laws and regulations concerning mining investment in myanmar

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DGSE Department of Geological Survey and Mineral Exploration

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DGSEDepartment of Geological 

Survey and Mineral Exploration

Union Minister

Myanmar Gems

Enterprise

Myanmar Pearl

Enterprise

Departmentof 

GeologicalSurvey &Mineral

Exploration

Departmentof

Mines

LeadZincSilverCopperIronNickel

ChromiteAntimony

GoldTin

TungstenRare EarthTitaniumPlatinum

REE

CoalLime stoneIndustrialMinerals ManganeseDecorative

stone

Gems,Jade& 

Jewelry

PearlBreedinghervesting Geological

SurveyMineral

ExplorationLaboratory

FDI

MineralPolicy

formulation,Regulationmeasures

Environmental

No.(1) Mining

Enterprise

No.(2) Mining

Enterprise

Organization Chart of the Ministry

Permanent Secretary(Forest Sector)

2

Permanent Secretary(Mining Sector)

3

Amended Myanmar Mining Law ( 2015 )

Myanmar Mining Rules(1996)( New  Myanmar Mining Rule are now under  preparation )

Amended Myanmar Gems Law (2016)

Myanmar Gems Rules( 1995)( New Myanmar Gems Rules are now under preparation ) 

Amended Myanmar Pearl Law (2014)

Myanmar Pearl Rules(2015)

MiningLawsandRelatingRulesofMyanmar

14

www.mining.gov.mm

StateownedEconomicEnterpriseLaw

ForeignInvestmentLaw(2012)

ProtectionofWildLifeandWildPlantsandConservationofNaturalAreasLaw(1994)

MyanmarInsuranceLaw(1993)

EnvironmentalConservationLaw(2012)

CulturalHeritageLaw(1998)

4

MyanmarMineSafetyLaw(Upcoming)

MyanmarExplosiveLaw(Upcoming)

OtherrelatedLaws

5

Investors of Mining Industries in Myanmar shall perform –

Initiate Environment Examination (IEE)

Environment Impact Assessment (EIA)

Environmental Management Plan (EMP)

Funds Deposit to Designated Bank for Mine Closure, Mine Reclamation and CSR

activities.

Become a responsible mining projects.

UpdateInvestmentrequirementsonMiningIndustries

Compare with amended law & old one.

Description 1994, Mining Law 2015, Amended Mining Law 

Permits 1. Mineral Prospecting.

2. Mineral Exploration.

3. Mining.

4. Integrated permit for above 

permits

1. Mineral Prospecting.

2. Mineral Exploration.

3. Feasibility Study.

4. Mining.

5. Mineral Processing.

6. Trading

7. Integrated permit for more 

than one permit.

6

Description 1994, Mining Law 2015, Amended Mining Law Large ScalePermit

A period not exceeding 25 yearsshall be permitted.

A period upon the estimated life of the oredeposit exceeding 15 years to 50 years.

Medium ScalePermit

Not Include. Not more than 15 Years.

Small ScalePermit

A period not more than 5 years. Not more than 10 Years.

ArtisanalPermit

A period not more than 1 years. Un change.

ExplorationPermit

A period not more than 3 years. Un change.

Feasibility Permit Not Include. Period may be 1 year.

ProcessingPermit

Not Include. Period may be 1 year.Purifying, Refining, smelting and electrowinning.

Trading Not Include. Period may be 1 year.Selling, purchasing, transporting  and storing .

Compare with amended law & old one.

7

Power Shearing for the sub national  level.

Description 1994, Mining Law

2015,Amended Mining Law 

Section (6) Subsistence (Artisanal)

production licenses of

gemstone, metallic mineral,

industrial mineral or stone,

shall apply to the respective

Mining Enterprise or to the

officer authorized by the

Ministry in accordance with

the stipulations for obtaining a

permit.

Prospecting, Exploration Small

scale mining or artisanal mining

licenses for metallic mineral ,

industrial minerals and stone

with local investment shall apply

to the sub national level license

allocation committee which is

formed by union Ministry.

8

Power Shearing for the sub national  level.

Description 1994, Mining Law 2015,Amended Mining Law 

Section(6)A Not include The Ministry may form the sub

national level license allocation

committee with the approval of the

Union Government.

9

Power Shearing for the sub national  level.

Description 1994, Mining Law 2015, Amended Mining Law 

Section (10) The respective Mining

Enterprise or the officer

authorized by the Ministry

may issue permit in respect of

subsistence production, of

gemstone, metallic mineral

industrial mineral or stone,

specified in the notification by

the Ministry.

