Australian Mining Firm Faces ‘Continuous Delays’ in Karenni State

By Seamus Martov 17 February 2017

Eumeralla Resources, a Perth-based firm listed on the Australian Stock Exchange, and its local Burmese partner Myanmar Energy Resources Group (MERG) first applied to explore a 400 square kilometer area of eastern Karenni State for tin and tungsten in July 2013.

The application, which was made through Eumeralla’s local Burmese subsidiary Mawsaki Mining Company—which is 70 percent owned by the Australian firm—was approved by Karenni State authorities in October 2014 but still must be approved by the Union government before it can proceed.

It remains unclear when the application will be approved, however—a process, which the firm noted in a recent filing, has been subject to “continuous delays.” Eumeralla has claimed that, when finalized, the exploration lease “would be one of the largest foreign held concessions in Myanmar [Burma].”

The application has raised concerns amongst environmentalists and activists, who worry that giving Eumeralla’s subsidiary authorization to explore a vast stretch of the state that has been beset by conflict for decades would lead to further tensions in the area and increase the likelihood of a renewed conflict. The firm did not respond to questions from The Irrawaddy about its Burmese operations.

The firm had earlier stated that it expected the approval to happen last year; Eumeralla now states in its latest quarterly report released on Jan. 31 that it expects the approval to come later this year. The area the firm has applied to explore includes Hpasawng Township—also known as Hpahsaung or Pasaung—which is home to the Mawchi mine, a site that during the colonial period was considered one of the biggest tin and tungsten mining areas on the globe.

While Eumeralla’s press releases and quarterly reports have noted that Karenni State is “well known for the historical Mawchi tin and tungsten mine,” and emphasized that the concession area where it has applied for has the “potential for a primary tin and tungsten discovery,” there is no mention of the decades of conflict that took place between armed groups and the military in the state and around Mawchi in particular.

Though a ceasefire was reached between the Karenni National Progressive Party (KNPP) and the central government in 2012, the situation on the ground in Karenni State, which is home to several other militia groups and a huge military presence, remains far from an ideal place to conduct mineral exploration.

Local environmentalists from the Molo Women Mining Watch Network (MWMWN), a group that derives its name from a stream in Hpasawng Township that has been seriously affected by ongoing mining operations in the area, have called for a moratorium on mining in the state while the long-running conflict with the KNPP remains unresolved.

“Without genuine peace, the mining expansion by companies and the government will fuel renewed armed conflict and bring further suffering to local people,” warned a report issued by the group in 2013.

Fighting between the army and the KNPP in eastern Karenni State in the 1990s forced thousands of refugees into Thailand where many still remain. There are at present several thousand refugees from Hpasawng Township living in camps in Thailand’s Mae Hong Son province.

The expected eventual return and resettlement of these refugees back to Hpasawng Township, and any claims they may make on land they previously used to live and farm on, could significantly complicate Eumeralla’s future plans for the area.

Eumeralla’s regulatory filings state that the remaining 30 percent stake in Mawsaki is held by the Rangoon-based MERG, whose website describes itself as having “operations across a diverse range of business sectors in Myanmar.” MERG is also involved in a joint venture with Australian registered mining firm, PanAust, to develop three exploration concessions in Sagaing Division that cover 1,400 square kilometers.

It remains unclear when Mawsaki was established or when Eumeralla acquired it. The report from MWMWN, which was released in October 2013, alleged that Tun Kyaw, the head of the Karenni National People’s Liberation Front (KNPLF), was part of the ownership of Mawsaki.

Mawsaki is also the name of a small village controlled by the KNPLF that is located in Hpasawng Township.

The KNPLF, who broke away from the KNPP in 1978, have been in a ceasefire with the central government since 1994. Tun Kyaw, who formally transformed his group into a border guard force (BGF) in 2009, is widely considered to continue to hold influence over the two KNPLF BGF units that operate in the state.

One such unit, No. 1004 led by Maj Ree Samar, is based in Hpasawng Township, where Eumeralla’s regulatory filings indicate Mawsaki is seeking to explore.

Eumeralla announced in December last year that it would acquire Ausmex Mining, a privately-held mining firm connected to Australian mining entrepreneur Wayne McCrae. Eumeralla will change its name to Ausmex Mining Group Limited. After the takeover is completed, McCrae is expected to hold a 27.3 percent stake in the newly merged firm.