Project ID: 34115

China Eximbank and CDB extend loans for Tagaung Taung Nickel Mine Project

Summary

Funding agency [Type]

China Development Bank (CDB) [State-owned Policy Bank]; Export-Import Bank of China [State-owned Policy Bank]

Recipient

Myanmar

Sector

Industry, mining, construction (Code: 320)

Flow type

Loan

Concessional

Vague

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

Estimated.

2007

Implementation

2009

2009-05-17

Actual start

Completion

2011

2011-06-01

Actual

Geography

Description

On July 28, 2008, China Nonferrous Metal Mining & Construction signed a production sharing contract with Myanmar’s Ministry of Mines No. 3 Mining Enterprise for the Tagaung Taung Nickel Mine. China Nonferrous Metal Mining Group and Taiyuan Iron and Steel Group created a joint venture in order to implement the Tagaung Taung Nickel Mine Project. The total cost of the project was more than USD $870 million and it reportedly secured debt financing from China Eximbank and China Development Bank, although the financing details are unclear (See: '《中国有色金属报》:达贡山镍矿上绽放的“胞波情谊” ). Previously in June 2007, the nickel mining project was approved by the government and reportedly secured the commitment of financial support from China Development Bank and China Eximbank (See: 'China National Nonferrous Metals Group's Myanmar Nickel Mine starts construction this year'). Project construction was expected to begin later in 2007. The Chinese project title is 达贡山镍矿 or 缅甸达贡山镍矿项目. The purpose of the project was to develop a nickel mine within Tigyaing Township, Katha District, Sagaing Region (exact locational coordinates are 23.578243, 96.152611). The mine has a reserve of more than 30 million tons of high-grade nickel ore containing some 700,000 tons of nickel. The average nickel content of the mine is 2%, which is likely to yield 800,000 metric tons (annual output of 85,000 tons) of ferro-nickel. On May 17, 2009, a formal groundbreaking ceremony took place. The mine was completed in June 2011. It reportedly employs more than 1,500 workers, both Myanmar and Chinese nationals.The project has faced various controversies and disputes. According to a Myanmar Times report in 2016, a contract that China’s CNMC Nickel Company Ltd. (CNICO) signed in 2007 called for the seizure of more than 3,000 acres (1,200 hectares) of land and the payment of 50,000 kyats (U.S. $32) an acre in lost crop compensation for 122 farmers in five communities comprising the Maung Kone village tract. Maung Kone residents later reported that the compensation they received failed to take into account the contamination of their fields and the nearby Irrawaddy River by the plant’s solid waste runoff, and they demanded additional payment. The 500 acres of land on which the plant’s operators dumped coal waste were nearly full, villagers said, so that when it rains, the runoff flowed directly into the waterway and nearby cultivated fields. Residents of Maung Kone village, which sits between the nickel-mining operations and a sugar-processing plant, also said that polluted air and solid waste from both operations affected their health, and they accused both plants of discharging wastewater directly into the Irrawaddy River. When residents went to the village tract health department to discuss the situation, the medical officer in charge reportedly said he could not answer their questions because he did not have permission from his superiors. According to the Myanmar Alliance of Transparency and Accountability, the July 28, 2008 production sharing contract has also proven controversial because it provides for the Government of Myanmar to receive only 1 percent of revenue, and the Chinese company 99 percent, when the price of nickel falls below $15,000 a ton. The ratio is adjusted to 50:50 when the price of nickel is between $15,000 and $20,000 a tone.

Additional details

Taiyuan Iron and Steel Group is China’s leading producer of stainless steel projects that depends on nickel alloys.

Number of official sources

9

Number of unofficial sources

13

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Details

Cofinanced

No

Receiving agencies [Type]

Ministry of Mines (Myanmar) [Government Agency]

Implementing agencies [Type]

China Nonferrous Metal Mining (Group) Co., Ltd. (CNMC) [State-owned Company]; Taiyuan Iron and Steel (Group) Co., Ltd. (TISCO) [State-owned Company]

Loan type

No Information

Gurarantee provided

No

Insurance provided

No