New mining laws in Myanmar are expected to come into place after November’s national elections, enticing more foreign investment, but rights groups fear local communities could be imperiled without more solid legal protections.
Analysts say Myanmar’s mining industry is still at the “frontier” stage of development with prospects in precious metals as well as copper, tin and tungsten.
John Hancock, an Australian lawyer and consultant in Yangon, said there is plenty of enthusiasm with surveys of valuable deposits dating back to British colonial times.
“I don’t think there’s any doubt in anyone’s mind that Myanmar is what they call ‘highly prospective,’ with all the mineral surveys and work that has been done in past times and seems to indicate that it has a very high level of mineral wealth, a wide range of mineral wealth. And all the geology is very promising," Hancock said.
No legal protection
But companies say Myanmar provides no legal protection for foreign investors, which has led to comparatively little outside investment.
New constitutional amendments could change that by clarifying legal liabilities, allowing smaller companies in Myanmar to enter into joint ventures with foreign enterprises, and giving local states more control over resources.
Some of Myanmar’s most valuable mining resources lie in ethnic minority regions such as Shan and Kachin states, where ongoing fighting has curbed development.
Controversy and protests have dogged projects elsewhere.
Since 2012, the development of a Chinese owned copper mine near Monywa town in central Myanmar has triggered protests and bloodshed by locals angry over confiscated lands and pollution.
Meghna Abraham, a spokesperson for rights group Amnesty International, said the Monywa mine highlights problems across the industry.
“The issues that we are seeing, others were reporting from other mining projects. There still hasn’t been a proper process of consultation with the affected communities," Abraham said.
'Lack of trust'
"This really underlines and is responsible for a lot of the problems there in Monywa. There is a lack of trust in the company and authorities because of the history of what they’ve gone through in terms of all the mining operations," she added.
Wanboa Copper Mining on its corporate website says it recognizes the need for social responsibility, planning and management of resources. But added it plans to enter production at the mine in 2015.
Aung Zaw, editor of The Irrawaddy online newspaper, said Monywa highlights many serious issues in the mining industry.
“You can see that more people are being arrested, activists are put in prison. Interestingly the farmers who have lost land and a lot of activists who are very concerned about the land confiscation, other environmental damage, have been put in prison. It looks quite depressing," Zaw said.
Analysts say Myanmar’s mining industry needs a strong legal framework to regulate companies, clearer standards over land acquisition and compensation as well as labor and environmental protections.