China Eximbank provides loan for the Letpadaung Copper Mine Project

According to the the State Council Information Office of China, in 2010, China Eximbank provided a loan to support the implementation of the Letpadaung Copper Mine Project. The face value and borrowing terms are this loan are unknown. The purpose of this $1.065 billion project was to construct a mine — with the capacity to produce 100,000 tons of cathode copper per year — in Salingyi Township, Monywa City, and Sagaing Province. The project produced more than 60,000 tons of cathode copper in 2017 and generated more than $14 million in revenue for the Government of Myanmar. The Letpadaung Copper Mine Project is a large mine project operated by Myanmar Wanbao Mining Copper Limited (MWMCL), a subsidiary of Wanbao Mining Limited that was created in September 2011. Wanbao Mining Limited, a subsidiary of China North Industries Group Corp. (Norinco), a large arms manufacturer, bought the project from Ivanhoe, a Canadian mining company in 2011. It did so in cooperation with the Union of Myanmar Economic Holdings Ltd (UMEHL), which was granted a large scale production permit for the Letpadaung Copper Mine Project on March 5, 2010. Ivanhoe had won the initial project from the Government of Myanmar pursuant to a series of agreements and feasibility studies from 1994 to 1996. A joint venture agreement was signed on April 10, 1996, but Ivanhoe divested its share of the project in 2011, citing the impact of the negative stigma of working with the military government on its other business throughout the world. The project commenced under MWMCL ownership with Norinco International Cooperation Limited serving as the EPC contractor. Work began on November 20, 2011 and officially ended on March 11, 2016. On March 20, 2012, the foundation laying ceremony for the project was held. Shortly after mine construction began in 2012, local villagers protested, raising concerns about environmental damage, land confiscation, involuntary resettlement, and various health risks associated with the mine. The authorities in Myanmar responded by brutally suppressing protesters, which in turn led to the creation of an investigative commission (led by Daw Aung San Suu Kyi) and the eventual renegotiation of a production sharing contract between MWMCL, the Government of Myanmar, and Myanmar Economic Holdings Ltd (UMEHL) in 2013. The final, revised contract (signed on July 24, 2013) reduced the ownership stake of MWMCL from 45% to 30%, while the ownership stake of the Government of Myanmar increased from 4% to 51%. The renegotiated contract also required that 2% of net profits be earmarked for reinvestment in the local community (via corporate social responsibility projects).

Additional details

1. This project is also known as the Letpadaung Taung Copper Project. The Chinese project title is 莱比塘铜矿 or 缅甸莱比塘铜矿. The Burmese project title is လက်ပံတောင်းကြေးနီမိုင်. 2. The face value of the loan is unknown. For the time being, AidData assumes that the $1.065 billion project was financed according to a debt-to-equity ratio of 70:30. This issue warrants further investigation.

Number of official sources

9

Number of total sources

14