U Ding Ying, Chairman, DELCO: Interview

U Ding Ying, Chairman, DELCO

Interview: U Ding Ying

In what ways are Myanmar’s new mining rules impacting international investment?

U DING YING: The new mining laws implemented in 2018 were designed with international firms in mind and have made it more straightforward to operate. The Ministry of Natural Resources and Environmental Conservation received over 1000 applications for new licences in the first six months after lifting the moratorium, signalling a degree of trust and suggesting that international firms believe that they will be able to operate in compliance and safely.

However, it still takes some time to receive this and other approvals. For exploration permits, for instance, companies can receive different information from different authorities, which can result in significant delays. It can take months for approvals to move between regional and union government bodies, and this may deter foreign investors. That being said, the processes at the Myanmar Investment Commission are quick and up to international standards.

How do you assess the effectiveness of current mining exploration efforts, and what opportunities are emerging as a result?

DING YING: Myanmar remains unexplored, and this will not be able to change without the latest technology. There are huge deposits across the country, and geological studies show that there is potential beyond the gemstones for which the country is known. However, much of this information is dated and does not reveal the full picture, especially at a deeper level.

Exploration licences are not quick nor easy to get, which means that firms must commit to the market for the long term. However, our joint venture (JV) with a foreign company – the first in the mining sector – opened the door for additional such partnerships. Moreover, officials will feel more comfortable giving licences as there is an example to follow. An increase in JVs will bring jobs to rural areas and enable the upskilling of local processing capabilities. Foreign capital and expertise is highly valued, and domestic partners can bring their experience to the table with the central and local government.

Where does community engagement play a role in the process of receiving a licence?

DING YING: In order to gain exploration approvals, a firm must engage in community consultation and education. This is not easy, but it is vital to explain to the local population the process of opening a mine, and what inconveniences and benefits it would bring. It is particularly important to highlight the construction of supporting infrastructure, financial multipliers and local job creation. In our experience a village-by-village seminar, including questions and answers, is the most effective manner for communicating with communities. The challenge is that in the past mining was associated with land grabs and environmental degradation. Trust must be gained, and this can be achieved by connecting with elders.

What will the impact of tin and tungsten be on the commodity export portfolio in the medium term?

DING YING: Tin and tungsten make up 10% of the mining sector, but we expect output to increase 10 times over in the coming years. The market for these minerals historically fluctuated significantly, especially when new mines opened. Despite this, demand for these minerals is rising. Due to its strength and high melting point, tungsten has been reclassified as a critical mineral by the US. Similarly, tin’s value as a coating material has led it to join the list of 35 essential minerals for the country. As such, both are considered vital for US economic and security interests, and we are starting to see demand reflect this. Today, China remains the world’s largest processor of tungsten, but in light of potential trade disruptions, a diversified supply will be necessary for countries such as the US.

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The Report: Myanmar 2020

Mining chapter from The Report: Myanmar 2020

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