977) was completed in 2008 and printed in 1: 1 million scale. • It was registered and copy right at the Myanmar registration office in 2008.6/15/2012 8
- 9. 92° 94° LO 96° 98° 100° 102° H IT TH RU DI A NJ I ST N AL 28° IN NT U 28° O MINERAL BELTS OF MYANMAR T FR HR ST US ST RU YAN RU TH T A LA TH T HI M A US A G T HR LS N IL NG H SA K IR DI 26° MI 26° G ON IL L IFT SH L UP A G NA CHINA M ani pur K GO EAU 24° 24° MO INDEX T PLA 22° Man dalay 22° N Tin- Tungsten Belts MT . V I C TOR IA M t. SH A D OME Popa Antimony Belts Lead – Zinc – S ilver- Copper Belts THR 20° 20° UST Gold- Copper- Iron Belts je ctiv RIDG E Nickel- Chromite- Copper- Gold- Platinum Belts TH AIL AND e)18° 18° T Iron – Manganese Belt EAS ( pro The Precious S tone Belts ETY Yan gon M awlamyin g NIN Oil- Gas and Coal Belts16° 16° ADAMAN S EA 2 00 km14° 14°12° 12°10° 92° 6/15/2012 94° 96° 98° 100° 10° 102° 9
- 10. 6/15/2012 10
- 11. Ferrous Metals in Myanmar6/15/2012 11
- 12. Non Ferrous Metals in Myanmar6/15/2012 12
- 13. Coal & Industrial Metals in Myanmar6/15/2012 13
- 14. 6/15/2012 14
- 15. Major Minerals Produced by the CountryMajor minerals produced and exported are - Cathode Copper, Refined Lead, Refined Silver, Zinc Concentrate, Refined Tin, Tin Concentrates, Tin-wolfram Mixed Concentrates and Coal6/15/2012 15
- 16. Major minerals produced for domestic consumptions are- Gold Iron and Steel Limestone Industrial Minerals and Barites Powder6/15/2012 16
- 17. Gemstones such as Rubies, Sapphire, colored gemstone andJade are also exported.Myanmar have held emporiums for Jade, Gems and Pearlssince 1964 with the pricing based on Foreign Currencies atleast twice a year. ( sell through tender or competitivebidding )6/15/2012 17
- 18. 1. In accord with the policy of the Ministry of Mines, our ministry is not making own investment, but to encourage foreign and local investors to invest in the mining sector.2. The investor can invest as a foreign direct investment (FDI) or joint investment with local company.3. For investors who would like to do exploration to confirm the reserve of a deposit or to start with the grassroots exploration operations in a virgin land , they may apply accordingly clearly stating their intentions. 6/15/2012 18
- 19. 4. Funds required to conduct the prospecting, exploration and feasibility study are borne by the investor 100% at his own risk.5. Ministry of Mines not allowed to export the raw ore.6. Investor should be made value added (or) mineral processing.7. Ministry encourage to establish the processing plants with the latest technologies. 6/15/2012 19
- 20. Procedures for the Foreign Investment in Mining Sector1. Foreign companies have to send letter of courtesy call to the Union Minister through the respective Embassy in Myanmar to Ministry of Foreign Affairs to the Ministry of Mines officially.2. The Union Minister or responsible officials will discuss the investment opportunities in mining sector mainly focus on mineral commodity and targeted area. 6/15/2012 20
- 21. 3. Site visit will be arranged if requested by the investors or company after technical discussion with responsible departments. Recommendation letter from the respective Embassy, letter of undertaking, tentative site visit schedule and passport copy are required to submit to the Ministry of Mines two week ahead.4. After the site visit, if the investor decided to invest in Myanmar, a proposal should submit to the Ministry of Mines and copy to relevant departments.5. Minerals prospecting, exploration and feasibility study are concerned to DGSE and other Mining Enterprises are responsible for mining operation and production stages. 6/15/2012 21
