MYANMAR INVESTMENT SEMINAR FOR ENERGY, POWER & MINERAL RESOURCES SECTOR

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MYANMAR INVESTMENT SEMINAR FOR ENERGY, POWER & MINERAL

RESOURCES SECTOR

Mining Law Update, Current Situations and Outlook of Mining Sector in

Myanmar.

1

Kyaw Thet ,

Director for Mineral Development Division

Department of Mines, Ministry of Mines

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OUTLINE OF PRESENTATION



Brief Introduction to Mining Sector of Myanmar



Policies and Legislations



Investment Information of Mining Sector



PSC Ratio (Government Vs Investor)

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INTRODUCTION TO MYANMAR MINING SECTOR

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ORGANIZATION CHART OF MINISTRY OF MINES

Union Minister

Deputy Minister

Permanent Secretary

DOM

Mineral Policy Formulation,

Regulator, Royalty collection

DGSE

Geological, Geotechnical

Analytical Labortary

ME(1)

Lead, Zinc, Silver Copper,

Iron , Nickel Coal , Lime Stone,

Industrial Minerals

ME(2)

Gold, Tin , Tungsten, Rare earth,

Titanium, Platinum,

Gems Enterprise

Gems, Jade, Jewellery

Pearl Enterprise

Pearl

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CURRENT MINERAL POLICY



Any kind of raw ores are not allowed to export.



Private entrepreneurs are permitted to sell their mineral products freely in the local market and may also export them after mineral processing.



Encouraging to set up mineral processing and refining plants in Myanmar in partnership with local and foreign investors.



Inviting to produce coal and build coal power plants but only for domestic use, not allowed to export.



Gemstone Mining are not allowed to Foreign investors but can invest in Jewellery Making Industry or value added processing.



Foreign investors can buy Jade and Gems in Emporium and also can be

exported.

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 To offer a balanced approach to development of mineral sector and the environmental conservation.

 To minimize the environmental damages and improved livelihood of the local who live near by mining area.

 To minimize the mineral losses and be

effective production by advanced

technologies for mineral resources of

state.

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Sr. Company Registered

Country Type of Mineral Area ( Acre) Type of Permit 1. Conerstone Resource

(Myanmar) Ltd Australia Zinc Ore 1976.8 Large Scale Mining Permit

2. Myanmar Ponepipet

Co.,Ltd Thailand Tin Concentrate 2110 Large Scale Mining Permit

3. Myanmar CNMC Nickel

Co.,Ltd China Ferronickel 5082.37 Large Scale Mining Permit

4. Simco Song Da Joint Stock

Co., Vietnam Marble 585.72 Large Scale Mining Permit

5. Asia Pacific Mining Ltd. China Lead, Zinc , Copper, Gold 160419 Exploration Permit 6. Myanmar Yangtze Copper

Co., Ltd. China Copper 5841.44 Large Scale Mining Permit

7. Myanmar Wanbao Copper

Co., Ltd. China Copper 7946.36 Large Scale Mining Permit

8. Daewoo Precious

Resources Co.Ltd Korea Copper, Gold 23968.70 Exploration Permit

9. GPS Joint Venture Co.,Ltd China Lead, Zinc 495 Large Scale Mining Permit

10. Sichuan Chuandi

( Myanmar) Mining Co.Ltd China Copper and associated

Mineral 6500.3 Exploration and F . S

Permits Issued to Foreign Investors

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Sr. Company Registered Country

Type of Mineral Area ( Acre) Type of Permit

11. Royal Light Ron Ann Co.,

Ltd China Iron 500 Exploration and F . S

12. Geo Pro Mining Sea Ltd Russia Antimony and Associated

Minerals 2313 Prospecting, Exploration & F.S

13. Asia Mining Ltd Australia Heavy Sand 13195.14 Feasibility Study

14. Myanmar VES Joint Venture

Co., Thailand Jewellery Making 0.11 Production

15. Myanmar Tasaki Co., Japan Pearl 28159.52 Pearl Firm

16. Myanmar Atlantic Co., Australia Pearl 10501.75 Pearl Firm

17. Myanmar Adman pearl Thailand Pearl 19199.67 Pearl Firm

18. Belpearl S’pore Pearl 7680 Pearl Firm

Production =8,

Exploration = 6,

Pearl = 4

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Permitted licenses on end of Oct, 2015

