Myanmar's State Mining Enterprise-1 on Wednesday signed an amendment to the production sharing contract for the Lepadaungtaung copper mine project with Myanmar Economic Holding Ltd (MEHL) and China's Wanbao Mining Ltd in Nay Pyi Taw.
Attending the signing ceremony were Myanmar Minister at the President's Office U Hla Tun, Minister of Mines U Myint Aung, MEHL Chairman Lieutenant-General Khin Zaw Oo. and President of Wanbao Mining Ltd Chen Defeng.
A press release quoted the terms of agreement as saying that the government of Myanmar will now enjoy 51 percent of the benefit, making the people of Myanmar majority beneficiaries, while Wanbao and its business partner MEHL will retain 49 percent.
The amendment legally sets that 2 percent of net profits goes towards corporate social responsibility with a focus on immediate communities.
The contract safeguards environmental stewardship with Wanbao paying 2 million U.S. dollars per annum throughout the commercial production period of the project into a dedicated account to ensure international standards of environmental protection, the release said.
Wanbao views the milestone agreement as "heralding a new dawn in the relationship between mining companies and their host countries".
Letpadaungtaung copper mine project is situated in Monywa, Myanmar's northwestern Sagaing region.
The project has been undertaken by the Myanmar Economic Holding Ltd and the Wanbao Mining Ltd under the approval of the Ministry of Mines in March 2010 after a Canadian company, the Ivanhoe, pulled out two years ago.
The then profit sharing of Latpadaungtaung copper mining project was such that Myanmar government 16.8 percent, Myanmar Economic Holding Ltd 13.8 percent and fully invested Chinese company 13.33 percent after deducting production cost of 56 percent. The profit ratio between Myanmar side and the Chinese investor was 2:1.
Since February 2012, demonstrations had been taking place intermittently against the continued implementation of the project and the protest escalated in November that year.
Following the incident, Myanmar government appointed a probe panel, led by opposition leader and parliamentarian Aung San Suu Kyi to investigate into the controversial project and the final report of the panel to the president was released on March 12 proposing that the project should go on as the best choice for the economic benefit of the nation and the people especially for the full benefit of the future generation, while amending the weak points as pointed out in the report in consideration of various angles of economic, social and environmental impacts as well as international relations.
On the same day, the government appointed a special committee, led by Minister at the President's Office U Hla Tun, to implement the report of the probe panel and compensation for land of local farmers and relocation of them.
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