Burma Update

Burma Update

6th March 2006

Russians eye cast iron plant for Shan Shate

In an interview on Russo-Myanmar relations in the Feb 13th edition of the Myanmar Times, Alexey Semenikhin of the Russian embassy in Yangon is quoted as saying that the Russian government-owned enterprise, Tyazhpromexport, is set to invest about US$150 million to establish a plant to produce cast iron in Shan State. No further information is provided.

Burma's second largest known deposit of iron ore, as yet undeveloped, is at Pang Pet about 10 km southeast of the state capital at Taung-gyi. A geological report published in the 60s estimated hematite reserves of 10 million tons averaging Fe content of 56.4% and limonite reserves of 70 million tons with Fe content averaging 42.6%.

The only mill that currently processes iron ore mined in the country is the state-owned No 1 Iron and Steel Plant at Anisakhan near Pyin-U-Lwin. The ore smelted at Anisakhan is obtained from an open pit mine at Kyat-win-ye about 40 km to the southeast near the border with Shan State. The Anisakhan plant was built by an Italian company years ago and is currently being upgraded locally, reportedly to double production capacity up to 50,000 tonnes a year.

The largest iron ore deposit in the country is apparently at Kathaing Taung near the jade mines at Phakant where there are estimated reserves of over 200 million tonnes with average Fe grade of 50.56 %. Petrographic studies based on diamond drilling at the site indicate goethite/limonite content of 75%, hematite content of 15% and magnetite content of 2%.

Gold mining in the tiger reserve of the 22,000 sq km Hukawng valley national park is expected to taper off next year, presumably because the resource will be exhausted, rather than out of any concern for the environmental damage caused by the dredging of creek beds and the cyanide leaching process. (Myanmar Times: 06-02-06)

More problems for the small metal mining companies, this time the focus is on the tin/tungsten miners, whose operations are concentrated in Tavoy-Yebyu area. Burma was once the main source of tungsten in the world but production of both metals has trickled away to practically nothing in recent years, since the Mawchi mine has virtually ceased to function.

Tumbling tin prices trouble Myanmar miners

Yangon: Kyaw Thu: Myanmar Times

13th February 2006

Decreasing tin-tungsten prices on the world market are hampering Myanmar operations as miners struggle to make excavation of the metal profitable amid high operating costs.

A&A Natural Resources Development Co., Ltd general manager U Saw Han said the drop in world prices combined with the high cost of fuel and its irregular supply meant mining operations couldn't continue aggressive production methods. Tin was down to about US$3450 per tonne this month from $4525 in March 2005. "We have to buy diesel from the black market where the price is very high, so we can't produce at full capacity.

But we're trying our best," he said of the company's Kolanta mine in Dawei District.

Myanmar Tin-Tungsten Company director U Khin Maung Htay said the mining companies sometimes could not acquire enough diesel and this slowed production. "But we can't stop production because if we do we'll be the ones to lose out," he said. "We expected to produce five to seven tonnes of tin-tungsten a month and we expect to reach the target," he said. If the target wasn't met the company would not turn a profit, he added.

Other tin miners were beginning to shift to the excavation of higher-paying minerals rather than face profit reductions and uncertainty in the tin industry, U Khin Maung Htay said. U Zaw Min, a spokesman for Delco Company, which mines tin in Dawei district, said Delco's production was down slightly on last year.

[Thanks to Eric Snider for compiling and commenting on this information]