Ivanhoe Mines To Leave MyanmarPublished by MAC on 2006-05-19
Source: Courier Information Services ()
IVANHOE MINES TO LEAVE MYANMAR
Courier Information Services
19th May 2006
VANCOUVER - Ivanhoe Mines has decided to pull up stakes and sell out its mining operations in military-ruled Myanmar.
The decision to withdraw from the country was revealed to representatives of a corporate watchdog group of Amnesty International at the company's annual meeting in Vancouver on May 12 by Edward Flood, company vice-president.
During the meeting Flood told shareholders that Ivanhoe's directors had decided to sell half its 50% stake in the Monywa copper mine in Myanmar to a South Korean mining consortium.
Later, Flood approached Fiona Koza and Tracy London of the Amnesty group and told them that that the decision to sell out a half interest in the Monywa mine reflected the "tricky situation" for the company in the southeast Asian country. According to Koza, Flood indicated that the company's directors had thought it best to "start to move out" of Myanmar.
Details of the move to sell to the South Korean consortium began to emerge in April when a government official in Seoul told business reporters that Robert Friedland, chairman of the Ivanhoe board, had exchanged a memorandum of understanding about the partial sale of Ivanhoe's stake in the Monywa mine with KRC president Park Yang-soo after visiting Myanmar in January. A final agreement on the sale to the Korean group is slated for signing in July.
The KRC consortium will consist of Daewoo International, the Korea Resources Group, and Taihan Electric Wire. It will eventually hold a 25 per cent stake in the Monywa operation with Daewoo taking a 10 per cent stake and Taihan and Korea Resources 7.5% each. The sale to the Korean consortium was said to be worth US $ 120 million. After the final agreement is signed, the majority shareholder in the Monywa operation will be Myanmar's military government which already owns 50% of the mine.
The Myanmar Times reported last week that ten representatives of the South Korean consortium had visited Yangon in late April to discuss the sale. An unnamed diplomat told the Times that the delegation had studied survey data from the mine. He said that the contract was still in the discussion stage with Ivanhoe and that final agreement to approve the sale rested with the Myanmar government.
The future of the Monywa mine, currently producing about 35,000 tonnes of copper cathode annually, lies in the development of the nearby Letpadaung deposit. It is reported to contain almost a billion and a half tonnes of high grade copper ore which will need an extensive capital outlay to reach the production stage. Ivanhoe, which is close to starting up what is billed as the world's largest copper and gold mine at Oyu Tolgoi in Mongolia, is looking to attract other partners to join it in developing the Mongolian mine. Earlier this year, it revealed that U.S. sanctions against Myanmar and the financial difficulties of the country's military government were seriously affecting the Monywa mine and the future of its operations there. It is believed that the decision to eventually leave Myanmar is primarily dictated by Ivanhoe's need to attract other partners for its Mongolian prospects.