Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A long-awaited draft amendment passed at the end of 2015 allows foreign firms to form joint ventures with small- and medium-scale mining firms to expand a project and extends tenure permits for large-scale projects to 50 years.
It also guarantees firms that conduct exploration according to the rules a mining permit, removing some of the uncertainty about how straightforward this would be for companies that had already spent capital on exploration work.
All of these are positive steps for foreign firms eyeing the Myanmar mining sector. But the key development is the potential for the government and foreign firms to form profit-sharing or equity participation agreements, according to Yangon-based mining services firm Valentis Resources, which thinks this could “vastly alter the economics” of the mining sector.