- 22. 6. The following documents should be included with the proposal: (a) Company Registration (b) Company Profile and other relevant facts about the company (c) Recommendation and endorsement of the respective Embassy in Myanmar (d) Financial Bank Statement (e) List of the Board of Directors (f) Initial work programme (g) Map of the proposed area with coordinates. 6/15/2012 22
- 23. 7. After getting the approval of the Ministry of Mines and the completion of all the require recommendation documents, the proposal and the Agreement Draft will send to the Myanmar Investment Commission ( MIC ) for Investment permit. 6/15/2012 23
- 24. Tax Regime in Mineral Sector6/15/2012 24
- 25. Dead Rent for one Square Km in Kyats Type Prospecting Exploration PeriodSr. of period Minerals 1st Yr 2nd Yr 1st Yr 2nd Yr 3rd Yr 4th Yr 5th Yr Industrial 1 Mineral (or) 50,000 100,000 100,000 200,000 400,000 600,000 800,000 Stone Metallic 2 100,000 200,000 200,000 400,000 800,000 1,200,000 1,600,000 Mineral Precious 3 Metallic 200,000 400,000 400,000 800,000 1,60,000 2,400,000 3,200,000 MineralRemark ;1. Extension Period subject to the approval of the Ministry or the Department 2. Exchange rate subject to daily exchange rate. 6/15/2012 25
- 26. Dead Rent for one Square Km in Kyats Feasibility Study Production Developing Period Type period Period Sr. of Minerals 1st Yr 2nd Yr 1st Yr 2nd Yr 3rd Yr 1-20 Yrs Industrial 1 Mineral (or) 800,000 1,200,000 1,400,000 1,600,000 2,000,000 2,000,000 Stone Metallic 2 1,600,000 1,600,000 1,800,000 2,100,000 2,400,000 3,000,000 Mineral Precious 3 Metallic 3,200,000 3,200,000 3,600,000 4,200,000 4,800,000 6,000,000 MineralRemark ;1. Extension Period subject to the approval of the Ministry or the Department 2. Exchange rate subject to daily exchange rate. 6/15/2012 26
- 27. RoyaltyAccording to Myanmar Mines Law For Metallic Minerals - 3 to 4 % For Precious Metallic Minerals - 4 to 5 % For Industrial Minerals - 1 to 3% For Ruby, Sapphire, Jade and Diamond - 20% For other Gems - 10 % Royalty is levied on value of mineral sold. It is a sale based royalty and not a production based royalty. 6/15/2012 27
- 28. Categories of Mining Permits1. Prospecting Permits - 1 yr2. Exploration Permits - 1 yr3. Feasibility Study - 1 yr4. Subsistence Mining Permits - 1 yr5. Small Scale Mining Permits - 5 yrs6. Large Scale Mining Permits - 25 yrs6/15/2012 28
- 29. Foreign Direct Investments(FDI) Enterprise Type ofSr. or Company Current status Location Mineral Dept:1. D.G.S.E Nobel Gold Gold and Exploration Bhamauk, Limited associated Sagaing Region (Russia ) minerals2. ME(1) (i) Conerstone Zinc Ore Production Shan State, Resources Minepon (Myanmar)Ltd Township (Australia) (ii) North Mining Ferronickle Feasibility Study Chin State, Investment Alloy Teetain Township, Co.,Ltd Hmewtaung Track (China) (iii) Asia Pacific Lead, Zinc , Feasibility Study Kantbalu - Wuntho Mining Ltd Copper, (Eastern Area) 6/15/2012 (China) Gold 29 Sagaing Region
- 30. Sr. Enterprise Company Type of Current Location or Mineral status Dept:5. ME(2) Myanmar 72% Tin Production Taninthayi Foreign Direct Investments(FDI) Ponepipet Co.,Ltd (Thai Land) Concentrate Region, Dawe Township, Heinda Mine6. ME(3) (i) Myanmar Ferro Nickel Developing Thabeikkyin CNMC Nickel Township, Co.,Ltd Mandalay ( China) Region Hteechaik Township, Sagaing Region (ii) Simco Song Marble Developing Nayputaung, Da Joint Stock Taungkoke Company Township, ( Viet Nam) Rakhine State 6/15/2012 30
