Wanbao and Ministry of Mines to finalise new Letpadaungtaung deal
Myanmar’s Ministry of Mines and the Chinese Wanbao Company operating the controversial Letpadaungtaung copper mine project are planning to finalise signing a new contract on July 24, according to the reports of Ministry of Mines.
The Ministry of Mines will submit a newly amended contract to parliament and hold a press conference.
Last year, police responded to demonstrations against the project's environmental and social impacts with a brutal crackdown on November 29, using phosphorous against protesters.
A probe led by opposition leader Aung San Suu Kyi called for the contract to be reviewed, and for fair compensation to be provided for farmers of land confiscated for the project.
The old contract allowed Wanbao Mining Ltd. and Union of Myanmar Economic Holding Limited (UMEHL) to share 96 percent profit and the Ministry of Mines under the No.1 Mining Enterprise would only charge four percent as a mineral tax. According to the newly-amended contract, the No.1 Mining Enterprise will gain 51 percent profit, Wanbao get 30 percent and the Union of Myanmar Economic Holding Limited (UMEHL) 19 percent.
In Letpadaungtaung, copper production costs US$ 3,600 for one ton of copper. If exported, one ton price is between US$ 6,500 and US$ 7,000. Moreover, Yang Tse Mining Ltd. under the control of Wanbao Company and the UMEHL are jointly cooperating Sabeitaung and Kyaysintaung copper mine projects.
While operating Sabeitaung and Kyaysintaung copper mine projects, the UMHEL had taken over 50 percent shares of No.1 Mining Enterprise with US$ 100 million and Yang Tse Mining Limited also took over 50 percent of Ivanhoe Myanmar Holdings Limited ( IMHL) with US$ 100 million.
Chinese Wanbao Company has been granted five years of tax exemption. Moreover, the company was also given different kinds of tax exemption for its imported heavy machineries including various types of vehicles. The Letpadaungtaung copper mine project is a giant project which can triple to profits compared with that of Sabeitaung and Kyaysintaung copper mine projects.