Ivanhoe Operations Shut Down in BurmaPublished by MAC on 2006-04-04
Ivanhoe Operations Shut Down in Burma
Contact: Tin Maung Htoo (519) 860-4745, or Jameel Madhany at (613) 884-8015
Ottawa, April 4, 2006 – Canadian Friends of Burma (CFOB) has learned that Vancouver-based Ivanhoe Mines ceased production at its copper mine near Monywa, Burma on March 30 2006, according to its annual report issued yesterday. The company cited expected decreases in production, inability to import additional mining equipment, and an additional 8% tax imposed on copper exports from Burma. The company also said that it is concerned about timely approvals for the expansion of the Letpadaung deposit.
Ivanhoe Mines was operating in Burma on the basis of a joint-venture with Burma’s state-owned Mining Enterprise No.1 (ME-1); the biggest mining company operating in Burma. It invested USD $150 million in mid-1990 and an additional USD $390 million was planned to invest in the expansion of Letpadaung project, located six miles southeast of the existing Ivanhoe-operated mine in Burma. The company’s stated ambition is to increase annual production to 200,000 tons of copper within four years, making it one of the largest copper mines in the world.
Until recently, Ivanhoe Mines has made steady profit - more than $25 million each year – from the existing S&K Mine. It stands out as one of the most profitable foreign operations for Ivanhoe, and was once considered the pearl of their mining empire. Ivanhoe has also diversified and entrenched its investments in Burma by partnering in ventures such as the Modi Taung gold project, holding 65% of its shares.
CFOB does not support any foreign investment that contributes significantly to the viability of the military junta governing Burma, without any discernable benefit to the Burmese population. CFOB particularly opposes the fact that Ivanhoe willingly entered into a joint-venture with the military, thereby guaranteeing millions of dollars to the coffers of the repressive junta. CFOB is also aware of situations that shed light on the role of Ivanhoe Mines in environmental degradation, such as waste drainage into the nearby river, Chindwin, and complicity in forced labor, for instance in building roads that benefit Ivanhoe’s operations..
Recently, Vancouver-based shareholder activists submitted a shareholder resolution, calling on the company to prepare a report to shareholders describing the corporation’s direct and indirect security arrangements with the regime, policies and management practices that preclude it from directly or indirectly benefiting from forced labour. However, Ivanhoe Mines refused to include the resolution in the circular for the 2006 Annual General Meeting on May 12th.
CFOB regards the cessation of Ivanhoe’s business operation in Burma as a first step in the right direction, towards the complete withdrawal of all investment from Burma. CFOB believes that the social, political and economic situation in Burma is not stable enough to secure both the profitability and security of foreign investments. The shutdown of Ivanhoe’s operations in Burma sheds light on how difficult it is to do business in Burma in the absence of a coherent rule of law and enforced regulations in the country.
Canadian Friends of Burma (CFOB)
145 Spruce St. Suite 206
Ottawa, ON K1R 6P1