Myanmar working on new laws to overhaul opaque mining sector

Myanmar's mining sector is however, notorious for accidents, lawlessness and corruption

Foreign firms eying mining opportunities in Myanmar will be benefited by a bevy of new laws and amendments under the anvil at the country's parliament.

The draft amendment passed at the end of the last year will "vastly alter the economics" of the mining sector, Myanmar Times reported citing experts.

The key feature of the new law is the potential for the government and foreign firms to form profit-sharing or equity participation agreements, the report said.

Earlier, foreign miners could only reach a production-sharing contract with the government, specifying a minimum quantity of output to be delivered on top of royalties.

"The new clause that allows for production sharing, profit sharing or equity participation is why we think the economics of mining projects will change," Lachlan Foy, head of commercial affairs at Valentis Resources, told the daily.

"The interpretation of that clause will make or break the industry for foreign investors."

Myanmar's mining sector could witness higher growth if it adopts the equity-sharing agreements in the sector, which is a norm in most emerging markets, according to experts.

The draft amendment was approved by the parliament at the end of December after more than three years of discussions. An amendment becomes law 90 days after it is approved. The parliament is working on regulatory clauses that will accompany the new law.

Myanmar has abundant natural resources ranging from gold and rubies to jade, coal, copper, tin and tungsten. The impoverished country also has rich natural resources including oil, timber and precious metals.

Myanmar's mining sector is however, notorious for accidents, lawlessness and corruption. Scores die in accidents in Myanmar's jade mines, highlighting the lax safety rules in the country.

The US has put in place a ban on Myanmar jade over concerns that jade mining benefits military figures and fuels corruption and rights violations, Reuters reported.

The country has the world's richest deposits of jade.

In November, a massive landslide in a jade mining area killed 114 people in the northern Kachin State.