Gem Mining and Sustainability in Myanmar DR KYAW THU MACLE GEM - PowerPoint PPT Presentation

Myanmar Gems Forum 2019 Gem Mining and Sustainability in Myanmar DR KYAW THU MACLE GEM TRADE LABORATORY LOTTE HOTEL, 10 th January, 2019 1

Sustainability Sustainability is the process of maintaining change in a balance environment, in which the exploitation of resources, the direction of investments, the orientation of technological development and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations. (Wikipedia) Mogok, 1927 (London Graphic, Feb. 4, 1888) Mogok, 2015 2

Outlines  Introduction  History of gem mining in Myanmar  Gem mining legislations  Environmental legislations  Sustainable gem mining in Myanmar  Conclusion Kyaw Thu, Khin Zaw, 2017, Gem deposits of Myanmar, Chapter 23. In: Barber, A. J., Khin Zaw, Crow, M. J. (eds) Myanmar: Geology, Resources and Tectonics. Geological Society, London, Memoirs, 48, 497–529, https://doi.org/10.1144/M48.23. 3

Introduction Estimated global rough gemstones sales, 2015 Other Coloured Gemstones USD 250-750 MILLION Emerald, Ruby, Sapphire USD 1.5-2.5 BILLION Diamond USD 12-14 BILLION Jade USD 3-6 BILLION 4

Introduction - Myanmar’s main gem-producing areas are Amber Deposit geographically located along the North- Jadeite Deposit eastern mountainous regions, with jadeite Momeik deposits almost exclusively in Kachin state as well as Sagaing, and other gemstones in Shan, Mandalay, Kachin, Kayin and Tanintharyi. Mong Hsu - Many of the known gemstone tracts are in, or bordering, conflict zones. - The major gemstone deposits in Myanmar include: - the large jadeite areas in Hpakant (Kachin State) and Hkamti (Sagaing). - the Mogok Stone Tract (Mandalay Division) Diamond Deposit famous for its ruby and sapphire deposits. Sunrise ruby, Mogok (25.59 ct.) sold for a world record $ 30.42 million at Sotheby’s auction in Geneva, 2015. 5

History of Gem Mining in Myanmar  Pre-colonial days  Colonial days (1885-1947)  Post Independence Era (1948 – 1962)  First Military Socialist Government (1962 – 1988)  Second Military Government (1988 – 2010)  New Myanmar Government (2010 – 2015)  NLD Government ( 2016 – present day) 6

History of Gem Mining in Myanmar 1885-1947 13 th – 14 th Centuries 18 th Century (Under controlled by (Chinese Emperors, Well established - British colonial Burmese Kings, Shan until World War II traders) Warlords ) 1962-1988 1948-1962 1988-2010 Military Socialist Gov. Military Gov. (Post Independence (1969) banned private Gemstone law 1995 Era ) exploration & mining JV mines/private Native mining & of gem gem mines trading under license 2010-2015 New Gov. 2016 - at present 2016 amendments NLD Gov. to 1995 Gemstone Gemstone law law (2018) JV mines/private 7 gem mines

Gem Mining Legislations 1.The Burma Ruby Regulations 1887 2.The Burma metalliferous Mines Manual 1937 3.The Burma Mineral Concession Directions 1947 4.Union of Burma Mines and Minerals Act 1961 5.The Myanmar Mines Law 1994 6.The Myanmar Mines Rules 1996 7.The Myanmar Gemstone Law 1995 8.The Myanmar Gemstone Rules 1995 9. The Myanmar Pearl Law (1995) & amended (2014) 10.The Myanmar Mines Law amended 2015 11.The Myanmar Gemstone Law (first amended 2013) 12.The Myanmar Gemstone Law (second amended 2016) 13.The Myanmar Mines Rules 2018 8 14.The Myanmar Gemstone Law 2018 (Passed by Pyidaungsu Hluttaw)