- 31. 1. At present, Myanmar practice the production sharing contract ( P.S.C ) system.2. Our own Mines are already transferred to Private Companies.3. It is the policy of the Ministry of Mines not to make investment on its own, but to encourage foreign and local investors to invest with the advanced technologies.4. Well known deposits are already occupied by local Companies . So, Foreign Investor should be started from Grassroots Exploration.5. You are warmly welcome to invest in Mining Sector. 6/15/2012 31
- 32. Thank you very much for your kind attention. Ministry of Mines, Myanmar6/15/2012 32
- 1. Myanmar’s Mining Industry www.csaglobal.com 1 Dr. Neal Reynolds Director Exploration & Evaluation CSA Global 18/11/2014 Realities and Visions for the Future
- 2. Introduction Assessment of realities and future challenges for the Myanmar mining industry based on: • More than 14 years experience in Myanmar; • More than 20 years experience in mainland SE Asia; • Breadth of experience from project generation through exploration to m
- ining CSA Global • International mining industry consultancy with offices in Perth, Brisbane, Jakarta, London, Johannesburg, Vancouver, and Moscow; • Provides geological and engineering services across the industry spectrum from regional exploration to feasibility and mining; • Specialist expertise in SE Asia with extensive project experience in all the ASEAN countries.
- 3. Flashback! PDAC Toronto March 2003 • First green shoots of the 2000’s mining boom at the largest global mining industry convention • SE Asia forum – CSA presentation on Myanmar • Followed apparent liberalisation moves in 2002 • False dawn and the investment door slammed shut again in 2004
- 4. Flashback! PDAC Toronto March 2003 WHAT IS DIFFERENT THIS TIME? DO RECENT CHANGES BRING A REAL OPPORTUNITY FOR DEVELOPMENT OF A MODERN MINING INDUSTRY IN MYANMAR, OR ANOTHER FALSE DAWN?
- 5. Myanmar Mining Industry - Historical • The Golden Land – production of gold, silver, copper, lead, etc. from ancient times • Rubies and jade – Mogok and Hpakant • Important trade routes between India and China
- 6. British Colonial Period c. 1824—1948 Lead, Zinc and Silver • Bawdwin Mine and Nam Tu smelter – 1918-38; major producer of Pb, Zn, and Ag • Bawsaing district Pb-Ag and barite Tin and Tungsten (SE Asia Tin Belt) • Tenasserim – Heinda, Hermingyi, etc.; extensive (palaeo) alluvial production, limited hard-rock mining • Mawchi W-Sn narrow-vein mine Gold • Small scale, alluvial and hard rock • Kyaukpazat district Oil – Burmah Oil Company Mawchi Tungsten Mine, 2012 Bawdwin Mine
- 7. Independence & Nationalisation 1948-1988 • Post-war and post- independence ongoing decline in mine production from colonial levels • 1963 nationalisation and socialist period; Mining Enterprises established • 1970’s Colombo plan/UN-aided mapping and exploration • Monywa – Yugoslavia-Myanmar RTB Bor-ME1 joint venture began operations in 1985 • Kyaukpahto Au deposit discovered c. 1980 and developed with Yugoslav assistance from 1982 to 1993 • Both operations were failures From Myanmar government website, 2003
- 8. Exploration “Mini-boom” 1994-1997 • New Investment law (1988) and Mining Law (1994). • Mid-90’s tender-block rounds. • Industry enthusiasm amidst the global boom – exploration and mining interest and investment by majors (Newmont), mid-tiers (Ivanhoe) but mostly by juniors. • Monywa – Ivanhoe re-opened the mine in 1998 under a 50:50 JV with ME1 as modern heap-leach SX-EW operation producing 25,000 tpa cathode copper upgraded to 40,000 tpa in 2004 • Kyaukpahto – short-lived investment by Newmont. • First modern exploration in Myanmar, but limited in scope and extent. • Terminated by 1997-1998 global exploration industry collapse and prolonged subsequent downturn. • Cyanide ban introduced Kysintaung open-pit and leach pads, Monywa SX-EW copper cathode production, Monywa