Sr.No. State&

Region Large

Scale Small

Scale Exploration Subsistence Small Scale Processing Feasibility

Study Total

1 Kachin 4 72 86 - - - 162

2 Kayar 1 19 16 - - - 36

3 Kayin 7 39 16 17 - - 79

4 Chin - - 7 - - - 7

5 Sagaing 25 245 43 2 2 6 323

6 Tanintharyi 18 38 43 - - 3 102

7 Nay Pyi Taw 3 - - - - - 3

8 Bago - 3 1 - - - 4

9 Magway 3 37 28 - - 1 69

10 Mandalay 47 268 64 104 - 3 486

11 Mon 6 21 3 8 - 4 42

12 RaKhine 1 - - - - - 1

13 Shan(South) 16 103 120 2 - 2 243

14 Shan (North) 20 56 50 26 - 4 156

15 Shan (East) 1 83 75 - - 3 162

16 Ayeyarwaddy 3 4 - - - - 7

Total 155 988 552 159 2 26 1882

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POLICIES AND LEGISLATION

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State owned Economic Enterprise Law

Foreign Investment Law (2012)

Protection of Wild Life and Wild Plants and Conservation

of Natural Areas Law (1994) Protection of Wild Life and Wild Plants and Conservation

of Natural Areas Law (1994) Myanmar Insurance

Law (1993)

Myanmar Insurance Law (1993)

Environmental Conservation Law (2012)

Cultural Heritage Law (1998) Cultural Heritage Law (1998) Myanmar Mining Law (1994)

Myanmar Mining Law (1994)

Myanmar Gems Law (1995) Myanmar Gems Law (1995)

Myanmar Pearl Law (1998) Myanmar Pearl Law (1998)

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Myanmar Mine Safety Law (Upcoming)

Myanmar Explosive Law (Upcoming)

Mining Laws and Relating Laws

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Environmental Conservation for Four Main Rivers

Notification No. 26/2012 (Dated on 28.3.2012)

 Restriction had been done for Prospecting, Exploration and Production for Metal and Gemstone Mining in the stream of Ayeyarwady, Than Lwin, Chin Dwin and Sit Taung Rivers within 100 meter from bank of rivers.

Issued Public Notice

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Adopted Social Responsible Investment (SRI) Policy.

Since 2

^nd

July, 2014 became a candidate country of EITI.

Trying to become a Compliant Country of EITI.

 Adopted Social Responsible Investment (SRI) Policy.

 Since 2

^nd

July, 2014 became a candidate country of EITI.

 Trying to become a Compliant Country of EITI.

Update Investment Policy on Extractive Industries

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Investors of Mining Industries in Myanmar shall perform –

 Environment Impact Assessment and Social Impact Assessment (ESIA)

 Environmental Management Plan (EMP)

 Occupational health and safety assessment system (OHSAS)

 Funds Deposit to Designated Bank for Mine Closure, Mine Reclamation and CSR activities.

 Become a responsible mining projects.

Investors of Mining Industries in Myanmar shall perform –

 Environment Impact Assessment and Social Impact Assessment (ESIA)

 Environmental Management Plan (EMP)

 Occupational health and safety assessment system (OHSAS)

 Funds Deposit to Designated Bank for Mine Closure, Mine Reclamation and CSR activities.

 Become a responsible mining projects.

Update Investment Policy on Mining Industries

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 Amending the existing Myanmar Mines Law and Regulations with the technical assistance of AusAids, World Bank and individual experts.

 Targeting to create the Win-Win situation between the investor and the State.

 Upcoming Myanmar Mining Law and Related Laws are almost ready for Foreign Investor.

 Amending the existing Myanmar Mines Law and Regulations with the technical assistance of AusAids, World Bank and individual experts.

 Targeting to create the Win-Win situation between the investor and the State.

 Upcoming Myanmar Mining Law and Related Laws are almost ready for Foreign Investor.

Amending the Existing Laws and Related Regulations

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 Myanmar Mines Law was drafted for amending with the advice of experts, publics and technical assistance of AusAID, World Bank, the comments from the investors of Myanmar’s Mining Industries and experts who have internationally experiences.

 Upcoming Mining Law and Related regulation concern the environmental conservation, socio-economic of the locals and creating the Win-Win situation between the investors and the State.

Amending the Existing Laws and Related Regulations

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 The draft of the Myanmar Mines Law is already discussed at Parliaments.

 Also the Myanmar Mines Rules is drafted and almost finish to enacted within the 90 days after the approval for the Myanmar Mines Law from the Parliament.

 The Myanmar Mines Law and Rules are ready for you soon.

Upcoming Myanmar Mines Law and

Rules

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UPCOMING MYANMAR MINES RULE

Descriptio

n Existing Mining permit Future Mining Permit

Mineral

Prospecting Permit

 A period not exceeding 1 year.

