The Republic of the Union of Myanmar

Ministry of Mines

Investment Opportunities in Mining Sector

Presented by – U Win Htein

Director General

Department of Mines

Ministry of Mines6/15/2012 1

1. Introduction

( i ) Organization Chart of the Ministry

( ii ) Legal Framework

2. Mineral Occurrence in Myanmar

3. 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 List

4. Conclusion

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

Union Minister

No.(1)

Mining

Enterprise

No.(2)

Mining

Enterprise

No.(3)

Mining

Enterprise

Myanmar

Gems

Enterprise

Myanmar

Salt

and

Marine

Chemical

Enterprise

Myanmar

Pearl

Enterprise

Department

of

Geological

Survey

&

Mineral

Exploration

Department

of

Mines

Organisation Chart of the Ministry

6/15/2012 4

�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 can

combine with our rich mineral deposits and new

technologies.

�So, I would like to invite the investors in Mining Sectors as

not only FDI( Foreign Direct Investment ) but also

partnership with local companies in Myanmar.

6/15/2012 5

� Now a days , MIC ( Myanmar Investment Commission) is trying to

promulgate the new Myanmar Investment Law.

� The Union of Myanmar Mines Law was promulgated in September

1994.

� Rules relating to the law followed in December 1996.

� At Present, Ministry of Mines is trying to amend the Myanmar Mines

Law 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 deposits

found either on or under the soil of any land in the continental shelf are

deemed to be owned by the State.

Legal Framework

6/15/2012 6

6/15/2012 7

• 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.

GEOLOGICAL MAP OF MYANMAR

( 2008 )

6/15/2012 8

MINERAL BELTS OF MYANMAR

Tin- Tungsten Belts

Antimony Belts

Lead – Zinc – Silver- Copper Belts

Gold- Copper- Iron Belts

Nickel- Chromite- Copper- Gold- Platinum Belts

Iron – Manganese Belt

The Precious Stone Belts

Oil- Gas and Coal Belts

INDEX

NIN

ET

Y

EA

ST

R

IDG

E( p

roje

ctiv

e)

Yangon

TH

RU

ST

ADAMAN SEA

SH

AN

P

LA

TE

AU

MT .VI CTORIA

DOME

NA

GA

HIL

LS

M anipur

CHINA

TH AIL AND

INDIA

HI MALAYAN

FRONTA L

THRU ST

INJU

T HR U

ST

M t.Popa

LOHIT

THRUST

THRUST

THRUST

DISA

NGNA

GA

SHIL LONG MIKIR

UPLIFT

2 00 km

92°

10°

12°

14°

16°

18°

20°

22°

24°

26°

28°

92°

94° 96° 98° 100° 102°

94° 96° 98° 100° 102°

N

10°

12°

14°

16°

18°

20°

22°

24°

26°

28°

MO

GO

K

Mandalay

M awlamying

6/15/2012 9

6/15/2012 10

6/15/2012

Ferrous Metals in Myanmar

11

6/15/2012

Non Ferrous Metals in

Myanmar

12

6/15/2012

Coal & Industrial Metals in

Myanmar

13

6/15/2012 14

Major Minerals Produced by the Country

�Major minerals produced and exported are -

� Cathode Copper,

� Refined Lead,

� Refined Silver,

� Zinc Concentrate,

� Refined Tin,

� Tin Concentrates,

� Tin-wolfram Mixed Concentrates and

� Coal

6/15/2012 15

�Major minerals produced for domestic consumptions are-

� Gold

� Iron and Steel

� Limestone

� Industrial Minerals and

� Barites Powder

6/15/2012 16

� Gemstones such as Rubies, Sapphire, colored gemstone and

Jade are also exported.

� Myanmar have held emporiums for Jade, Gems and Pearls

since 1964 with the pricing based on Foreign Currencies at

least twice a year. ( sell through tender or competitive

bidding )

6/15/2012 17

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

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

1. 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.

Procedures for the Foreign

Investment in Mining Sector

6/15/2012 20

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

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

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

Tax Regime

in

Mineral Sector

6/15/2012 24

Dead Rent for one Square Km in Kyats

Sr.Type

of Minerals

Prospectingperiod

Exploration Period

1st Yr 2nd Yr 1st Yr 2nd Yr 3rd Yr 4th Yr 5th Yr

1Industrial

Mineral (or)Stone

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

2Metallic Mineral

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

3Precious 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 Department2. Exchange rate subject to daily exchange rate.

6/15/2012 25

Dead Rent for one Square Km in Kyats

Sr.Type

of Minerals

Feasibility Study period

Developing PeriodProduction

Period

1st Yr 2nd Yr 1st Yr 2nd Yr 3rd Yr 1-20 Yrs

1Industrial

Mineral (or)Stone

800,000 1,200,000 1,400,000 1,600,000 2,000,000 2,000,000

2Metallic Mineral

1,600,000 1,600,000 1,800,000 2,100,000 2,400,000 3,000,000

3Precious 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 Department2. Exchange rate subject to daily exchange rate.

6/15/2012 26

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.

6/15/2012 27

Categories of Mining Permits

1. Prospecting Permits - 1 yr

2. Exploration Permits - 1 yr

3. Feasibility Study - 1 yr

4. Subsistence Mining Permits - 1 yr

5. Small Scale Mining Permits - 5 yrs

6. Large Scale Mining Permits - 25 yrs

6/15/2012 28

Foreign Direct Investments(FDI)

Sr.Enterprise

orDept:

CompanyType of Mineral

Current status Location

1. D.G.S.E Nobel Gold Limited(Russia )

Gold and associatedminerals

Exploration Bhamauk, Sagaing Region

2. ME(1) (i) ConerstoneResources

(Myanmar)Ltd(Australia)

Zinc Ore Production Shan State,

Minepon

Township

(ii) North Mining

Investment

Co.,Ltd

(China)

Ferronickle

Alloy

Feasibility Study Chin State,

Teetain Township,

Hmewtaung Track

(iii) Asia Pacific

Mining Ltd

(China)

Lead, Zinc ,

Copper,

Gold

Feasibility Study Kantbalu - Wuntho

(Eastern Area)

Sagaing Region6/15/2012 29

Foreign Direct Investments(FDI)

Sr. Enterpriseor

Dept:

Company Type of Mineral

Current status

Location

5. ME(2) Myanmar

Ponepipet Co.,Ltd

(Thai Land)

72% Tin

Concentrate

Production Taninthayi

Region,

Dawe Township,

Heinda Mine

6. ME(3) (i) Myanmar

CNMC Nickel

Co.,Ltd

( China)

Ferro Nickel Developing Thabeikkyin

Township,

Mandalay

Region

Hteechaik

Township,

Sagaing Region

(ii) Simco Song

Da Joint Stock

Company

( Viet Nam)

Marble Developing Nayputaung,

Taungkoke

Township,

Rakhine State

6/15/2012 30

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

Thank you very much for your kind attention.Thank you very much for your kind attention.Thank you very much for your kind attention.Thank you very much for your kind attention.

Ministry of Mines, Myanmar

6/15/2012 32