1. M YANMAR I NVESTMENT S EMINAR FOR E NERGY, P OWER & M INERAL R ESOURCES S ECTOR Mining Law Update, Current Situations and Outlook of Mining Sector in Myanmar. 1 Kyaw Thet, Director for Mineral Development Division Department of Mines, Ministry of Mines

2. O UTLINE OF P RESENTATION  Brief Introduction to Mining Sector of Myanmar  Policies and Legislations  Investment Information of Mining Sector  PSC Ratio (Government Vs Investor) 2

3. 3 I NTRODUCTION TO M YANMAR M INING S ECTOR

4. O RGANIZATION C HART OF M INISTRY OF M INES Union Minister Deputy Minister Permanent Secretary DOM Mineral Policy Formulation, Regulator, Royalty collection DGSE Geological, Geotechnical Analytical Labortary ME(1) Lead, Zinc, Silver Copper, Iron, Nickel Coal, Lime Stone, Industrial Minerals ME(2) Gold, Tin, Tungsten, Rare earth, Titanium, Platinum, Gems Enterprise Gems, Jade, Jewellery Pearl Enterprise Pearl 4

5. C URRENT M INERAL P OLICY  Any kind of raw ores are not allowed to export.  Private entrepreneurs are permitted to sell their mineral products freely in the local market and may also export them after mineral processing.  Encouraging to set up mineral processing and refining plants in Myanmar in partnership with local and foreign investors.  Inviting to produce coal and build coal power plants but only for domestic use, not allowed to export.  Gemstone Mining are not allowed to Foreign investors but can invest in Jewellery Making Industry or value added processing.  Foreign investors can buy Jade and Gems in Emporium and also can be exported. 5

6. 6  To offer a balanced approach to development of mineral sector and the environmental conservation.  To minimize the environmental damages and improved livelihood of the local who live near by mining area.  To minimize the mineral losses and be effective production by advanced technologies for mineral resources of state.

7. 7 Sr.CompanyRegistered Country Type of MineralArea ( Acre)Type of Permit 1.Conerstone Resource (Myanmar) Ltd AustraliaZinc Ore1976.8Large Scale Mining Permit 2.Myanmar Ponepipet Co.,Ltd Thailand Tin Concentrate2110Large Scale Mining Permit 3.Myanmar CNMC Nickel Co.,Ltd ChinaFerronickel5082.37Large Scale Mining Permit 4.Simco Song Da Joint Stock Co., VietnamMarble585.72Large Scale Mining Permit 5.Asia Pacific Mining Ltd.ChinaLead, Zinc, Copper, Gold160419Exploration Permit 6.Myanmar Yangtze Copper Co., Ltd. ChinaCopper5841.44Large Scale Mining Permit 7.Myanmar Wanbao Copper Co., Ltd. ChinaCopper7946.36Large Scale Mining Permit 8. Daewoo Precious Resources Co.Ltd KoreaCopper, Gold23968.70 Exploration Permit 9. GPS Joint Venture Co.,LtdChinaLead, Zinc495 Large Scale Mining Permit 10. Sichuan Chuandi ( Myanmar) Mining Co.Ltd China Copper and associated Mineral 6500.3 Exploration and F. S Permits Issued to Foreign Investors

8. Sr.Company Registered Country Type of Mineral Area ( Acre)Type of Permit 11. Royal Light Ron Ann Co., Ltd ChinaIron500 Exploration and F. S 12.Geo Pro Mining Sea LtdRussia Antimony and Associated Minerals 2313 Prospecting, Exploration & F.S 13.Asia Mining LtdAustraliaHeavy Sand13195.14 Feasibility Study 14. Myanmar VES Joint Venture Co., ThailandJewellery Making0.11 Production 15.Myanmar Tasaki Co.,JapanPearl28159.52 Pearl Firm 16.Myanmar Atlantic Co.,AustraliaPearl10501.75 Pearl Firm 17.Myanmar Adman pearlThailandPearl19199.67 Pearl Firm 18.BelpearlS’porePearl7680 Pearl Firm 8 Production =8, Exploration = 6, Pearl = 4

