Great start to the year for one of the world’s best up-and-coming mining spots.
Late in December, lawmakers in the country signed new amendments to the national Mining Law. Which look set to make this high-potential nation a more attractive target for foreign investment.
One of the biggest challenges faced for mining contracts in Myanmar has been production sharing — which was generally included as a standard term, requiring operators to surrender up to 30% of output to the government. Related: Is 2016 The Year Of Wind And Solar?
That’s of course out of line with most mining jurisdictions globally. With production sharing generally being applied to oil and gas projects, but not minerals operations.
Recognizing this fact, Myanmar’s new Mining Law amendments propose that the government can instead elect to take equity interest in projects rather than production sharing.
Details on such participation are still to be finalized, but it appears the government will consider contributing to project funding in exchange for its equity share. Related: Oil Companies Shun South Chinese Sea As Geopolitical Tensions Rise
Another key amendment is an extension to terms for mining licenses. With large-scale projects now being offered tenure of up to 50 years — very much in line with global standards.
The new amendments fix royalties at between 2 percent and 5 percent, depending on the target mineral — which again, looks very regular against royalty rates in major mining nations.
The government further said it will be reviewing exploration permit sizes and license fees to ensure they are internationally competitive. Related: Fueling Star Wars’ Robots, What Powers The Droids?
All of this makes it look like mining licenses are going be available on attractive terms within the country, possibly for the first time ever. A fact worth noting for project developers — given Myanmar’s proven potential for world-class deposits of copper, gold, silver, lead, zinc, tin, tungsten, jade, rubies, and other commodities.
Myanmar’s Ministry of Mines now has 90 days to draft new mining regulations that take account of the revised Mining Law. Watch for these being released sometime in April to get full details on this unfolding opportunity.
Here’s to new times
By Dave Forest
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