Friedland's power play in Burma - more prospective backing for a hated regimePublished by MAC on 2005-10-24
Friedland's power play in Burma - more prospective backing for a hated regime
Following a recent statement from Robert "Toxic Bob" Friedland that Ivanhoe Mines may sell its stake in the Monywa copper mine in Burma, a senior company official is now quoted as projecting a five-fold increase in production, so long as more power is available.
In the same statement, the official alllegedly said that the military regime had benefitted to the tune of US$1.25 billion, since the project came on stream in 1998.
Obviously intended as a play for cheap hydro electric power from the junta, this annoucement confirms what critics have been claiming for the last seven years: that Friedland's operations in Burma are one of (if not the) most important bulwarks of a hideously repressive regime.
IVANHOE LOOKING TO YEYWA PROJECT FOR POWER SUPPLY
Yangon: Kyaw Thu: Myanmar Times
A senior official from Canada-based Ivanhoe Mines' Monywa copper project said the company expects to increase its production by more than five times if there is a good enough power supply. Mr Mark L Whitehead, a director at the Myanmar Ivanhoe Copper Co Ltd (MICCL), said that by 2007 the company could increase its annual production to 200,000 tonnes from the current 39,000 tonnes. MICCL is 50-50 joint venture between Ivanhoe Mines and the No 1 Mining Enterprise under the Ministry of Mines, and since 1998 has been producing London Metal Exchange Grade A copper from its deposits near Monywa in central Myanmar.
"The key issue is power. If there is enough power the copper project will be able to increase production," said Mr Whitehead. "We are also waiting for approval from the Ministry of Mines," Mr Whitehead said in a presentation at the YMCA in Yangon last week.
Mr Whitehead said the power problem would be solved when the Yeywa hydropower project is completed in 2007. Yeywa project lies 31 miles southeast of Mandalay and is expected to generate 3550 million kilowatt hours a year in 2007-2008. "Hopefully we will get the approval from the government by 2007 when the Yeywa project becomes operational," he told Myanmar Times.
He said the plan to increase production follows a growing demand for copper and its higher prices in the world market. The joint venture currently produces about 100 tonnes of copper cathode a day, but the lack of power is one of the factors limiting expansion of the mines. The company's factory currently consumes more power than any other in the country.
"We need about 50 megawatts to support the production of 200,000 tonnes," said Mr Whitehead, adding that the Monywa project has firm global markets, including Japan and Thailand. He said the main beneficiary of the project is the Myanmar economy, and that the government has earned US$1.25 billion since the project started production in 1998.
Monywa copper mines have three deposits and MICCL is currently operating at two deposits called Sabetaung and Kyisintaung. The Monywa project employs more than 1000 people, which includes a few foreign expatriates. "Myanmar runs the mine site, and we train everyone from truck drivers to technicians," he said.
In a related development, Ivanhoe Mines is also seeking approval to mine gold from the Modi Taung deposit, about 150 kilometres southeast of Mandalay.
Comments Eric Snider:
It would certainly be a miracle if the Yeywa power project that Ivanhoe's Mark Whitehead is counting on produces electricity before 2010. A news item published in Dec 2004 quoted an official of the China Gezhouba Group, which is responsible for the cement work on the dam, as saying that its work on the project was targeted for completion in four years time. A recent news item said the concrete mixers had just arrived on site! Since it generally takes at least two years from the completion of a dam until the start-up of electric power production, it would appear that projections based on 2007 as the date when electricity will be available are hardly credible.
Yangon: Kyaw Thu: Myanmar Times
The demand for galena - a mineral that contains zinc, lead and smaller amounts of other minerals - has grown threefold in the past year as China purchases increasing amounts from Myanmar. China has eagerly consumed increasing amounts of a wide range of minerals as its economy has boomed, said mining officials in Myanmar.
"Demand for galena has increased by three times this year," said U Khin Maung Htay, an advisor from Every Strong Company Ltd, which has plans to begin mining for the mineral. He said that in previous years only one or two companies produced galena, but this year the number has increased to six or seven.
Sandi Mining Co Ltd, started producing galena two years ago after acquiring a 150-acre mine 25 kilometres south of Pyawbwe in Mandalay Division, from which it exports raw materials to China via border trade. Sandi produces 10,000 to 20,000 tonnes of galena a year, said U Zaw Myint Shwe, the company's business manager. He said the company has submitted a proposal to the Ministry of Mines to expand its operations to include new mining blocks. The company has also found new buyers from other countries, he said.
"We have received enquiries from Middle Eastern and ASEAN countries," said U Zaw Myint Shwe. Although Sandi currently relies mainly on manpower to mine galena, the company will start using more machinery when its operations expand, he said.
Note from Eric Snider: Galena is in demand in the electronics industry where it is used as an efficient rectifier for small currents of radio frequency.The main deposits of the lead oxide-zinc-silver group in Burma are found along the so-called Mogok belt, a mineral corridor that runs from Burmo-China ranges, through Mogok and along the edge of the Shan Plateau southwards through the Dawna and Tenasserim ranges. The two mining companies mentioned in this article seem typical of a growing number of small scale national mining outfits, attracted by industrial demand from China and other Asian and Middle East sources.
Ivanhoe Mines has backed away from a claim attributed to Mark Whitehead, senior V-P of Ivanhoe Myanmar Holding Ltd in Yangon that the Monywa copper mine had earned US$ 1.25 billion for the Myanmar government since it started production in 1998. Ivanhoe Investor Relations in Vancouver sent along a copy of a correction letter to the Myanmar Times from Whitehead in which he claimed he had been misquoted in an article that MAC published. What Whitehead claims to have told the Times reporter is that "approximately $US 1.25 billion in economic activity in Myanmar has been generated since production began in 1998".