Republic of the Union of Myanmar Ministry of Mines Current Status of Mining Sector in Myanmar Presented by Kyaw Thet Director Department of Mines September 9,2014 1 Outline of Presentation Brief Introduction to Mining Sector of Myanmar Policies and Legislations Investment Information of Mining Sector PSC Ratio (Government Vs Investor) 2 Union Minister Dr. Myint Aung Deputy Union Minister U Than Tun Aung Dept. Of Mines DGSE U Win Htein Dr. Ye Myint Swe U Kyaw San (Director General) (Director General) (Managing Director) Mineral Policy formulation, Regulatory measures Royalty Collection Geological Geotechnical Analytical Laboratory ME 1 Lead, Zinc, Silver, Copper, Iron, Nickel, Cadmium, Cobalt, Tellurium, Mercury , Aluminum, Arsenic, ME 2 U Than Daing Acting Managing Director ME 3 U Htay Aung Managing Director Gold Tin Tungsten Rare Earth Titanium Platinum Molybdenum Radio Active Mineral Heavy Mineral MGE U Aung Nyunt Thein MPE U Seing Lwin Managing Director Managing Director Coal Lime stone Industrial Mineral Magnesium Asbestos, Graphite, Glass Sand, Barite Manganese dioxide Decoration Stones Gems, Jade & Jewellery MSMCE U Aung Myo Thu General Manager Pearl Salt By-product from Brine 3 Introduction to Myanmar’s Mining Sector © Photo: Soe Zeya Tun/Reuters 4 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. 5 Ministry’s Mission 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. 6 Permits Issued to Foreign Investors Sr. Company Registered Country Type of Mineral Type of Permit 1. Conerstone Resource (Myanmar) Ltd Australia Zinc Ore Large Scale Mining Permit 2. Myanmar Ponepipet Co.,Ltd Thailand Tin Concentrate Large Scale Mining Permit 3. Myanmar CNMC Nickel Co.,Ltd China Ferronickel Large Scale Mining Permit 4. Simco Song Da Joint Stock Co., Vietnam Marble Large Scale Mining Permit 5. Asia Pacific Mining Ltd. China Lead, Zinc , Copper, Gold Exploration Permit 6. Nobel Gold Limited Russia Gold and Associated Minerals Exploration Permit 7. North Mining Investment Co., Ltd. China Ferronickel Feasibility Study 8. De Rui Feng Investment Co., Ltd. China Tin-Tungsten Exploration Permit 9. Myanmar Yangtze Copper Co., Ltd. China Copper Large Scale Mining Permit 10. Myanmar Wanbao Copper Co., Ltd. China Copper Large Scale Mining Permit 11. Daewoo Precious Resources Co.Ltd Korea Copper, Gold 12. GPS Joint Venture Co.,Ltd China Lead, Zinc 13. Sichuan Chuandi( Myanmar) Mining Co.Ltd China Copper and associated Mineral 14. Royal Light Ron Ann Co., Ltd China Iron 15. Geo Pro Mining Sea Ltd Russia Antimony and Associated Minerals Exploration Permit Large Scale Mining Permit Exploration and F . S Exploration and F . S Prospecting, Exploration & F.S Mining Permits Issued to the Investors at the end of August 2014 Issued 2043 mining permits; Exploration Permit Small Scale Mining Permit Large Scale Mining Permit Subsistence Mining Permit Small Scale Prospecting 504 Nos - 1286 Nos - 138 Nos 48 Nos 67 Nos. Mainly for Gold, Tin, Tungsten, Copper, Antimony, Iron, Coal , Industrial Minerals, Marbles, Granite , Magnesium dioxide and lime stone. 8 Policies and Legislation 9 © Photo: Bencito the Traveller Mining Laws and Relating Laws Myanmar Mining Law (1994) Foreign Investment Law (2012) Myanmar Gems Law (1995) Myanmar Insurance Law (1993) Myanmar Pearl Law (1998) State owned Economic Enterprise Law Myanmar Mine Safety Law Protection of Wild Life and Wild Plants and Conservation of Natural Areas Law (1994) (Upcoming) Myanmar Explosive Law (Upcoming) Environmental Conservation Law (2012) Cultural Heritage Law (1998) 10 Issued Public Notice 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 10 meter from bank of rivers. 11 Update Investment Policy on Extractive Industries Adopted Social Responsible Investment (SRI) Policy. Since 2nd July, 2014 became a candidate country of EITI. Trying to become a Compliant Country of EITI. 12 Update Investment Policy on Mining Industries 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. 13 Amending the Existing Laws and Related Regulations 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. 14 Amending the Existing Laws and Related Regulations 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. 15 Upcoming Myanmar Mines Law and Rules The draft of the Myanmar Mines Law is already discussed at Pyi Thu Hluttaw and Amyothar Hluttaw .And submitted to the Pyi Daung Su Hluttaw for reviewing. 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. 16 Investment Information 17 Advantages of New Foreign Investment Law Foreign Investment Law (FIL) Based on Efficiency Transparency Environment (2nd November, 2012) Employment of Expatriates Foreign Investment Rules (31st January, 2013) Allowing Land Lease Guarantee Incentives & Exemptions 18 Forms of Investment 1 100 % Foreign Owned 2 Joint Venture 3 Any system included in the Mutually agreed contract A Citizen or Concerned Government Organization The party which mention in the contract. 19 Procedures of Foreign Investment in Mining Sector of Myanmar 4 3 2 Site visit 1 Letter of Courtesy Call Submit Proposal Officials discuss on mineral commodity 20 5. The Proposal must include ….. 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. 21 PSC Ratio (Government Vs Investor) © dreamstime 22 PSC Ratio (Government Vs Investor) Local Investor State 30 (or) 35 Investor 70 (or) 65 Foreign Investor Negotiable PSC Ratio for the local investor could not negotiate because of low investment amount and using the ordinary mining technique. PSC Ratio for the Foreign investor can negotiate based on the following; Investment amount Type of mineral Ore reserve Cost of Production 23 PSC Ratio (Government Vs Investor) 100% production deduct Royalty deduct Commercial Tax & Income Tax deduct Split between the investor and the State 24 Fiscal Regime in Mining Sector 25 Dead Rent for one Square Km in Kyats Sr. Type of Minerals Prospecting period Exploration Period 1st Yr 2nd Yr 1st Yr 2nd Yr 3rd Yr 4th Yr 5th 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 Department 2. Exchange rate subject to daily exchange rate. 26 Dead Rent for one Square Km in Kyats Sr. Type of Minerals Feasibility Study period Developing Period Production Period 1st Yr 2nd Yr 1st Yr 2nd Yr 3rd Yr 1-20 Yrs 1 Industrial Mineral (or) Stone 800,000 1,200,000 1,400,000 1,600,000 2,000,000 2,000,000 2 Metallic Mineral 1,600,000 1,600,000 1,800,000 2,100,000 2,400,000 3,000,000 3 Precious Metallic Mineral 3,200,000 3,200,000 3,600,000 4,200,000 4,800,000 6,000,000 Remark ; 1. Extension Period subject to the approval of the Ministry or the Department 2. Exchange rate subject to daily exchange rate. 27 Royalty 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. 28 Expectation Promote the utilization of Myanmar valuable mineral resources for the production to refined products through the contribution of foreign investment with advanced technologies. © Lorn Pearson Trains 29 Contact Information • • • • • • • • 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 : kthet2011@gmail.com 30 31