- 9. Resources “Super-cycle” 2004—2011 • Momentum for political liberalisation in Myanmar reversed in 2004 just as the “super-cycle” gathered pace • Sanctions and changes in regulations militated against foreign investment – e.g. Commercial Tax and Production Sharing Contracts • Investment effectively ceased; Ivanhoe pulled out of Monywa in 2007 and lost the Modi Taung Gold project • Mining Enterprise mines and projects privatised – local companies (e.g. Asia World, Eternal Mining) with or without Asian or Russian JV partners • Chinese investment focused on known deposits, e.g. Tagaung Taung Ni laterite, Monywa, Bawdwin, Nam Tu slags; also Russian, Thai etc. investors Kyaukpahto Mine, 2004 COMEX Cu 1993-2012
- 10. Current Realities • Myanmar missed the mining boom(s) and remains almost entirely unexplored • Requirement for Production Sharing Contracts, high rental rates, short licence terms etc. make risk investment in exploration commercially untenable • Underdeveloped mining industry relative to potential Production remains at a very low level in terms of quantity and quality Monywa (now Chinese-controlled) is still the only significant modern mining operation in the country; planned Letpadaung development and expansion to 200,000 tpa Cu has not yet occurred Tagaung Taung Ni project also Chinese owned • Political change and broadly favourable 2012 Foreign Investment Law – renewed mining investment interest but no MIC licences issued for exploration/mining • 1994 Mining Law still in place and can provide a framework for acceptable “Contract of Work” based exploration title but more changes are needed to attract serious explorers Gegalaw artisanal gold mining and cyanide leaching, 2009
- 11. Future – Realising the Potential? • Irreversible political change has occurred • New discoveries and development requires risk investment • Minimal past exploration means there is no pipeline of development projects; need to incentivise high-risk investment in high-risk brownfields and greenfields exploration • Attracting foreign risk investment requires changes to the Mining Law and regulations PSC’s, signature bonus, high rental rates etc. v. terms that encourage exploration dollars in the ground and new discovery Promote high-risk investment and attract quality technically-focused explorers Improve Mines Department capacity to transparently administer licensing system Gegalaw artisanal gold mine, 2009 • Minimal past exploration enhances opportunities for shallow discovery For what commodities? Where? What is the real mineral potential of Myanmar and, with investment, can it underpin a modern mining industry?
- 12. Mineral Potential and Tectonic Setting • SE Asia comprises a collage of tectonic plates separated from Gondwana and accreted to Asia from the Cambrian to the Cenozoic. • Understanding mineral potential is directly related to: Understanding this tectonic evolution and related metallogeny Understanding deposit preservation potential related to uplift and erosion, especially for epithermal Au and porphyry Cu systems • Provides the basis for target belt prioritisation • Knowledge from the surrounding region can be used, especially where limited information in Myanmar • Significant metallic deposits of Cu, Au, Zn- Pb-Ag, and Sn-W exist within the country or in metallogenic belts that run into the country Jiama Cu-Mo-Au Chatree Au Yulong Cu-Mo-Au Monywa Cu Davoy Sn-W Bawdwin Pb-Zn-Ag Sopokomil Zn-Pb Kinta Valley Sn-W Sepon Cu, Au Phukham Cu-Au Laocang Zn-Pb-Cu-Ag