The relevant sub national level

license allocation committee that

are formed and assigned with the

approval of the Union Government

may issue the permit consultation

with the Ministry for Prospecting,

Exploration Small scale mining or

artisanal mining licenses for metallic

mineral , industrial minerals and

stone. 10

Exclusive right

Description 1994.,Mining Law

2015, Amended Mining Law 

Section (11)A Not Include. If the person who was successfully done the

prospecting , exploration and feasibility study

of mineral permits applies for permit to carry

out production at the work site where he had

done, the license authority ( Ministry,

Department, sub national level license

allocation committee) have to allow him to do

so.11

Trading License

Description 1994. Mining Law

2015, Amended Mining Law 

Section(11)B Not Include. If the person who does not carry out

the mineral production himself but

carries out the mineral processing by

purchasing the minerals from the

person who carried out the mineral

production shall separately apply for

permit for trading .

12

Environmental Conservation

Description 1994. Mining Law 2015, Amended Mining Law 

Section (13)e ‐ 1 Not Include. Focusing on activities to minimize the

environmental degradation ,

socioeconomics impact on the local

community and raising fund for annual

environmental conservation work.

Section (13)e ‐ 2 Not Include. Accordance with the mine reclamation

procedures after the production or at the

mine closure stage, land preparation,

rehabilitation, re plantation have to perform

by raising a fund.

14

New opportunities for investors.

Geological map of Myanmar ( 1977)

Geological map of Myanmar by GIS( 2008)

NIN

ETY

E

AST

R

IDG

E(p

roje

ctiv

e)

Yangon

THRUST

ADAMAN SEA

SHA

N

P

LATE

AU

MT.VICTORIA

DOME

NAGA

HILLS

Manipur

CHINA

THAILAND

INDIA

HIMALAYAN

FRONTAL

THRUST

INJU

THRUST

Mt.Popa

LOHITTHRUST

THRUST

THRUST

DISANGNAGA

SHILLONG MIKIR

UPLIFT

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°

MO

GO

K

Mandalay

Mawlamying

Tin- Tungsten Belts

Antimony Belts

Lead – Zinc – Silver- Copper Belts

Gold- Copper- Iron Belts

Ni-Cr-Cu-Au-Pt Belts

Iron – Manganese Belt

The Precious Stone Belts

Oil- Gas and Coal Belts

MINERAL BELTS OF

MYANMAR

MINERAL PROVINCES OF MYANMAR

Tin- Tungsten Belt

Antimony Belt

Lead – Zinc – Silver-

Belt

Gold- Copper- Iron

Belt

Nickel- Chromite-

Copper- Gold-

Platinum Belt

Iron – Manganese Belt

The Precious Stone

Belt

Oil- Gas and Coal Belt

NIN

ETY

E

AST

R

IDG

E(p

roje

ctiv

e)

YangonTH

RUST

ADAMAN SEA

SHA

N

P

LATE

AU

MT.VICTORIA

DOME

NAGA

HILLS

Manipur

CHINA

THAILAND

INDIA

HIMALAYAN

FRONTAL

THRUST

INJU

THRUST

Mt.Popa

LOHITTHRUST

THRUST

THRUST

DISANGNAGA

SHILLONG MIKIR

UPLIFT

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°

MO

GO

K

Mandalay

Mawlamying

MINERAL DITRIBUTION

DGSE (2006)

8/16/2017 16

19

20

and FeasibilityCurrent Large Scale Joint Venture for Mineral Prospecting, Exploration

