The first Myanmar Mining Summit started this week with more than 300 participants from 25 countries keen on investing in the mineral-rich country that has opened up its economy to foreign investors after the western world lifted economic sanctions earlier this year.
“The response is really positive as mining companies and investors are really keen to explore the opportunities in Myanmar’s mining sector,” Fu Huiyan, event manager for Singapore-based CMT (Centre for Management Technology), which is organizing the event along with the country’s mines ministry, told Resource Investing News in an interview.
The event, which finishes on July 25, has already proven to be such a success that CMT is already planning the country’s second mining summit for January 2013, to be held in Yangon.
Summit affirms commitment
Huiyan said the events affirms Myanmar’s “commitment to open its mining sector and bring it to the next level … to involve more partnerships and joint ventures with foreign companies.” For the attendees, the summit offers the first and until now non-existent opportunity to meet face-to-face with ministry officials and local companies to discuss partnerships and take projects to the next level.
With a wealth of minerals and natural resources — from oil to copper to gold to zinc — nations around the world are keen to invest in Myanmar. But the fledgling democracy still has many problems, from graft to infrastructure issues to ethnic tensions, which investors are leery of.
A quasi-civilian government took over from the military junta last year in Myanmar. The government has undertaken ambitious political and economic reforms and the European Union and the United States have responded with diplomatic gestures and easing of economic sanctions.
Most graft-ridden country
Myanmar ranks 180th – a spot it shares with Afghanistan – on Transparency International’s list of the world’s most graft-ridden countries. The list ranks 183 nations.
In the runup to the summit, Thailand’s PTT Pcl, the country’s top energy firm, said it plans to invest $2 billion-$3 billion in projects in Myanmar, including a 150,000-barrel-per-day refinery, coal mines and a power plant, as part of its drive to expand in Southeast Asia, according to report by Reuters on July 17.
Copper Investing News reported earlier this month that the country’s Ministry of Mines is eager to develop its copper sector, adding that Myanmar produced about 7,000 metric tons of copper in 2008, 54 percent lower than in 2007. “Analysts broadly agree that the country’s copper and mineral wealth clearly exists and could easily rebound at least to its former levels now that sanctions have been lifted,” the report said.
Investment law and geology
The Ministry of Mines is offering information for investors on topics such as “Updates on Myanmar Mining Law & Fiscal Regime” and “Updates on New Myanmar Investment Law for Foreign Investments in Mining Sector.”
In addition, the summit will also offer “geological data and information on the deposits of the mineral resources from the ministry as well as geological experts and veterans in Myanmar,” Fuiyan said. Myanmar needs an updated geological map to identify the extent of the minerals present in the country.
Marc Rathbone, counsel at the Singpaore office of Clifford Chance, told Resource Investing News that the summit is important for Myanmar to showcase its prospects. But he also cautioned about potential hurdles investors can face.
“As with all emerging markets and developing mining industries, there are certain hurdles to overcome,” he said. “In Myanmar these are not any different. One of the biggest legal challenges will be to overhaul its laws to give comfort to investors that they are protected when making their investments. Further challenges such as development of collateral infrastructure and overhauling the banking system will be key to investor security and finance.”
Securities Disclosure: I, Karan Kumar, hold no direct investment interest in any company mentioned in this article.