- 13. Gold Potential • Permo-Triassic volcanic arc belt, Eastern Shan State Epithermal potential; Mae Chan etc. in Thailand Gold-rich VHMS; Dapingzhang (2g/t Au), Nam Rin (Ba-Au, Thailand), Tasek Chini (Malaysia) • Triassic Indosinian orogeny in the “Slate Belt” Orogenic gold, e.g. Modi Taung, Shwegyin alluvials, Russell Island etc.; high grade, low tonnage • Cretaceous collision and deformation in the Central Myanmar Arc Orogenic gold, Kyaukpazat, Legyin etc. – extensive narrow-vein gold systems; high grade, low tonnage Modi Taung Chatree Kyaukpazat Mae Chan Dapingzhang Nam Rin Russell Island
- 14. Gold Potential • Palaeogene volcanic centres along the Central Myanmar Arc Epithermal gold Kachin segment; Setgadone etc. • Neogene extensional magmatism along the Sagaing Fault zone Epithermal and sediment-hosted gold e.g. Kyaukpahto (>6Mt at 3g/t), Gegalaw • Neogene transcurrent faulting and magmatism in the Mogok metamorphic belt (Shan scarps) Mesothermal gold, IRG/skarn? – Kwinthonze, Tayetkhone, Kyaikto Epithermal potential – Tengchong- type young volcanic centres? Kyaukpahto Tengchong Setgadone Monywa Kyaikto Kwinthonze Thayetkhone
- 15. Copper Potential • Cambro-Ordovician volcanic centres Bawdwin polymetallic VHMS • Permo-Triassic arc and back-arc volcanism in the Sukothai and Changning-Menglian belts – VHMS; in China Dapingzhang (c. 63 Mt at 0.8% Cu) Yagra (c. 1 Mt cont. Cu) • Triassic fore-arc – Lemyethna Cu-Au Bawdwin Dapingzhang Phu Kham Phu Thep Laocang Dongchuan Dahongshan Yagra Xuejiping Lemyethna Nam Rin
- 16. Copper Potential • Palaeogene sub-aerial volcanic centres along the Central Myanmar Arc Monywa high-sulphidation epithermal copper deposit (early Miocene); c. 1.88 Bt at 0.37% Cu, Letpadaung, Sabetaung, and Kysintaung deposits Shangalon Cu-Au porphyry (Oligocene) • Kachin Arc segment; correlated with Gangdese arc in Tibet Jiama (Tibet; 1.17 Bt at 0.41% Cu, 0.04% Mo, 0.1g/t Au) • Mogok Belt Neogene transcurrent faulting and magmatism Minor skarn copper-polymetallic mineralisation Shangalon Kachin Arc Monywa Jiama
- 17. Zn-Pb-Ag Potential • Cambro-Ordovician rhyolitic volcanic centres on the western margins of the Shan-Thai block - VHMS Bawdwin (“silver pit”) polymetallic VHMS(?); 1938 reserve 10.8 Mt at 22.8% Pb, 13.9% Zn, 1.05% Cu and 670 g/t Ag – biggest global producer of Pb and Ag before WW2 Large lower-grade ‘halo’ resource reported by Mandalay Mining in 1997 • Potential outside the Bawdwin volcanic centre; unrecognised volcanic centres? • Vein-hosted deposits in Precambrian and Cambrian clastics Yadanatheingyi etc. Bawdwin Yadanatheingyi
- 18. Zn-Pb-Ag Potential • Early Ordovician carbonate-hosted Pb-Zn-Ag-Ba deposits over 1000 km of strike from Kanchanaburi to western Yunnan (Baoshan) • Broadly “Irish-type” in a back-arc setting? • Bawsaing district – extensive old barite, lead and zinc mines • Shan State; Lufang etc.? • Thailand - Kanchanaburi; Song Toh, Bo Yai global resources >8 Mt at c. 7% Pb, 3% Zn and 100g/t Ag • Thailand - Li; Phu Mai Tong barite mine, Mae Chong Zn-Pb-Ag-Ba deposit • Yunnan; Shizishan, Menxing, Dongshan etc. Bawdwin Long Keng Bawsaing Kanchanaburi Li Mengxing Lufang Yadanatheingyi
