USGS releases first study to assess global earthquake risk to mineral supplies
Earthquakes have the potential to substantially affect mining operations, leading to supply chain disruptions that adversely affect the global economy.
Chinese companies are seeking the wealth of mining opportunities that neighbouring Myanmar (ex-Burma) has to offer, as the country opens its economy to foreign investment after more than half a century of military ruling.
Although undeveloped, the South Asian country is home for vast and untouched reserves of highly demanded minerals and metals, such as gold, tungsten, copper and even some oil. It is also known by its precious stones and lithium reserves.
Another advantage of the still impoverished country is to be conveniently located between China and India, which are international economic growth’s engines and hungry consumers of raw materials.
According to Financial Times analysts (subs. required), this is why firms such as Hong-Kong-listed mining group China Polymetallic Mining (CPM), have started setting foot in the minerals-rich country.
Oil giants Total and Chevron are already in the country, and other multinationals such as Coca-Cola, Pepsi and General Electric have announced plans to re-enter the market.
CPM in particular is eager to dominate the Yunnan’s market, province that lies along China’s border with Myanmar. But FT warns CPM and other small to medium companies to hurry if they want to get ahead of the game, since larger international and Chinese resource firms are also looking at settling in.
“Yunnan is close to Myanmar, which has similar mining formations to Yunnan. Also our employees share their culture and living style with people in Myanmar… So we think it’s relatively easy for us to take our operational model into those countries. We have looked at projects to consider doing investments but we have not done due diligence on any,” told FT the CEO of CPM, Li Tao.
According to a recent study published by Global Data, industrial growth in Myanmar could potentially benefit every strata of society, promoting employment opportunities and economic development. However, the paper also says this will require the country to adopt holistic development policies in order to compete with other middle-income Asian nations.
Oil and Gas
The same study indicates that Myanmar holds proven oil and gas reserves of 2.1 billion barrels (bbl) and 25 trillion cubic feet (tcf) respectively as of April 2011, with the country’s energy ministry estimating domestic shale oil reserves to be around 3.3 million barrels (MMbbl).
Foreign direct investment (FDI) in Myanmar’s oil and gas industry stood at about $13.8 billion for 2011–2012, representing almost 31% of the country’s GDP.
The country, however, needs to become a more investor-friendly destination and develop industry-wide regulations, since harmful mining practices have been observed at gold mines in the states of Kachin and Karen, as well as in copper mines in Northern Myanmar, says Global Data’s report.
The country also lacks of ports, roads and railways to boost both mining production and its exporting potential.
Despite these factors, experts believe the absence of multinational mining firms active in Myanmar makes it an ideal playground for small-scale miners.
Other than China, only India and South Korea from the major economies have invested in the country so far. A situation that, judging by the enthusiastic reports on Myanmar’s mining outlook is about to change.
Image Tibetan pilgrim circles the holy Jokhang monastery, by Hung Chung Chih / Shutterstock.com
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