Myanmar Junta to Reopen Russian-backed Steel Plant

By The Irrawaddy 15 June 2021

The Myanmar regime plans to reopen the No. 2 Steel factory (Pinpet) in Shan State, which was closed more than four years ago. The plant, located near the Shan State capital Taunggyi, is a joint iron exploitation and processing project between the military-owned Myanmar Economic Corporation (MEC) and the state-owned Russian company Tyazhpromexport.

On Monday, the military regime and their Russian counterparts discussed the resumption of the Pinpet project during a meeting in Naypyitaw between the Russian ambassador to Myanmar, Dr. Nikolay Listopadov, and Dr. Charlie Than, the regime-appointed Minister of Industry.

A junta-controlled newspaper stated on Tuesday that the Russian ambassador and the junta minister also discussed bringing in Russian technical experts to inspect the steel mill, as well as discussing bilateral economic relations such as the production of medicines under the respective ministries of the two countries and working together on rubber and garment production.

Until it was suspended in early 2017, the Steel Mill construction project was run under a contract between the MEC and VO Tyazhpromexport, a subsidiary of Rostec (Russia’s State Corporation).

Located in war-torn Shan State, the Pinpet project has transformed the area, Mount Pinpet, or Pine Tree Mountain, into the country’s largest iron mine.

It is built on 5,260 acres of land in Pinpet, some eight miles away from Taunggyi.

The project, which began in 2004, was expected to produce 200,000 tonnes of pig iron and 720,000 tonnes of iron ore.

In 2014 the Ministry of Industry, under the quasi-civilian government led by President U Thein Sein of the Union Solidarity and Development Party, had an agreement worth 137 million Euros with Tyazhpromexport to produce iron ore for commercial utilization using the Russian Romlet process.

The pig iron was to be used as a raw material for steel production at the No.1 Steel Mill, Myingyan steel plant [which is also suspended], in Mandalay Region.

In September 2016, the state-run Global News Light of Myanmar – citing geological studies – announced that the mines near the mill could possibly produce 10.7 million tonnes of Hematite iron ore with 56.4 percent of iron ore property and 59.3 million tonnes of Lemonite iron ore with 42.6 percent of iron ore property.

The Pinpet plant was scheduled to start operating in late 2016.

However the project was halted in March 2017, after the National League for Democracy-led parliament inspected 24 loss-making state-owned factories, and suspended their operations largely due to financial concerns. Construction and operations at both the Pinpet mine and the Myingyan steel plant were stopped.

In 2017, the former ministers in charge of the Ministry of Industry, including U Soe Thane and former lower house lawmaker for Mingin U Maung Myint, criticised parliament’s decision to stop the construction and operations of those factories.

The Pinpet mine and the iron-processing factory have had a severe adverse impact on the ethnic Pa-O people living in the area and on the environment, as documented by the local Pa-O Youth Organization (PYO) in their 2009 report “Robbing the Future”. The report claims that the mining project threatens the local Pa-O community.

PYO’s report stated that a total of 7,000 people from 25 villages could be permanently displaced from their homes and farmland by the projects. A further 35,000 people rely on the water from the Thabet River in the Hopong valley east of the Mount Pinpet.

A local resident in Hopong told The Irrawaddy that they had not seen any activity near the project since its suspension in 2017. Another local said they had heard about the resumption of the project and that they didn’t want it to restart.

Both China and Russia have backed the junta in Myanmar since their Feb. 1 coup, saying that the military takeover is an internal affair.

Defense ties between Russia and Myanmar have grown stronger in recent years, with Moscow selling arms to a military blacklisted by several Western countries for alleged atrocities against civilians, as well as providing army training and university scholarships for thousands of soldiers.

Russia said in March that it wanted to further strengthen military ties with Myanmar despite the coup. Russian Deputy Defense Minister Alexander Fomin attended the Myanmar military’s celebration of Armed Forces Day on March 27, even as the international community was denouncing the coup.

Coup leader Senior General Min Aung Hlaing met Russian Defense Minister General Sergey Shoigu in Naypyitaw on Jan. 21, just 10 days before the military takeover.

In May, a high-ranking junta delegation led by Air force chief General Maung Maung Kyaw travelled to Moscow to attend an exhibition of Russian military helicopters. They reportedly discussed over 20 mega projects with their Russian counterparts, including the procurement of arms and military hardware.

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