A junta-operated steel mill allegedly involved in armaments production has ground to a halt after being attacked by People’s Defense Force (PDF) groups in Myingyan Township, Mandalay Region.
The PDF used 60 mm mortars to fire around 50 shells at No. 1 Steel Mill, where around 200 junta soldiers were based, on Aug. 16.
Casualties and the extent of damage from the attack are still unknown, said a member of Myingyan District PDF Battalion 3.
He said the plant had been producing iron and steel for weapons production.
The Irrawaddy could not independently verify his claim.
“The plant was running before the attack but has now halted production. When operating, machines in the plant could be heard in nearby villages the whole night,” he said.
Junta boss Min Aung Hlaing has visited the plant three times since the coup. His last visit was in May last year.
Junta administrative staff in Myingyan town fled to the steel mill after PDF groups launched a special operation to seize Mingyan District on August 10, according to resistance groups.
The operation has captured several junta positions during assaults in Myingyan, Taungtha, Natoegyi and Nganzun townships, the groups said.
No. 1 Steel Mill (Myingyan) was launched by the military-owned Myanma Economic Corporation (MEC) in 2004 with loans from China’s state-owned China Development Bank (CDB).
The MEC said it loaned US$ 1.176 billion to start the project, which would produce 400,000 tonnes of iron annually. The interest rate was 4.5 percent.
In 2012, the Industry Ministry under U Thein Sein’s quasi-civilian government took over the project after the MEC was unable to pay interest on the loans.
In 2017, the National League for Democracy (NLD)-dominated Parliament decided to suspend the project due to financial concerns.
The now-ousted NLD government had been paying US$345,000 a day to the CDB to service the loan before the two signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI) in 2020. The loan plus interest had exceeded 1.615 billion euros by that time.
After the 2021 coup, junta boss Min Aung Hlaing assigned his Industry Minister Charlie Than to restart the steel mill to realize his dream of producing steel domestically.
Min Aung Hlaing visited the mill in May last year after its Melt Shop 1 – where iron and scrap metal are melted and cast into steel – began operating in March. According to junta media, Italy’s Danieli Co. Ltd was involved in restarting the mill.
The plant has however melted only old vehicles over the past year, producing 11829.83 tonnes of steel billets, according to the Industry Ministry.
The regime has also revived No. 2 Steel Mill (Pinpet) in Shan State’s Taunggyi since the coup. It was also suspended under the NLD government in 2017.
The mill is a joint venture between the MEC and VO Tyazhpromexport, a subsidiary of Russian state corporation Rostec, which supplies weapons and military vehicles to the regime.
In June, the regime formed the Project Executing Agency tasked with assessing the need for the projects, hiring experts to analyze them, and setting targets – an indication that the projects have gone nowhere.
The regime is currently spending at least $1 billion annually on iron and steel imports to meet domestic demand of 3 million tonnes, of which only 1 million is being produced in Myanmar, according to the junta’s Industry Ministry.
The ministry claims the two steel mills in Pinpet and Myingyan will be able to produce around five million tonnes of iron and steel a year when fully operational.