 Extension period not exceeding 12 months.

Unchange

Mineral

Exploration Permit and Feasibility Study

 A period not exceeding 3 years.

 Extension permit one year at a time.

 Extension may normally be two occasion only.

Unchange

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Descriptio

n Existing Mining permit Future Mining Permit

Large Scale Mineral

Production Permit

 A period not exceeding 25 years shall be permitted.

 However, if the estimated life of the ore deposit proposed to be mined is less than 25 years only such period shall be determined.

 The land area is depend on investment amount and ore deposit.

 Extension period not exceeding 5 years at a time. ( may get 3 times to extend )

 The concession period and extension for mining permit will be set by the MIC’s notification.

 The land area is depend on ore deposit.

Medium Scale Mineral Production Permit

 Not Include.  Not more than 10 Year.

 Extension period not exceeding one year on four occasions.

Small Scale Mineral

Production Permit

 A period not more than 5 years.

 Extension period not exceeding one year on four occasions.

 Unchange

UPCOMING MYANMAR MINES RULE (CONTINUED)

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Descriptio

n Existing Mining permit

(Time and Area) Future Mining Permit (Time and Area)

Artisanal mineral Production Permit

 A period not exceeding 1 year.

 The land area not exceed 3 Acre.

 Unchange

Integrated Permit

 Mineral Prospecting, Mineral Exploration and Large Scale Mineral Production or Small Scale Mineral Production Permit.

 Unchange

Mineral Trading Permit

 Not Include.  In detail after getting the approval(including

Transporting, Storage and Trading for produced Minerals )

Mineral Processing Permit

 Not Include  In detail after getting the approval

.

UPCOMING MYANMAR MINES RULE (CONTINUED)

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Investment Information

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Foreign Investment Law (FIL)

(2

^nd

November, 2012)

Foreign Investment Rules

(31

^st

January, 2013)

Foreign Investment Law (FIL)

(2

^nd

November, 2012)

Foreign Investment Rules

(31

^st

January, 2013)

 Efficiency

 Transparency

 Environment

 Efficiency

 Transparency

 Environment Based on

Allowing

 Employment of Expatriates

 Land Lease

 Guarantee

 Incentives &

Exemptions

 Employment of Expatriates

 Land Lease

 Guarantee

 Incentives &

Exemptions

Advantages of New Foreign Investment Law

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Procedures of Foreign Investment

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 Company Registration in Myanmar

 Company Profiles and Other Relevant fact of company

 Recommendation and endorsement of the respective embassy

 List of Board of Directors

 Bank Statement

 Initial Work Program

 Map of Proposed Area with Respective Coordinate

 EIA, SIA , HIA Plan

6. 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.

5. The Proposal must include …..

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PSC Ratio

(Government Vs

Investor)

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State 30 (or)

35 Investor 70 (or)

65 Local Investor

PSC Ratio for the local investor could not negotiate because of low investment amount and using the ordinary mining technique.

Foreign

Investor ^Negotiable ^Negotiable

PSC Ratio for the Foreign investor can negotiate based on the following;

 Investment amount

 Type of mineral

 Ore reserve

 Cost of Production

PSC Ratio

(Government Vs

Investor)

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FISCAL REGIME IN MINING

SECTOR

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DEAD RENT FOR ONE SQUARE KM IN KYATS

Sr .

Type of Minerals

Prospecting

period Exploration Period

1

^st

Yr 2

^nd

Yr 1

^st

Yr 2

^nd

Yr 3

^rd

Yr 4

^th

Yr 5

^th

Yr

1 Industrial Mineral (or)

Stone 50,000 100,000 100,000 200,000 400,000 600,000 800,000

2 Metallic

Mineral 100,000 200,000 200,000 400,000 800,000 1,200,000 1,600,000

3 Precious Metallic

Mineral 200,000 400,000 400,000 800,000 1,60,000 2,400,000 3,200,000

Remark ; 1. Extension Period subject to the approval of the Ministry or the

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Department

2. Exchange rate subject to daily exchange rate.

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DEAD RENT FOR ONE SQUARE KM IN KYATS

Sr. Type of Minerals

Feasibility Study

period Developing Period

^Productio_{n Period}

1

^st

Yr 2

^nd

Yr 1

^st

Yr 2

^nd

Yr 3

^rd

Yr 1-20 Yrs

1

Industrial Mineral

Stone(or)

800,000 1,200,0

00 1,400,0

00 1,600,0

00 2,000,00

0 2,000,00

0

2 Metallic

Mineral 1,600,00

0 1,600,0

00 1,800,0

00 2,100,0

00 2,400,00

0 3,000,00

0

3 Precious Metallic

Mineral

3,200,00

0 3,200,0

00 3,600,0

00 4,200,0

00 4,800,00

0 6,000,00

0

Remark ; 1. Extension Period subject to the approval of the Ministry or the

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Department

2. Exchange rate subject to daily exchange rate.

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According 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.