9. 9 Permitted licenses on end of Oct, 2015 Sr.No. State& Region Large Scale Small Scale ExplorationSubsistence Small Scale Processing Feasibility Study Total 1Kachin47286---162 2Kayar11916---36 3Kayin7391617--79 4Chin--7---7 5Sagaing2524543226323 6Tanintharyi183843--3102 7Nay Pyi Taw3-----3 8Bago-31---4 9Magway33728--169 10Mandalay4726864104-3486 11Mon62138-442 12RaKhine1-----1 13Shan(South)161031202-2243 14Shan (North)20565026-4156 15Shan (East)18375--3162 16Ayeyarwaddy34----7 Total1559885521592261882

10. 10 P OLICIES AND L EGISLATION

11. State owned Economic Enterprise Law Foreign Investment Law (2012) Foreign Investment Law (2012) Protection of Wild Life and Wild Plants and Conservation of Natural Areas Law (1994) Myanmar Insurance Law (1993) Myanmar Insurance Law (1993) Environmental Conservation Law (2012) Environmental Conservation Law (2012) Cultural Heritage Law (1998) Myanmar Mining Law (1994) Myanmar Gems Law (1995) Myanmar Pearl Law (1998) 11 Myanmar Mine Safety Law (Upcoming) Myanmar Explosive Law (Upcoming) Mining Laws and Relating Laws

12. 12 Environmental Conservation for Four Main Rivers Notification No. 26/2012 (Dated on 28.3.2012)  Restriction had been done for Prospecting, Exploration and Production for Metal and Gemstone Mining in the stream of Ayeyarwady, Than Lwin, Chin Dwin and Sit Taung Rivers within 100 meter from bank of rivers. Issued Public Notice

13. 13  Adopted Social Responsible Investment (SRI) Policy.  Since 2 nd July, 2014 became a candidate country of EITI.  Trying to become a Compliant Country of EITI.  Adopted Social Responsible Investment (SRI) Policy.  Since 2 nd July, 2014 became a candidate country of EITI.  Trying to become a Compliant Country of EITI. Update Investment Policy on Extractive Industries

14. 14 Investors of Mining Industries in Myanmar shall perform –  Environment Impact Assessment and Social Impact Assessment (ESIA)  Environmental Management Plan (EMP)  Occupational health and safety assessment system (OHSAS)  Funds Deposit to Designated Bank for Mine Closure, Mine Reclamation and CSR activities.  Become a responsible mining projects. Investors of Mining Industries in Myanmar shall perform –  Environment Impact Assessment and Social Impact Assessment (ESIA)  Environmental Management Plan (EMP)  Occupational health and safety assessment system (OHSAS)  Funds Deposit to Designated Bank for Mine Closure, Mine Reclamation and CSR activities.  Become a responsible mining projects. Update Investment Policy on Mining Industries

15. 15  Amending the existing Myanmar Mines Law and Regulations with the technical assistance of AusAids, World Bank and individual experts.  Targeting to create the Win-Win situation between the investor and the State.  Upcoming Myanmar Mining Law and Related Laws are almost ready for Foreign Investor.  Amending the existing Myanmar Mines Law and Regulations with the technical assistance of AusAids, World Bank and individual experts.  Targeting to create the Win-Win situation between the investor and the State.  Upcoming Myanmar Mining Law and Related Laws are almost ready for Foreign Investor. Amending the Existing Laws and Related Regulations

16. 16  Myanmar Mines Law was drafted for amending with the advice of experts, publics and technical assistance of AusAID, World Bank, the comments from the investors of Myanmar’s Mining Industries and experts who have internationally experiences.  Upcoming Mining Law and Related regulation concern the environmental conservation, socio-economic of the locals and creating the Win-Win situation between the investors and the State. Amending the Existing Laws and Related Regulations

17. 17  The draft of the Myanmar Mines Law is already discussed at Parliaments.  Also the Myanmar Mines Rules is drafted and almost finish to enacted within the 90 days after the approval for the Myanmar Mines Law from the Parliament.  The Myanmar Mines Law and Rules are ready for you soon. Upcoming Myanmar Mines Law and Rules

