The suspension of tin and other mining operations in Wa State is expected to have the greatest impact on China, as the autonomous region in north-eastern Myanmar is its largest source of imported tin, according to the International Tin Association (ITA).
However, a spike in exports of tin concentrate from Wa State to China’s Yunnan province before the ban was imposed, as well as a decline in demand for the mineral, will likely mean that Chinese producers will be unaffected until the fourth quarter of the year, tin traders say.
The Wa State government imposed the ban on mining on August 1, after previously announcing it would do so in April.
The ITA confirmed that all mines and processing plants ceased production in Wa State on August 1.
The United Wa State Party controls the region bordering Yunnan province in northern Shan State. Its armed wing, the United Wa State Army (UWSA), is the most powerful ethnic armed group in Myanmar.
A statement issued in April, provided to The Irrawaddy by the Wa State Central Economic Planning Commission, said the ban on mining was being implemented to protect the remaining mineral resources in the state and that all mining and excavation of mineral resources would be suspended until enhanced mining regulations and monitoring were implemented.
Mining has been permitted in the state for more than 10 years, but due to a lack of experience in the early stage, the commission admitted that it had not been able to adequately control or monitor the industry. It said it had been unable to conduct comprehensive inspections of mines and systematic monitoring of mineral production.
“As a result, a lot of mineral resources were … wastefully exploited,” the state’s government said.
In May, the Wa State Ministry of Finance and the Bureau of Industry and Mining issued a comprehensive action plan for the mining industry, which included a ban on mining and the imposition of tighter regulations to protect the environment, ensure safety and protect workers from exploitation.
Mining is a major source of income for the state.
A Wa State official told Reuters: “Tin mining is the pillar of our economy. It’s the biggest source of income.”
Besides tin, Wa State produces zinc, lead, and smaller amounts of gold.
The proven tin ore reserves of Wa State amount to more than 50 million tons. The state accounts for 95 percent of Myanmar’s tin production, according to the US government’s National Mineral Information Center.
Tin ore from Wa State entered the global market after huge quantities of high-grade ore were discovered in the state in 2013. According to a Reuters report in 2016, Man Maw tin mine in Wa State is controlled by seven companies.
These companies have to pay a 25 percent ore tax, land fee and mining permit fees annually to the Wa State government. However, the companies are also owned by the UWSA’s commanders, deputy ministers and the head of the industrial mining bureau.
An explosion at the mine in May of last year killed at least nine miners and prompted a safety review of the mine. The link between the safety review and the subsequent ban is unclear.
Wa State is the major source of tin imported to China, the world’s largest producer of refined tin.
In 2022, almost two-thirds of China’s imported tin concentrate came from Myanmar, totalling 48,000 tonnes, according to the ITA.
From China, tin mined in Wa State enters the global supply chain and ends up in products made by Apple and Tiffany & Co, among others, according to an investigation by Reuters.
The ITA forecast that the suspension of tin production in Wa State would likely reduce the output of tin smelters in China in the second half of this year. The benchmark three-month tin price on the London Metal Exchange was up around 2 percent this week, while all other base metals were down.
Wa State has about 2 million tonnes of mined raw ore that can be refined into 5,000 to 6,000 tons of tin concentrate, according to the ITA. An additional 1,500 tons are awaiting clearance at Meng’a Port, potentially leading to stagnating exports after August 10, the ITA said.
Wa State did not say when mining would resume. Previously, tin traders expected the ban to last three months, but that forecast now seems overly optimistic as the Wa State government appears determined to enforce its action plan to modernize and better regulate mining, according to the ITA.
Until it resumes normal production, Chinese smelters are expected to gradually decrease production. The ITA has said that production levels in the second half of this year are unlikely to reach the same levels they were at during the first half of the year.