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Royalty

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Promote the utilization of Myanmar valuable mineral resources for the production to refined products through the contribution of foreign investment with advanced technologies.

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Expectation

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Production Figures of Myanmar

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MINERAL RESOURCES OF MYANMAR

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General Category Minerals Very rich Jade, Ruby, Sapphire, Limestone

Rich Copper, Lead, Zinc, Tin, Tungsten, Gold, Coal, Barite Fairly rich Antimony, Silver, Nickel, Gypsum, Iron, Manganese,

Poor

Chromite, PGM Minerals, Radioactive Minerals, Diamond, Fertilizer Minerals, Fluorite, Bauxite, Mercury, Kaolin, Feldspar, Quartz, Bentonite, Mica REE,

- Myanmar at present can be categorized as four major richness on the status

of mineral resources.

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Sr. Mineral

Commodity Occurrence

s Deposit

s Total Tonnage ( Million Tons)

Remarks

P-2 P-3 P-4 Total

1 Columbite

Tantalite 3 2 5 0.00003 - 0.0036 0.0036

2 Coal 203 292 495 229.58 140.73 121.53 491.84

3 Gemstones 56 12 68 1.07 0.11 0.07 1.25

4 Copper 88 27 115 1308.55 688.52 0.19 1997.3

5 Feldspar 3 21 24 0.005 0.86 0.0002 0.865

6 Antimony 74 58 132 0.18 0.56 0.26 1.0

7 Chromite 23 20 43 0.02 0.04 0.02 0.08

8 Lead 163 128 291 13.28 12.67 18.14 44.09

9 Graphite 21 14 35 0.039 0.004 2.58 2.62

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Sr. Mineral

Commodity Occurrences Deposits Total

Tonnage ( Million Tons)

Remarks

P-2 P-3 P-4 Total

10 Tin –Tungsten 125 358 483 0.36

0.08 38.74

0.05 0.29

0.01 39.39 0.14 Ore

Concen trate

11 Gypsum 13 24 37 23.18 12.81 0.007 35.99

13 Zircon sand - 11 11 - 31.46 0.38 31.48

13 Limestone 30 422 452 3095.1 5982.4 49740.5 58818

14 Dolomite 17 24 41 22.16 7.41 7.73 37

15 Nickel 4 10 14 70 80.66 12.2 162.86

16 Fluorite 13 6 19 - 0.002 0.004 0.006

17 Phosphate rock 12 5 17 0.78 10.02 0.08 10.88

18 Baryte 19 53 72 0.11 1.36 0.23 1.70

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Sr. Mineral

Commodity Occurrenc

es Deposits Total Tonnage (Million Tons)

Remarks

P-2 P-3 P-4 Total

19 Bauxite 8 18 26 12.75 261.99 0.16 274.9

20 Porzolan - 6 6 - 651 - 651

21 Molybdenum 16 3 19 - 0.019 0.006 0.025

22 Manganese 21 31 52 2.9 2.66 5.34 10.9

23 Kaolin 3 64 67 3.401 0.457 33.11 36.97

24 Bentonite 2 20 22 - 22.06 2.04 24.1

25 Glass Sand 4 35 39 83.16 19.86 28.12 131.14

26 Gold 246 95 341 15.29

4.92 47.66

341.94 3.16

893.28 66.11

1240.2 Primary Alluvial (Cu..Yd.)

27 Platinum 14 5 19 4.2 1.37 26.95 32.52

28 Mica 26 4 30 - 0.0036 - 0.0036

29 Quartz 21 26 47 4 36.04 43.01 83.05

30 Iron 194 199 393 332.92 61.53 101.44 495.42

31 Zinc 18 11 29 5.21 14.41 0.33 19.95

32 Heavy Mineral 10 4 14 - 0.007 0.019 0.026

33 Decorative

Stone 62 31 93 7354 44966 504 52924

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Kyaw Thet, Mr Director

Department of Mines Ministry of Mines

Office Building No. ( 19 ), Nay Pyi Taw, Myanmar.

Tel : +95-67-409378 Fax : +95-67-409376

E-mail : [email protected]

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Contact Information

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