18. U PCOMING M YANMAR M INES R ULE DescriptionExisting Mining permitFuture Mining Permit Mineral Prospecting Permit  A period not exceeding 1 year.  Extension period not exceeding 12 months. Unchange Mineral Exploration Permit and Feasibility Study  A period not exceeding 3 years.  Extension permit one year at a time.  Extension may normally be two occasion only. Unchange

19. DescriptionExisting Mining permitFuture Mining Permit Large Scale Mineral Production Permit  A period not exceeding 25 years shall be permitted.  However, if the estimated life of the ore deposit proposed to be mined is less than 25 years only such period shall be determined.  The land area is depend on investment amount and ore deposit.  Extension period not exceeding 5 years at a time. ( may get 3 times to extend )  The concession period and extension for mining permit will be set by the MIC’s notification.  The land area is depend on ore deposit. Medium Scale Mineral Production Permit  Not Include.  Not more than 10 Year.  Extension period not exceeding one year on four occasions. Small Scale Mineral Production Permit  A period not more than 5 years.  Extension period not exceeding one year on four occasions.  Unchange U PCOMING M YANMAR M INES R ULE (C ONTINUED )

20. DescriptionExisting Mining permit (Time and Area) Future Mining Permit (Time and Area) Artisanal mineral Production Permit  A period not exceeding 1 year.  The land area not exceed 3 Acre.  Unchange Integrated Permit  Mineral Prospecting, Mineral Exploration and Large Scale Mineral Production or Small Scale Mineral Production Permit.  Unchange Mineral Trading Permit  Not Include.  In detail after getting the approval(including Transporting, Storage and Trading for produced Minerals ) Mineral Processing Permit  Not Include  In detail after getting the approval. U PCOMING M YANMAR M INES R ULE (C ONTINUED )

21. 21 Investment Information

22. 22 Foreign Investment Law (FIL) (2 nd November, 2012) Foreign Investment Rules (31 st January, 2013) Foreign Investment Law (FIL) (2 nd November, 2012) Foreign Investment Rules (31 st January, 2013) Efficiency Transparency Environment Efficiency Transparency Environment Based on Allowing Employment of Expatriates Land Lease Guarantee Incentives & Exemptions Employment of Expatriates Land Lease Guarantee Incentives & Exemptions Advantages of New Foreign Investment Law

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24. 24 Letter of Courtesy Call Officials discuss on mineral commodity Site visit Submit Proposal Procedures of Foreign Investment

25. 25  Company Registration in Myanmar  Company Profiles and Other Relevant fact of company  Recommendation and endorsement of the respective embassy  List of Board of Directors  Bank Statement  Initial Work Program  Map of Proposed Area with Respective Coordinate  EIA, SIA, HIA Plan 6. After getting the approval of the Ministry of Mines and the completion of all the require recommendation documents, the proposal and the Agreement Draft will send to the Myanmar Investment Commission ( MIC ) for Investment permit. 5. The Proposal must include …..

26. 26 © dreamstime PSC Ratio (Government Vs Investor)

27. 27 State 30 (or) 35 Investor 70 (or) 65 Local Investor PSC Ratio for the local investor could not negotiate because of low investment amount and using the ordinary mining technique. Foreign Investor Negotiable PSC Ratio for the Foreign investor can negotiate based on the following;  Investment amount  Type of mineral  Ore reserve  Cost of Production PSC Ratio (Government Vs Investor)

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29. S r. Type of Minerals Prospecting period Exploration Period 1 st Yr2 nd Yr1 st Yr2 nd Yr3 rd Yr4 th Yr5 th Yr 1 Industrial Mineral (or) Stone 50,000100,000 200,000400,000600,000800,000 2 Metallic Mineral 100,000200,000 400,000800,0001,200,0001,600,000 3 Precious Metallic Mineral 200,000400,000 800,0001,60,0002,400,0003,200,000 29 Remark ; 1. Extension Period subject to the approval of the Ministry or the Department 2. Exchange rate subject to daily exchange rate.