and Feasibility

21

Sr. Company Registered  Country 

Type of Mineral Area ( Acre) Type of Permit

1. Conerstone Resource (Myanmar) Ltd

Australia  Zinc Ore 1976.8 Large Scale Mining Permit

2. Myanmar PonepipetCo.,Ltd

Thailand Tin Concentrate 2110 Large Scale Mining Permit

3. Myanmar CNMC Nickel Co.,Ltd

China Ferronickel 5082.37 Large Scale Mining Permit

4. Simco Song Da Joint Stock Co.,

Vietnam Marble 585.72 Large Scale Mining Permit

5. Asia Pacific Mining Ltd. China Lead, Zinc , Copper, Gold 160419 Exploration Permit

6. Myanmar Yangtze Copper Co., Ltd.

China Copper 5841.44 Large Scale Mining Permit

7. Myanmar Wanbao Copper Co., Ltd.

China Copper 7946.36 Large Scale Mining Permit

8. Daewoo Precious 

Resources Co.LtdKorea Copper, Gold  23968.70

Exploration  Permit

9.GPS Joint Venture Co.,Ltd China Lead, Zinc 495 Large  Scale Mining Permit

10. Sichuan Chuandi

( Myanmar) Mining Co.LtdChina

Copper and associated

Mineral6500.3

Exploration and F . S

PermitsIssuedtoForeignInvestors

Sr. Company Registered  

Country 

Type of Mineral Area ( Acre) Type of Permit

11.  Royal Light Ron Ann Co., Ltd China Iron 500Exploration and F . S

12. Geo Pro Mining Sea Ltd RussiaAntimony and Associated 

Minerals2313

Prospecting, Exploration & F.S

13. Asia Mining Ltd Australia Heavy Sand 13195.14Feasibility Study

14.Myanmar VES Joint Venture 

Co.,Thailand Jewellery Making  0.11

Production

15. Myanmar Tasaki  Co., Japan Pearl  28159.52Pearl Firm

16. Myanmar Atlantic Co., Australia Pearl 10501.75Pearl Firm

17. Myanmar Adman pearl Thailand Pearl 19199.67 Pearl Firm

18. Belpearl S’pore Pearl 7680 Pearl Firm

19. Wuntho Resources Co.Ltd.Australia Copper and Associated 

Minerals90550

Prospecting, Exploration & F.S

20. LumpoondumMining Co.Ltd.Thailand Coal 63843 Exploration & Feasibility Study

21. Sino Chateau Co.Ltd.England Tin‐Tungsten and 

Associated Minerals

390 Exploration & Feasibility Study

Royalty

1994, Mining Law 2015, Amended Mining Law 

1. Gemstones 5 ‐ 7.5 %

2. Gold ,Silver, Platinum 4 ‐ 5%

( Precious metallic Minerals)

3. Iron, Zinc, Copper 3 – 4 %

( Other Metallic Minerals)

4. Industrial Mineral 1 – 3%

1. Gold , Platinum, Uranium 5 %

( Precious metallic Minerals)

2. Silver, Copper, Tin, Tungsten, 4 %

Nickel, Rare Earth, Titanium

3. Iron, Zinc, Antimony , 3 %

4. Industrial Mineral , Stone 2%

23

Investment Type

Description 1994. Mining Law

2015, Amended Mining Law 

Article (35) A Not Include. The Ministry shall carry out the operation by

cooperation with the permit holder in form of

Production Sharing ( include EIA cost)

Equity Sharing

Profit Sharing base on parties’ contribution.

24

Permitted Area Compare future mining regulation and old one

Type of Permit 1996 Mining Regulation

Future Mining Regulation

Prospecting Not more than 4200 KM2 Not more than 700 KM2

Exploration Not more than 3150 KM2 Un change

Large 

Scale

Depend  upon  the deposit size. Un change

Medium Scale  not include Industrial mineral      ‐ < 1 Km2

>  50 Acre

Other Minerals           ‐ <  50 Acre

Gold                             ‐ <  20 Acre

Small 

Scale

Industrial Mineral  ‐< 1Km2

Other Minerals      ‐ < 50 Acre

Gold                        ‐ < 20 Acre

Industrial Mineral  ‐< 20 Acre

Other Minerals      ‐ < 10 Acre

Gold                        ‐ < 1 Acre

Artisanal  < 1 Acre < 1 Acre 4

26

Sr MineralCommodity

Prospecting Exploration Feasibility Study Development Production up to 20 years

1st year 2nd year 1st year 2nd year 3rd year 4th year 5th year 1st year 2nd year 1st year 2nd year 3rd year1 Industrial

Raw Mineral(Coal, Lst, etc)

50,000 100,000 100,000 200,000 400,000 600,000 800,000 800,000 1,200,000 1,400,000 1,600,000 2,000,000 2,000,000

2. Metal(Cu, Pb, Zn, Sb, Sn‐W, Fe, Ni, Cr, Mn, etc)

100,000 200,000 200,000 400,000 800,000 1,200,000 1,600,000 1,600,000 1,600,000 1,800,000 2,100,000 2400000 3,000,000

3. Precious metal(Au, Ag, Pt, Ta, Nb etc)

200,000 400,000 400,000 800,000 1,600,000 2,400,000 3,200,000 3,200,000 3,200,000 3,600,000 4,200,000 4,800,000 6,000,000

RATE OF DEAD RENT ( Kyats / Sq. Km)

Funds required to conduct the prospecting, exploration, and feasibility study shall be

borne by the investor 100 % at his own risk.

Signature Bonus / Application Fee - Depends on the size of area

Performance Bank Guarantee - �

• Dead Rent according to the type of operations is shown in the table. Dead Rent is payableto the Department of Mines after acquiring respective permits. The rent levied is minimal.

