Australian mining company Myanmar Metals Limited (MYL) has divested its entire stake in a historic mining project in Myanmar’s northeast, saying the “political situation in Myanmar has undermined confidence of markets.”
MYL said on Tuesday it had entered into binding agreements to dispose of its 51-percent stake in the Bawdwin project to its local partner Win Myint Mo Industries Co. Ltd. for a total of US$30 million.
The Australian company is the latest international investor to retreat from the Southeast Asian country, which has been in political and economic turmoil for more than six months since the military staged a coup on Feb. 1. In July, Norway’s Telenor, one of the largest telecom operators in Myanmar, sold all its businesses to a Lebanese company, saying it was too difficult to operate under military rule.
MYL said in a statement it had undertaken a detailed review of its assets and operations in Myanmar and determined that the political situation has undermined the confidence of markets identified by the company as sources of capital required for development of the project.
“Consequently, the board considers that the company can neither progress, nor indefinitely sustain its Myanmar operations without the realistic prospect of further and ongoing funding,” it added.
Prior to the divestment, the company said it had received a non-binding, conditional proposal from Chinese company Yintai Gold Co. Ltd. in June to acquire all of the ordinary shares on issue in the company. But MYL said “there has been no formal offer from Yintai capable of being accepted by MYL shareholders.”
MYL entered a joint venture deal for the mining project with local Win Myint Mo Industries Co. Ltd in 2018. At the time the local partner had been granted the mining operation for 15 years. While MYL holds a 51-percent stake, its local partners EAP Global Mining and Win Myint Mo own 24.5 percent each.
Mining of silver, lead and zinc at the Bawdwin dates back to the 15th century, with Chinese artisanal miners extracting silver from surface and near surface deposits. British underground mining of the deposit commenced in the early 1900s under the management of Herbert Hoover, who would later become the 31st president of the United States.
Prior to World War II, Bawdwin was the largest producing lead mine and one of the largest producing silver mines in the world. After the war the Myanmar state-owned mining entity held the mining concession until 2009, when Win Myint Mo Industries Co. Ltd (WMM) acquired the rights to produce.
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