Investment Opportunities in Mining Sector in Myanmar


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Investment Opportunities in Mining Sector in Myanmar

  1. 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. 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. 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. 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. 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. 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. 7. 6/15/2012 7
  8. 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. 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. 10. 6/15/2012 10
  11. 11. Ferrous Metals in Myanmar6/15/2012 11
  12. 12. Non Ferrous Metals in Myanmar6/15/2012 12
  13. 13. Coal & Industrial Metals in Myanmar6/15/2012 13
  14. 14. 6/15/2012 14
  15. 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. 16. Major minerals produced for domestic consumptions are- Gold Iron and Steel Limestone Industrial Minerals and Barites Powder6/15/2012 16
  17. 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. 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. 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. 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. 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. 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. 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. 24. Tax Regime in Mineral Sector6/15/2012 24
  25. 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. 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. 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. 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. 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. 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. 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. 32. Thank you very much for your kind attention. Ministry of Mines, Myanmar6/15/2012 32