Exchange Rate 1 US$ = 1350 Kyats (Aug, 2017)

27

Amending Myanmar Mines Law (2015)

Investors shall be enjoy on -

1. Selling and Purchasing ( Trading )

2. Large Scale Production - 15 Yrs to 50 Yrs

3. Medium Scale Production - Maximum 15 Yrs

4. Small Scale Production - Maximum 10 Yr

5. If Successfully Prospecting, - Shall allow to do

Exploration and Feasibility Study for Production

( Exclusive Right)

28

Foreign Investment Law (FIL)

(2nd November,2012)

Foreign Investment Rules

(31st January,2013)

EfficiencyTransparencyEnvironmentBased on

Allowing

Employment  of Expatriates

Land Lease

Guarantee

Incentives & Exemptions

AdvantagesofNewForeignInvestmentLaw

29

Investment

29

ProceduresofForeignInvestment

1. Letter of Courtesy Call

2. Officials discuss onmineral commodity

3. Site visit

4. Submit Proposal30

Procedures

31

6. After getting the approval of the Ministry and the completion of all the require recommendation documents,the proposal and the Agreement Draft will send to the Myanmar Investment Commission ( MIC ) forInvestment permit.

5.TheProposalmustinclude…..

• Proposal letter address to the Union Minister, the Ministry of Mines mentions the type of

mineral and area of interest attached with Form (1) and copy to DGSE

• Proposed area location map with coordinates.

• Recommendation and endorsement of the respective Embassy in Myanmar.

• Company Registration in Myanmar.

• Company Profile and other relevant facts about the company (Form – 6/26).

• List of Board of Directors and their Passport Copy, Photo, Address, Phone No

• Financial Bank Statement

• Financial Investment

• Initial work programme

• EMP, EIA, SIA, HIA Plan

i. Proposal letter (submit in 3 weeks ahead of the trip schedule)

ii. Field trip schedule

iii. Recommendation letter from the Embassy of the concerning country in

Myanmar(including Name and Passport No)

iv. Letter of undertaken for each personnel of the group with company letter

head

v. Individual Passport copy and visa (If arrival visa, need to submit within one

week in Myanmar)

• Proposal letter submit to the Ministry of Mines and copy to DGSE• Two geologists will accompany and assist during the site visit

DOCUMENTS REQUIRE FOR SITE VISIT

33

State 30  (or) 35

Investor 70  (or) 65

Local Investor

PSC Ratio for the localinvestor could not negotiatebecause of low investmentamount and using theordinary mining technique.

ForeignInvestor Negotiable

PSC Ratio for the Foreigninvestor can negotiate basedon the following;

Investment amountType of mineralOre reserveCost of Production

PSC  Ratio (Government Vs Investor)

34

ForeignInvestor Negotiable

Free EquityCarried Interest EquityLoan Financing

Equity Sharing(Government Vs Investor)

35

ForeignInvestor Negotiable

Split Ratio may be consider upon following ‐

Contribution of both parties.

Type of mineral .

Ore reserve

Cost of Production

Profit Sharing base on parties’ contribution(Government Vs Investor)

During 2015, the following various payments from companies to government in the gemstone sector applied:

Treatment

In the gems trade it is generally said that up to 90% of the world’s rubies and sapphires are heat treated, to improve colour and/or clarity.

In Myanmar, the number is thought to be lower, with estimates varying from 50 -80% of rubies and sapphires mined in Myanmar.

The majority of these stones are treated in Chanthaburi, Thailand. Many are returned to Myanmar for further cutting and polishing if necessary, and are then made into jewellery.

However, a considerable proportion stays in Thailand and sold on to international traders from there. Within the trade it is reported that ‘carriers’ smuggle the stones from Myanmar across the border into Thailand, then smuggle them back into Myanmar.

Even though Myanmar does have one or two heat treatment facilities, most gem dealers and traders prefer to take their stones to Chanthaburi, famous for its good quality heat-treating facilities and where it is perceived that the quality of the treated product will be much better than if the same treatment were carried out in Myanmar.

In the case of jade, all but the highest quality jade usually undergoes heat treatment and polymer resin impregnation to improve colour and lustre. This takes place directly at many mines but also in Hpakant and in Mandalay. It is not known what proportion of jade produced in Myanmar is treated, and little is known about this stage of the value chain for jade.

Sources also mention large numbers of jade treatment facilities in Chinese border towns. Given that much rough jade is said to go straight out of Myanmar informally, it is likely that this is the case.

We hope there’ll be more cooperation between Myanmar and your country in the near future.