The Australian government has found that mining firm Mallee Resources Limited failed to consider the human rights impact of its ownership of the Bawdwin mine in Namtu Township, northern Shan State, upholding a complaint by rights groups.
Australian National Contact Point for Responsible Business Conduct, managed by Australia’s Department of the Treasury, reported that Mallee Resources did not assess the impacts of its joint venture with Win Myint Mo Industries Co Ltd (WMM), which has links to cronies previously sanctioned by the US for alleged drug trafficking and funneling cash to Myanmar’s military.
Mallee, formerly known as Myanmar Metals Limited, disinvested its entire stake in the Bawdwin mine in Myanmar’s northeast in August 2021, saying the “situation in Myanmar has undermined the confidence of markets”.
Mallee disposed of its 51-percent, US$30 million stake in the Bawdwin project to its partner WMM in Myanmar.
The Australian mining company in 2018 entered the deal with WMM, which had been given a 15-year license. Mallee held a 51-percent stake while Myanmar’s EAP Global Mining and WMM owned 24.5 percent each.
WMM was unavailable for comment on Wednesday.
Mining of silver, lead and zinc at Bawdwin dates back to the 15th century, with Chinese artisanal miners extracting silver from the surface and near-surface deposits. British underground mining commenced in the early 1900s under the management of Herbert Hoover, who became US president in 1929.
Before World War II, Bawdwin was the world’s largest-producing lead mine and one of the largest silver mines. After independence, state-owned firms held the mining concession until 2009, when WMM acquired the rights.
The complaint against the disinvestment of Mallee was submitted by Publish What You Pay Australia, Myanmar Alliance for Transparency and Accountability and the Bawdwin Labour Union to Canberra in September 2021.
The official Australian report said Mallee neglected to make proper disclosures about its activities and corporate structure in Myanmar.
The complaint said WMM evolved out of Asia World, a conglomerate that had been sanctioned by the US along with one of its directors, Steven Law, over ties with former military juntas and engagement in illicit activities.
Asia World’s founder Lo Hsing Han, a Chinese-Burmese tycoon and drug lord, was an important backer of the military before he died in 2013, and his son Law, who still runs the company, has also been accused of laundering military cash.
Mallee denied that it had not disclosed links between WMM and Asia World to the Australian authorities, saying it “carried out two rounds of due diligence on its partners and officers which confirm ownership/director holdings in WMM and there is therefore no disclosure to be made on this matter”.
WMM was officially a subsidiary of Asia World when it took control of the mine under a 10-year contract in 2009. In 2015 WMM became a subsidiary of the National Infrastructure Holding Co Ltd. Two founders of that firm, U Maung Kyay and U Than Myint, worked with Asia World for 20 years along with Law.
The Australian report said the history of abuse and fighting in Shan State over natural resources meant Mallee should have conducted enhanced due diligence to assess “the gravity of human rights abuses that could be caused, contributed to or directly linked to the Bawdwin mine”.
While the directors referred to an environmental and social impact assessment, Shanta Martin, the independent Australian examiner, found that there is no evidence that human rights risks were assessed.
The sale drew complaints from civil society organizations over fears that proceeds from the mine – which is forecast to produce US$2.9 billion in 13 years once operational – could fund Myanmar’s military and increase violence in northern Shan State.