30. Sr. Type of Minerals Feasibility Study period Developing Period Producti on Period 1 st Yr2 nd Yr1 st Yr2 nd Yr3 rd Yr1-20 Yrs 1 Industrial Mineral (or) Stone 800,0001,200,0001,400,0001,600,0002,000,000 2 Metallic Mineral 1,600,000 1,800,0002,100,0002,400,0003,000,000 3 Precious Metallic Mineral 3,200,000 3,600,0004,200,0004,800,0006,000,000 30 Remark ; 1. Extension Period subject to the approval of the Ministry or the Department 2. Exchange rate subject to daily exchange rate.

31. According to Myanmar Mines Law,  For Metallic Minerals - 3 to 4 %  For Precious Metallic Minerals - 4 to 5 %  For Industrial Minerals - 1 to 3%  For Ruby, Sapphire, Jade and Diamond - 20%  For other Gems - 10 %  Royalty is levied on value of mineral sold.  It is a sale based royalty and not a production based royalty. 31 Royalty

32. Promote the utilization of Myanmar valuable mineral resources for the production to refined products through the contribution of foreign investment with advanced technologies. 32 © Lorn Pearson Trains Expectation

33. 33 Production Figures of Myanmar

34. MINERAL RESOURCES OF MYANMAR 34

35. General CategoryMinerals Very richJade, Ruby, Sapphire, Limestone RichCopper, Lead, Zinc, Tin, Tungsten, Gold, Coal, Barite Fairly richAntimony, Silver, Nickel, Gypsum, Iron, Manganese, Poor Chromite, PGM Minerals, Radioactive Minerals, Diamond, Fertilizer Minerals, Fluorite, Bauxite, Mercury, Kaolin, Feldspar, Quartz, Bentonite, Mica REE, -Myanmar at present can be categorized as four major richness on the status of mineral resources.

36. Sr. Mineral Commodity Occurrence s Deposit s Total Tonnage ( Million Tons) Remarks P-2P-3P-4Total 1Columbite Tantalite 3250.00003-0.0036 2Coal203292495229.58140.73121.53491.84 3Gemstones5612681.070.110.071.25 4Copper88271151308.55688.520.191997.3 5Feldspar321240.0050.860.00020.865 6Antimony74581320.180.560.261.0 7Chromite2320430.020.040.020.08 8Lead16312829113.2812.6718.1444.09 9Graphite2114350.0390.0042.582.62

37. 37 Sr. Mineral Commodity OccurrencesDepositsTotal Tonnage ( Million Tons) Remarks P-2P-3P-4Total 10Tin –Tungsten1253584830.36 0.08 38.74 0.05 0.29 0.01 39.39 0.14 Ore Concen trate 11Gypsum13243723.1812.810.00735.99 13Zircon sand-11 -31.460.3831.48 13Limestone304224523095.15982.449740.558818 14Dolomite17244122.167.417.7337 15Nickel410147080.6612.2162.86 16Fluorite13619-0.0020.0040.006 17Phosphate rock125170.7810.020.0810.88 18Baryte1953720.111.360.231.70

38. Sr. Mineral Commodity Occurrenc es DepositsTotal Tonnage (Million Tons) Remarks P-2P-3P-4Total 19Bauxite8182612.75261.990.16274.9 20Porzolan-66-651- 21Molybdenum16319-0.0190.0060.025 22Manganese2131522.92.665.3410.9 23Kaolin364673.4010.45733.1136.97 24Bentonite22022-22.062.0424.1 25Glass Sand4353983.1619.8628.12131.14 26Gold2469534115.29 4.92 47.66 341.94 3.16 893.28 66.11 1240.2 Primary Alluvial (Cu..Yd.) 27Platinum145194.21.3726.9532.52 28Mica26430-0.0036- 29Quartz212647436.0443.0183.05 30Iron194199393332.9261.53101.44495.42 31Zinc1811295.2114.410.3319.95 32Heavy Mineral10414-0.0070.0190.026 33Decorative Stone 62319373544496650452924

39. Kyaw Thet, Mr Director Department of Mines Ministry of Mines Office Building No. ( 19 ), Nay Pyi Taw, Myanmar. Tel : +95-67-409378 Fax: +95-67-409376 E-mail :kthet2011@gmail.com 39 Contact Information

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