Chinese-Backed Firm Granted Massive Copper and Gold Exploration Permit in Myanmar

By Nan Lwin 3 June 2020

YANGON—The Australian-based subsidiary of a Chinese state-owned company has obtained a gold and copper exploration license for an area nearly the size of Singapore in Myanmar’s northern Sagaing Region, already home to many controversial copper mega-mining projects operated by Chinese companies.

PanAust received the license last Wednesday from Myanmar’s Ministry for Natural Resources and Environmental Conservation (MONREC) in Naypyitaw for a block that covers more than 185,000 acres (750 square km) in Sagaing’s resource-rich Wuntho Massif Region.

PanAust is an Australia-based company owned by Guangdong Rising H.K. Ltd, which is a wholly-owned subsidiary of Guangdong Rising Assets Management Co. Ltd (GRAM). GRAM is a Chinese state-owned company based in China’s Guangdong Province, which operates as an investment company in mineral resource development, electronics, industrial waste management, real estate and finance.

In Myanmar, PanAust has formed a joint venture with Myanmar Energy Resources Group International Company Ltd (MERG) called Wuntho Resources Company Limited (WRCL) to carry out the project. PanAust holds a 90 percent stake, while MERG holds the remaining 10 percent of WRCL.

According to PanAust, WRCL currently now holds seven exploration licenses that encompass more than 370,000 acres (1,500 square km) in the region.

In 2018, the company received exploration licenses covering 138,000 acres (562 square km) on the Ton Kyaung, Taung Kon and Naugphat blocks of the Wuntho Massif. In 2016, WRCL received exploration licenses for 52,600 acres (213 square km) in Sagaing, covering three tenement blocks: Hel Chain, Pin Hin Hka and Nam Awl.

Regional parliament lawmaker U Zaw Linn Oo, who represents Wuntho Township, said local artisanal and small-scale miners would be upset by the government’s decision to give large mining exploration licenses to the foreign-backed company.

“The decision came from the Union level, but here many locals are worried about what they are going to do for a living, because almost all of the major mining projects here are currently in the hands of companies backed by foreign investors,” U Zaw Linn Oo said.

“Since we are at the regional level, we could not interfere what the Union decided. But locals won’t accept it,” he added. “The area [licensed for exploration] is huge and locals will complain about it later.”

Sagaing Region is a major hot spot for large copper mining projects operated by Chinese companies, including the controversial Sabetaung and Kyisintaung (S&K) project and the Letpadaung project. Last year, locals protested against a proposal by Myanmar Yang Tse, the operators of the S&K project, to conduct a mining feasibility study on 113,900 acres of an area called Wazeintaung, covering nearly 120 villages within three townships. The study later had to be suspended over local fears about the environmental and social impacts of the project.

For many years, the Letpadaung copper mine has been operated by Myanmar Wanbao Mining Copper Ltd (MWMCL) and has made headlines due to land disputes and a series of violent crackdowns against anti-mining protesters. Two extensive reports by Amnesty International documented the mine’s devastating social impacts, including destroyed livelihoods and water resources due to toxic spills from mining waste. Villagers protesting against the project have received nationwide support.

U Zaw Linn Oo emphasized that Sagaing has already suffered massive environmental and social impacts due to mining projects.

“So far, no representatives from the company have come to explain to us about the project,” he said. “Many companies here are the same. They don’t communicate with us at all. They might think that they don’t need to engage with us since they were already granted permission from the Union.”

According to a PanAust press release, the company is focused on a sustainable business model for the production and sale of copper and gold as well as “delivery of production goals and astute, responsible growth.”

PanAust Executive Chairman Qun Yang said “PanAust has made significant improvements to healthcare, education and transportation infrastructure in the areas in which it operates.”

“In progressing our exploration activities in Myanmar, PanAust will leverage these award-winning sustainability practices to ensure the company’s activities contribute to the nation’s long-term economic growth and prosperity, including through job creation,” Qun Yang said.

PanAust is also involved in copper and gold mining in Laos with pre-development opportunities in Papua New Guinea and Chile. In Papua New Guinea, its subsidiary Frieda River Ltd runs the Frieda River Project on one of the largest known undeveloped copper and gold deposits in the world. Last year, based on a report from research center Jubilee Australia, the Guardian reported that the proposed project in Papua New Guinea threatens to destroy the health of a major river system, poison fish stocks and cause violent unrest.

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