Mining Laws and Regulations

MYANMAR’S MINING LAW PASSED (LATE DECEMBER 2015)

On 24 December 2015, the President of Myanmar signed much anticipated amendments to Myanmar's Mining Laws. The amendments address key issues of debate over the past year and will likely encourage foreign investment interest in the sector. The amendments introduce important new concepts designed to "promote the development of investment in respect of mineral resources" (new Section 3(c).

The mining regulations are still being prepared and reviewed by the Myanmar Government.

 

1. Revision of the Current Production Sharing Model

Currently production sharing contracts are imposed on miners (in some cases up to 30%), stipulating minimum quantities of production to be delivered to the Government on top of legislated royalties. The amendments contain a new Section, 35(A), which introduces two alternative mechanisms to allow the Government to derive benefit from mining activities: profit sharing or equity participation with the possibility of co-contribution. The introduction of these mechanisms will vastly alter the economics of mining in Myanmar and are likely to result in a step change in foreign investment in the sector.

 

2. Royalties

The amendments cause changes to the royalties applicable to minerals; now ranging from 2%-5% depending on the mineral.

 

3. Investment in Small and Medium Scale Projects

Where Myanmar companies hold small or medium scale permits, foreign investors will be allowed to apply to the Ministry of Mines to joint venture with Myanmar companies to expand the projects to large scale.

 

4. Extension of Permit Tenure

The amendments allow for an increase in the time permitted for large scale production, now up to 50 years. The amendments also introduce the concept of a "medium scale" mine where production will be allowed for up to 15 years.

 

5. Administrative Powers of State and Divisional Governments

The amendments allow for the formation of "Divisional or State Plot Scrutinizing and Permit Granting Boards" with the consent of the Union Government. These Boards will have the power to grant small and medium scale permits. We understand that the Government is currently contemplating allowing the new Boards to grant small and medium scale licenses within specific geographical areas in each State and Division. The areas are being defined with reference to existing small scale mining activity. All other areas in the State or Division would be governed under the federal system.

 

6. Social and Environmental Concepts

The amendments introduce the requirement for investors to maintain an environmental conservation fund. The concept of environmental rehabilitation post mine closure has also been introduced.

 

Please contact Valentis for a copy of the latest Myanmar mining laws and regulations

 

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