A Russian-backed steel plant in southern Shan State will be fully operational by November next year, the junta claimed last Saturday.
The pledge came at a ceremony marking the trial run of the factory’s air compressor that was attended by Industry Minister Charlie Than, Shan State Chief Minister Aung Aung, Chairman of the Pa-O Self-Administered Zone Khun Ye Htwe, and executives and representatives from Russian firms including TPE, AGS, and Rostec.
Junta media said 19 out of the steel mill’s 22 workshops have already started test runs, and the mill is expected to be fully operational by November next year.
Described by the regime as an “important venture,” the No. 2 Steel Mill project in Pinpet near the southern Shan State capital of Taunggyi was shelved in 2017 by the now ousted National League for Democracy (NLD) government over financial concerns.
Since the coup in 2021, junta boss Min Aung Hlaing has been working to restore it with assistance from Russia in a bid to reduce U.S. dollar spending on iron and steel imports.
He has frequently accused the NLD government of “thoughtlessness” in suspending the project when it was already “98.86 percent” complete. Yet his regime has mysteriously struggled to complete what would be the remaining 1.14 percent over the past four years.
Built on 5,260 acres of land in Pinpet near Taunggyi, the steel mill is a joint iron exploitation-processing project between the military-owned Myanmar Economic Corporation and VO Tyazhpromexport, a subsidiary of Russian state corporation Rostec that also supplies weapons and military vehicles to the regime.
Started in 2004, the project was expected to produce 200,000 tons of pig iron and 720,000 tons of iron ore.
The regime spends an average of US$1 billion annually on iron and steel imports to meet domestic demand of 3 million tons, of which only 1 million is being produced in Myanmar, according to last year’s data from the Industry Ministry.
In October 2023, Min Aung Hlaing opened a railroad from the Pinpet plant to a road built to transport pig iron to the No. 1 Steel Mill in Mandalay Region’s Myingyan, which was also suspended in 2017 but has resumed operations since the coup.
The Industry Ministry claims the two steel mills will be able to produce around 5 million tons of iron and steel a year when fully operational.
But the Pinpet mine and iron-processing factory have had a severe adverse impact on the ethnic Pa-O people living in the area and on the environment, as documented by the local Pa-O Youth Organization (PYO) in a 2009 report titled “Robbing the Future”.
Russia is a major arms supplier to the regime, assisting in the nuclear technology, defense, and security sectors.
