Myanmars government could work with Australian
officials to establish a mining regulatory regime that closely
mirrors the Australian system, IFLR can reveal.
The move would see the Myanmar bodies work with Australian
authorities to align local mining laws, contractual commercial
terms and processes, such as the concession registration
system, more closely with international standards.
One senior official at the Myanmar Investment Commission
(MIC), the body working on the changes, told IFLR
discussions had taken place in January with the former
Australian foreign minister Kevin Rudd.
Rudd had urged him to study Australias mining
practices and consider the possibility of Australia assisting
He told me the EU had asked Australia to keep an eye
on Myanmar on the EUs behalf, to work with us closely and
generally advise us where possible, he said.
For that reason he was very interested in establishing
a mining sector scholarship programme within Myanmar, and
helping us with education, health sector and heritage
Rudds departure from office in February the talks had
stalled, he said. But he was confident progress would be made
sanctions on Myanmar would be eased together with the EU
and US embargoes on involvement in the country.
Because of the success of these
by-elections, things will change fast, he said.
Click here and here for exclusive IFLR
video footage of Aung San Suu Kyi inspecting polling
stations in her constituency on the morning of Myanmar's
Market participants in Myanmars oil and gas sector have
been working to resume discussions amid growing frustration
with the much-criticised regulatory regime governing
the local mining sector.
While Australian sanctions on investment in the country
remain, it is likely Australia will assist in building an
improved legislative landscape under a national aid
organisation such as the Australia Mining for Development
Initiative much like they have previously done in Laos, and in
Papua New Guinea.
One source close to the matter said the Australian
government was keen to provide Myanmar with an aid surface to
help them in implementing the business of mining. But
everything is on the table for now, he said.
He branded Myanmars mining regulations as a total mess
and deliberately dysfunctional both in terms of the laws in
place and how they were implemented.
Mining laws here are primarily focused on gem mining
and designed so that the relevant ministers can profit from the
lucrative jade and gold trade, he said.
The sectors fiscal regime and production sharing
criteria is also draconian and designed more for the oil and
gas sector, he said. This results in un-commercial
headline terms when related to mining investment.
The mining department is bureaucratically opaque too,
according to the source. Processes such as the concession
register are very outdated, he said. In most other
jurisdictions, it is possible to see in real-time what
investment opportunities are available via online
registration, he said. This is not the case in
Much will also depend on the Myanmar federal budget that is
produced. This will collate 40 years of information for the
first time. It should help to demonstrate how much
revenue could be brought in through mining investment and
ensure revisions to market regulation moves further up the
reform agenda, he said.;
The Australian regime is successful, he said.
Myanmar would benefit from the involvement of an
international yet regional government that has the capacity and
willingness to come in and support the building of a new
Another market participant added that a more transparent
system would benefit the local population in attracting more
players to the market and better balancing the influence of
Chinese investors in the sector.
Chinese investors have been very aggressive here and
local market participants have been getting ripped off,
he said. The government needs to balance investment in
the sector and try to introduce systems that are actually
There is massive investment potential here, if an
efficient regulatory framework is put in place, he
The Australian and Canadian regulatory regimes are the
template for most mining acts around the world, and mining
companies are used to doing business based on those regimes,
and the level of predictability that they provide.
The only department in Myanmar that has a proper
western level of predictability, and which operates a
professional and commercial regulatory regime is the oil and
gas ministry, he said. Investments there are well
structured and open. Mining investment in contrast is one of
those black areas that is really behind.
There is no doubt all that has been happening in
Myanmar recently is very positive, he said. But
investment in the country is still very risky in parts and
first mover advantage can turn into first mover disaster if you
are not careful.