The military-owned conglomerate has been granted mining rights over an area of more than 460 acres until 2031
The military-owned Myanmar Economic Holdings Ltd (MEHL) has received extensive mining rights in Mandalay region’s Thabeikkyin township, official records show.
According to the official website of the Department of Mines, MEHL was granted a license to mine 25 blocks in Thabeikkyin’s Ohnzone gold-mining region in 2020.
Twenty of the blocks are 20 acres each, and together with five smaller sites, the total area covered by the concession is 464.7 acres.
The license went into effect in mid-2020 and is valid until 2031.
The mine was listed as a medium-scale operation, although according to Myanmar’s Mines Law, this designation would normally limit it to an area of between four and 247 acres.
“Why isn’t a mine of this size listed as a large-scale operation? The policies are questionable,” said Moe Moe Tun, director of the Yangon-based group Citizens Action for Transparency.
Another notable feature of the concession is that 22 of the 25 blocks are adjacent to each other, which would not have been permitted in the past.
However, article 76 of the 2018 Myanmar Mining Law allows companies to mine areas of land that are contiguous or in close proximity if doing so is deemed to be beneficial to the country.
Kyaw Thet, the deputy director general of the Department of Mines, told Myanmar Now that the size of the concession was determined by practical considerations.
“We would prefer a large-scale operation. But I think the amount of land they took was based on the nature of the work on the ground. The area we grant depends on how much the companies are requesting,” he said.
He added that permits are granted only if a request is confirmed by the Ministry of Natural Resources and Environmental Conservation and presented with an environmental management plan.
According to local sources, MEHL leases most of its mining concessions to private operators.
Small-scale gold production is not subject to ministry inspections, but the No.2 Mining Enterprise appoints township-level officials to oversee the use of dangerous materials such as gunpowder, cyanide and mercury.
Hla Myo, the general manager of MEHL, told Myanmar Now that the conglomerate is not directly involved in mining gold.
“There is no gold mining. The permit is probably granted to a subsidiary. If the head office is in charge of this, there’s no way I wouldn’t know,” he said on January 7.
According to its website, MEHL’s commerce department is engaged in the mining of gold, gems, tin and gypsum.
Mandalay’s gold output in the fiscal year that ended last March was 1,681 troy ounces, according to official figures. The current price of gold is roughly $1,900 per ounce.
Union of Myanmar Economic Holdings Ltd (UMEHL) was formed by Myanmar’s former military government in 1990 to enable it to dominate a large swath of the country’s economy.
Its exports include jade, rubies, and precious metals and its imports include petroleum to supply its Myawaddy petrol stations. Its subsidiaries also have interests in transport, mining, alcohol, cigarettes and more. Shares are held by retired and active military personnel.
In the past, shareholders were divided into two groups. Type A shares were for the Defence Ministry and type B for individual military units and organisations run by retired officers and servicemen.
After the National League for Democracy came to power in April 2016, UMEHL privatised itself and dropped the “Union” from its name.
Before the change, the type A shares were converted to type B ones, meaning the company’s profits would no longer go into the national budget, except via taxes.
From 2009 to 2012, many state-owned buildings and businesses were privatised. These included the Bo Aung Kyaw port terminal and the Myanma Five Star Line, which was bought by MEHL.
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