- 19. Zn-Pb-Ag Potential • Permo-Triassic back-arc volcanism in eastern Shan State; polymetallic VHMS in Sukothai and Changning- Menglian belts Laocang, Yunnan, c. 20 Mt at 4.3% Zn, 6.6% Pb, 151 g/t Ag and 0.11% Cu) • Indosinian Triassic MVT? Long Keng oxide Zn deposit c. 0.2 Mt at 35% Zn • Cretaceous MVT in Thailand Padaeng (Mae Sod) oxide Zn deposit c. 1.7 Mt contained Zn Dapingzhang Long Keng Padaeng Laocang Daliangzi Huize Yagra Jinding Mawki Lufang Nam Rin
- 20. Sn-W Potential • SE Asian Tin Belt (c. 2800 km) total estimated production c. 9.6 Mt of tin, or 54% of the world's tin production • Most Sn-W in Myanmar is from Late Cretaceous Western Province granite- related mineralisation in Tanintharyi • Most Sn production from Mio-Pliocene alluvial and eluvial palaeo-placers, e.g. Heinda and offshore dredging • Lesser production from modern placers • Relatively minor primary production from Sn-W greisen and vein deposits, e.g. Hermingyi, Kanbauk • Tungsten-rich deposits on the eastern side of the belt; e.g. Mawchi, Mae Lama (Thailand) • Unrealised primary potential – greisen and skarn? Pyinmana Tengchong Mawchi Hermingyi Ban Phontiou Mae Lama Doi Mok Geijiu Khao Soon Dulong Phuket Heinda Myeik Nui Phao
- 21. Ni, Cr, PGM Potential • Extensive ophiolite belts related to Indian collision event; mostly steeply dipping and dismembered ultramafics Tagaung Taung lateritic nickel deposit; c. 40 Mt at 2% Ni Mwetaung lateritic nickel deposit; c. 36 Mt at 1.5% Ni Relatively small and moderate grade deposits, mainly saprolite; high capital and power costs • Widespread small chromite deposits and occurrences • Alluvial PGM’s recorded at Indawgyi, Hukawng valley • Jadeite at Hpakant has provided one of Myanmar’s most valuable mineral exports Mwetaung Kachin Ophiolite Belt Indo-Burman Ophiolite Belt Song Da Rift Ban Phuc Tagaung Taung Hpakant Panxi Rift
- 22. Bulk Commodities Iron-ore • No significant deposits known • Potential for skarn magnetite exists in arc belts and associated with tin skarns • Enigmatic Pang Phet deposit with reported associated Cu and U; basement or Triassic hosted? Manganese • Eastern Shan state; volcanic or skarn- related? Bauxite • No significant reported occurrences Coal • Extensive low-grade sub-bituminous coal in western basin, Kalewa etc. • Small brown-coal deposits in fault basins on Shan plateau, e.g. Tigyit, Namma Tigyit coal deposit Coal in western basin Pang Pet Fe Mn & Fe production In E Shan Secondary Fe and Mn; Primary skarn?
- 23. Operating Framework • Common Law System • All minerals vested in the state; royalties are not fixed (precious metals 4-5%, base metals and ferrous metals 3-4%, negotiable) • 1994 Mining Law set the framework for individual contracts which included: • DGSE technical support at the exploration stage • Principal terms and conditions of production JV with one of the Mining Enterprises – equity participation with cost recovery • Prospecting, exploration and production periods (total up to 10 years) with expenditure commitments and progressive relinquishment • Investment Law sets framework for foreign investment; approval through Myanmar Investment Commission • Production Sharing Contracts, high level of ‘signature bonus’ and ‘dead rent’ and short licence terms a major disincentive to risk investment in exploration • Local support or participation essential in states and ethnic areas • Currently possible to acquire licences through local JV companies; no MIC licences have been issued • New Mining Law – when and what?? • How will foreign JV’s with non-state companies be accommodated?
