Investment Opportunities in Mining

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    The Republic of the Union of Myanmar

    Ministry of Mines

    Investment Opportunities in Mining

    Sector

    Presented by U Win Htein

    Director General

    Department of MinesMinistry of Mines6/15/2012 1

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    1. Introduction

    ( i ) Organization Chart of the Ministry

    ( ii ) Legal Framework2. 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

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    IntroductionMinistry of Mines is the government

    authority responsible for implementation ofthe policy, legislation and enforcement of

    Law, Rules and Regulations in the miningsector.

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    Union Minister

    No.(1)Mining

    Enterprise

    No.(2)Mining

    Enterprise

    No.(3)Mining

    Enterprise

    MyanmarGems

    Enterprise

    MyanmarSalt

    and

    MarineChemical

    Enterprise

    MyanmarPearl

    Enterprise

    Departmentof

    Geological

    Survey&

    MineralExploration

    Departmentof

    Mines

    Organisation Chart of the Ministry

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    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.

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

    deemed to be owned by the State.

    Legal Framework

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    Compilation and Digital Geological map ofMyanmar 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 Myanmarregistration office in 2008.

    GEOLOGICAL MAP OF MYANMAR

    ( 2008 )

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    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

    NINETY

    E

    AST

    RID

    GE

    (proje

    ctiv

    e)

    Yangon

    THRUST

    ADAMAN SEA

    SH

    AN

    PL

    ATEAU

    MT.VIC TORIA

    DOME

    NAGA

    HIL

    LS

    Manipur

    CHINA

    THAILAND

    INDIA

    HIMALA

    YAN

    FRONT

    AL

    THRU

    ST

    INJUTH

    RUST

    Mt.Popa

    LOHIT

    THRUST

    THRU

    ST

    THRU

    ST

    DI

    SANG

    NAGA

    SHILL

    ONG

    MIKIR

    UPLIF

    T

    200 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

    MOGOK

    Mandalay

    Mawlamying

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    6/15/2012

    Ferrous Metals in Myanmar

    11

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    6/15/2012

    Non Ferrous Metals in

    Myanmar

    12

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    6/15/2012

    Coal & Industrial Metals in

    Myanmar

    13

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    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

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    Major minerals produced for domestic consumptions are-

    Gold

    Iron and Steel Limestone

    Industrial Minerals and

    Barites Powder

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    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 )

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    1. In accord with the policy of the Ministry of Mines, our

    ministry is not making own investment, but to encourageforeign 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 confirmthe 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

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    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.

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    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 theinvestment opportunities in mining sector mainly focus on

    mineral commodity and targeted area.

    Procedures for the ForeignInvestment in Mining Sector

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    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 Ministryof Mines two week ahead.

    4. After the site visit, if the investor decided to invest in Myanmar, aproposal 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.

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    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.

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    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.

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    Tax Regimein

    Mineral Sector

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    Dead Rent for one Square Km in Kyats

    Sr.Type

    ofMinerals

    Prospectingperiod

    Exploration Period

    1stYr 2ndYr 1stYr 2ndYr 3rdYr 4thYr 5thYr

    1Industrial

    Mineral (or)Stone

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

    2MetallicMineral

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

    3PreciousMetallic

    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.

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    Dead Rent for one Square Km in Kyats

    Sr.Type

    of Minerals

    Feasibility Studyperiod

    Developing PeriodProduction

    Period

    1stYr 2ndYr 1stYr 2ndYr 3rdYr 1-20 Yrs

    1Industrial

    Mineral (or)Stone

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

    2MetallicMineral

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

    3

    Precious

    MetallicMineral

    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.

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    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.

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    Categories of Mining Permits

    1. Prospecting Permits - 1 yr2. 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

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    ( )

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    Foreign Direct Investments(FDI)

    Sr.Enterprise

    orDept:

    CompanyType ofMineral

    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,

    MineponTownship

    (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

    Sr Enterprise Company Type of Current Location

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    Foreign Direct Investments(FDI)

    Sr. Enterpriseor

    Dept:

    Company Type of Mineral

    Currentstatus

    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 State6/15/2012 30

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    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 itsown, 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.

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    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