Letpadaung Copper Mine to Resume Operations

By Lawi Weng 26 July 2013

NAYPYIDAW — The controversial Letpadaung copper mine is set to resume operations, a union minister said on Thursday, following the signing of a new contract that gives the government a large share of the mine’s profits.

Hla Tun, a union minister from the President’s Office who chairs the Letpadaung mining project implementation committee, said 1,300 employees would soon return to work at the mine in northwest Burma’s Sagaing Division.

“The mining project will start in the next two months,” he told reporters at a press conference in Naypyidaw, adding that the project would be a model for other foreign companies seeking to invest in the country.

Burma’s government and the Chinese-backed Wanbao Mining Ltd signed a new contract this week with amendments to the former contract, which was signed during the previous military regime.

Operations at the mine have been suspended since November, following a brutal police crackdown on peaceful protesters who opposed the project’s environmental and social impact on local communities. The crackdown left dozens of people injured and prompted the government to set up a parliamentary committee to investigate the project’s viability.

Wanbao pledged in the new contract to meet international environmental standards and to give jobs to local people, while also investing in education, health care and community development.

“Our project will benefit the community,” Geng Yi, manager of Myanmar Wanbao Mining Copper Ltd, told reporters. “People in the community will see improvements in education and health care.”

Burma’s deputy minister of religious affairs, Soe Win, said the project would affect local Buddhist sites.

“All pagodas at the mining site need to be relocated because it is not suitable to keep them in the mining area,” he said. “We have already talked to other senior monks about this.”

The new contract was signed on Wednesday by the government and Wanbao without prior consultation with the public.

“In the past there were problems because they signed the contract without informing the public,” said Khin San Hlaing, a lawmaker and member of the parliamentary committee tasked with investigating the mining project after the crackdown. “Now they have done it again, failing to inform the public.”

“I only learned about this a day ago when they came to explain in Parliament,” she added. “Even then, they did not explain the details.”

Wanbao says it has invested US $600 million in the project and the company intends to produce 40,000 tons of copper monthly.

Thant Shin, a minister from the President’s Office, said local communities had become critical of the project due to influence from activists who oppose it for political reasons.

“There are people who want to paint [the situation] in a different color, for political motivations, to stop this project, and they are feeding the wrong message to the people,” he said.

According to the new contract, Burma’s government will have a 51 percent stake in the mine, while Wanbao and its business partner, the military-backed Union of Myanmar Economic Holdings Ltd (UMEHL), will retain 49 percent ownership. Previously, Wanbao and UMEHL held complete control.

The amendments include legal requirements that 2 percent of net profits be allocated for corporate social responsibility projects, with a focus on communities affected by the mine.

Through the commercial production period of the project, Wanbao is also required to pay $2 million per annum to ensure international standards in environmental protection are met.

Wanbao views the agreement as “heralding a new dawn in the relationship between mining companies and their host countries,” according to China’s state-run Xinhua news agency, citing a press release.