Gem Mining Legislations 9

Gem Mining Legislations Issuing Number Allows Pre 2016 Gemstone Law Post 2016 Gemstone Law Authority (as at April amendments amendments 2016) Gemstone MGE 21,392 Exploration, Designated blocks: Large Scale: • • Production (under permits production, 1 acre blocks designated by JV 25% govt/75% company The 2 nd amendments Permit Ministry of trading, • MONREC Competitive tender – awarded to • 98% • Mines) processing, • Up to 50 blocks per company highest bidder private jewellery • • Competitive tender – awarded Up to 50 acres per permit companies manufacture, • to the Myanmar Gemstone Law to highest bidder Commercial scale production – • 2% JVs • retail, export 3 years tenure technology and machinery may be with MGE and foreign • Re-tender required for renewal used • 1,475 (23/2016) were passed by the sales • 10 years tenure companies in total Discovered blocks: Medium Scale: Pyidaungsu Hluttaw on 29 • • 1 acre blocks ‘discovered’ by JV 25% govt/75% company • applicant Competitive tender – awarded to January 2016. • Application highest bidder • • 3 years tenure Up to 50 acres per permit • The 1 st amendments were Moderately commercial scale production – technology and • machinery may be used • 5 years tenure made in 2003 and were minimal. JV partnerships (not in law): Small Scale: • • 40% govt/60% company Application to MONREC (MGE) The 2 nd amendments • from ‘businesses that do not need Application – ‘first come first • served’ much capital’ evaluated and • issued by relevant State and 5 years tenure (2016) changed and update • Division level Scrutinising and Up to 160 acres Permit Body • A fair amount of production, approximately 75% of the 1995 technology and machinery may be used • 3 years tenure Law. Very Small Scale / Subsistence: • Not allow foreign investment Application to MONREC (MGE), evaluated and issued by State and The Myanmar Gemstone Law • Division level Scrutinising and in gem exploration and mining sector. Permit Body • (2018) were passed by the Manual operated equipment and low horsepower machinery only • 1 year tenure Pyidaungsu Hluttaw on Gemstone MGE 2,000 Pre 2016 law amendments: Post 2016 law amendments: Trading (under • • License Ministry of Allowed trading and retail in MMK and Additionally allows processing, December 2018. Mines) foreign currency jewellery manufacture, retail and • export of both rough and finished 1 year duration stones and jewellery products in 10 MMK and foreign currency • 3 years duration

Gem Mining Legislations Source: MEITI, 2016 According to permit data provided by MGE, there were 21,392 active gem production • permits as at March 2016. Of these, 98% were privately held and 2% were JVs with MGE. This means that 2% of all • gemstone production permits are being ‘monitored’ by government. No new concessions will be granted in 2016 until the by-laws, rules and regulations to the • Gemstone Law (2018) have been passed and approved. 11

Gem Mining Legislations Number of Companies with Number of Companies by Types of Gemstone Permits: April 2016 Permit: April 2016 Private Jade (935) 1% 17% 16% Private Private Coloured (1223) Stones (288) 20% 63% 83% JV (252) JV Jade (232) JV Coloured Stones (20) Total-1475 Source: MEITI, 2018 11,808 permits will be expiring or up for renewal during 2016. • This presents an opportunity for government to review and revise the terms of any new • contracts issued. New issue: illegal mining come out in Mogok and Jade mines areas. 12 •

Ye ma say Illegal mines photo: NRGI Kha ne say 13

Gem Mining Legislations Production Gems and Jade in 2015-2016 The value of gems and jade is on the basis of the valuation made by the valuation committees. 14 This value is used for the determination of the royalties on production.

Environmental Legislations 1. National Commission for Environmental Affairs NCEA (1990) 2. National Environmental Policy 1994 3. Myanmar’s Agenda 21/ 1997 4. National Sustainable Development Strategy NSDS (2009) 5. Environmental Performance Assessment (2008, 2010) 6. Ministry of Environmental Conservation and Forestry MOECAF (2011) 7. National Environmental Conservation Committee NECC was formed in place of NCEA in (2011) 8. Myanmar Environmental Conservation Law (2012) 9. Myanmar Environmental Conservation Rules (2014) 10. Environmental Conservation Department ECD (2012) 11. Environmental Quality Guidelines (2015) 12. EIA Procedures (2015) 15

Environmental Legislations Environmental and social impacts Phases of a Gem Mining Project Production Permit Construction of access roads Site preparation and clearing Active mining Reworking of inactive or Open-pit mining Placer mining Underground mining abandoned mines and tailings Disposal of overburden and waste rock Gem extraction Beneficiation Tailings disposal 16 Site reclamation and closure

Environmental Legislations Environmental and Social Impacts of Mining Air Pollution • Fumes and noxious smells cause concern for communities living near mine sites • Water/ Water Stress • Sediment discharge from mining activities cause siltation of water ways • Non-compliance with regulation to inform of public water use and pay water tax • Deforestation • Land degradation and no site rehabilitation and • mine closure plans or practices in place by companies Land acquisition • People have limited legal ownership over the land on which they • live and farm leaving them with little protection incase of land acquisition Damage to land, crops and water sources • Loss of livelihoods • Migration and farmers becoming daily workers • 17 Drug/ HIV •