Interview: U Maung Ko
How has the mining sector evolved in recent years in comparison to other sectors of the economy?
U MAUNG KO: For decades Myanmar’s merchants, local businesses, and national and regional governments lost contact with the international community. Thanks to ongoing democratic reform, countries that had a relationship with Myanmar in the past have started to reengage. Foreign companies have begun investing in the country again, which will undoubtedly have a positive impact on the business environment in years ahead.
Located in the centre of Asia, Myanmar is rich in natural resources. We also are blessed with a large, hardworking population, supplemented by the many Myanmar working in Thailand, Malaysia and Singapore that are returning to bolster the workforce. A lot of foreign direct investment (FDI) is currently being channelled into agriculture, energy, telecoms, manufacturing and tourism; however, the government understands that mining is a key sector that also needs to attract FDI. Although investment lags behind other sectors, mining is crucial for employment and regional development.
Given our bounty of natural reserves and the nature of mining operations so far, we are actually extracting very little of what we have. I strongly believe that large reserves would be discovered were foreign companies to invest in Myanmar’s exploration activities. Although we lack official data at the moment (a function of previous political restriction on investment), relevant geological studies suggest we should have large deposits of many natural resources in the country.
What impact do you expect the new mining law to have on mining activity and foreign investment?
MAUNG KO: The current law, enacted in 1994, may have been appropriate at the time; however, when compared to today’s international mining legislation, it appears very unattractive. The government is working alongside the World Bank and local and international experts to revamp the law accordingly. The government also invited the CEC and local mining businesses to join discussions on the development of the new mining law. Likewise, the CEC has consulted with a panel of experts that can also assist the government.
The association first sat down with the Ministry of Mines (MoM) to discuss recommended amendments. Then, after lengthy discussion and consultation, the first draft was submitted to parliament and is now under discussion by the upper and lower houses. Parliament must first approve changes in the law, at which point the CEC and the MoM will submit the proposed new law to parliament. If approved, which is expected in FY 2014/15, it must be enacted within 90 days.
The dynamic new law will cover many areas, including environmental impact, and will be in line with laws in established mining countries like Australia and Canada. Furthermore, I believe that the law will generate a huge influx of foreign investment once enacted.
What are the CEC’s priorities to ensure sustainable development and competitiveness of the sector?
MAUNG KO: Since we were established in June 2013, the CEC has been working alongside a panel of experts to define priorities for the sustainable development of the mining industry. We have also joined the ASEAN Federation of Mining Associations, which advocates for mining companies to embrace sustainable development growth, as well as social protection and natural resource conservation. To this end, we have collaborated with geological and environmental associations in Myanmar, and our general secretary is also a member of the Extractive Industries Transparency Initiative.
The goal is to have a CEC branch office in each of Myanmar’s 14 states as a platform for explaining and informing local miners about environmental protection, the old and new laws, and corporate social responsibility. To tackle the primary challenge (i.e., environmental impact), we are setting up institutions to improve the knowledge of mine operators. We strongly believe that this new framework, aimed at stimulating growth in the minerals sector, will benefit local communities.
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