- 24. Data & Services • Improved UTM topographic map coverage at 1:50,000 from modern aerial photography • Geological mapping limited in extent and quality • Almost no useful exploration data such as geochemical datasets or airborne geophysics • Limited technical professional experience especially in younger generation • Low level in-country exploration services, drilling and geophysics; increased foreign involvement in service companies • Services and equipment can be imported • Local service scope and availability will quickly improve if foreign investment in exploration picks up Geosan LLC Mongolian geophysicists with CMC team, Sagaing Project, 2005 Suntac diamond drill-rig, Legyin, 2009
- 25. Logistics • Poor infrastructure, but reversal of long- term decline has begun, and challenges can be overcome • Unreliable power supply, but substantial energy resources and improving supply • Difficult communications, but improving rapidly especially mobile coverage and internet access • Security restrictions are much reduced, but still an issue in some areas
- 26. Opportunities and Challenges • High geological potential for a number of commodities/deposit types, notably Epithermal and porphyry Cu-Au in arc belts Volcanic- and sediment-hosted Zn-Pb-Ag massive sulphide Sn-W greisen and skarn • Potential, especially for gold and copper, can be misunderstood, e.g. should not be compared directly with Indonesia • Improved geological and metallogenic understanding can be applied to support effective targeting models in ground selection and exploration • Paucity of detailed geology, maps or research, and limited understanding of several significant deposits and districts • Lack of past exploration implies opportunity for rapid discovery of outcropping orebodies using well-targeted basic techniques such as stream- sediment geochemistry and airborne geophysics • No data from past exploration to follow up or guide effective approaches • No regional-scale government geochemical or geophysical data • Artisanal gold operations provide a key targeting criterion in unexplored areas
- 27. Opportunities and Challenges • Improving political and investment environment • Limited understanding of the mining industry and incentivisation of exploration risk in bureaucracy and government • Bureaucracy supportive of mineral exploration investment • Mines Department is understaffed, under-resourced, and lacks experience in managing and regulating an active exploration and mining industry • 1994 Mining Law has provided the framework for exploration and development contracts providing a pathway to development with reasonable terms • Subsequent regulations are very unfavourable for exploration risk investment, e.g. PSC’s, high dead-rent, signature bonus, etc. • No ‘one-stop-shop’ – multiple departmental approvals required, central and regional and local government • New Investment Law favourable for foreign investment • TERMS OF THE NEW MINING LAW REMAIN UNCERTAIN BUT WILL BE CRITICAL IN DETERMINING THE FUTURE FOR MYANMAR’S MINING INDUSTRY • Role of states is a crucial uncertainty linked to substantive political issues • Environmental and community framework also remains poorly defined • EITI application is a positive indication of government intentions • Improved security situation and access in most peripheral regions • Problems and tensions remain in some areas
- 28. Opportunities and Challenges • Profusion of local businesses investing in mineral exploration as potential partners for foreign investors • Limited understanding of the exploration and mining business and a business environment and practices distorted by years of a military-controlled economy • Multiple stake-holders wanting a slice of the pie, especially in the ethnic regions • Unrealistic perceptions of value • Improving infrastructure and communications • Access in large parts of the country is slow and difficult • Unreliable power supply, but substantial energy resources and improving supply • Improved UTM topographic map coverage at 1:50,000 from modern aerial photography and availability of high resolution satellite imagery • Availability of geologists and workforce with a strong work ethic enthusiastic to learn and grasp opportunities; widespread use of English • Limited pool of commercially-focused technical experience, especially in mining • Service companies in country can provide support in geology and exploration, including limited geophysics and drilling • Service industry still at a low level, but ability to grow quickly
- 29. Flasback! PDAC Toronto March 2003 WHAT HAS CHANGED TEN YEARS LATER?
- 30. Flasback! PDAC Toronto March 2003 WHAT HAS CHANGED TEN YEARS LATER?
- 31. Opportunity for Myanmar – Closing Remarks • Myanmar has the geological potential to develop a significant mining industry • HIGH-RISK INVESTMENT IN EXPLORATION IS NEEDED IF MINING IS TO SERIOUSLY CONTRIBUTE TO THE SOCIO-ECONOMIC DEVELOPMENT OF MYANMAR; THIS REQUIRES AN INVESTMENT REGIME THAT REWARDS RISK • An investment regime that encourages risk investment in exploration combined with effective social/environmental regulations will attract serious exploration and mining companies • Serious players may include large, mid-tier and well-managed technically- competent junior companies • Reputable companies will follow industry-standard best practice and understand the need to have a ‘social licence to operate’; this will deliver the best outcome in terms of economic return, social and environmental impact • JVs with local companies and use of local Myanmar service companies will help build a local responsible mining industry • Undiscovered and undeveloped mineral deposits are unrealised assets until they are developed and contribute to the economic and social development of the country • MINES WILL NOT BE DEVELOPED IF ECONOMICALLY UNREALISTIC PROCESSING AND REFINING REQUIREMENTS ARE DEMANDED
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