Mining and Natural Resources

Myanmar is endowed with a wide variety of mineral resources.  It is rich in deposits of copper, lead, zinc, tin, tungsten, gold, coal and barite.   Economic sanctions and a historical lack of capital investment capital exploration by international and local companies have resulted in the development of only a few of the currently identified mineral deposits. Myanmar therefore has huge exploration and production potential. This potential coupled with greater political, administrative and legal stability which is expected to result from the transition to democracy means that at present there is no shortage of potentially lucrative investment opportunities available to foreign mining and exploration companies willing to engage with Myanmar.

The core pieces of mining legislation in Myanmar are the Myanmar Mines Law (“Mining Law”) and Government notification no.125/96 (the “Mining Rules”).

The Mining Laws contain general provisions on the objectives of and the implementation of the government’s mining and resource policy together with provisions relating to the application for and the granting of permits, the duties of permit holders, the right of utilization of land and water for mineral production, royalties, the designation of mineral reserve areas and gemstone tracts and the duties of the chief inspector.

The Mining Rules contain more specific provisions relating to the exercise of the powers conferred under section 39(a) of the Mines Law and the application for and granting of mineral prospecting permits, mineral exploration permits, large and small scale mineral production permits, integrated permits for more than one operation, and subsistence mineral production permits. It further sets out particulars relating to the duties and rights arising under the respective mining and exploration permits, as well as permit transfers, surrenders and cancellations, the entering into of agreements, employee rights and remuneration and conditions of employment, environmental obligations, and mine inspections.

The Ministry actively encourages both foreign and local investment in Myanmar’s mining sector. Foreign investors can invest directly through FDI or alternatively via JV’s.

All prospecting and explorations costs, including costs arising from the preparation of a feasibility study, are borne by investors at their own risk. Investors are permitted to pursue grassroots or ‘blue sky’ exploration projects and to undertake research and analysis to establish reserve estimates providing the correct approvals have been granted by the Ministry. No. (2) Mining Enterprise is the relevant Ministry branch for projects involving gold, tin, tungsten, rare earths, titanium and platinum.

The exportation of raw unprocessed ore is prohibited. Foreign invested projects must add value through mineral processing. The Ministry encourages the establishing of processing plants and the use of the latest mining and processing technologies.

Myanmar intends to build a national mineral data base to conform to ASEAN standards. At present there are in the region of 1000 local companies engaged in mineral exploration and production.