* Resource investors holding back for clearer regulation
* New mining laws may shorten bottleneck to get permit
* Recent labour unrest at mine not seen deterring investors
By Melanie Burton
SINGAPORE, Dec 5 New investment and mining laws
in Myanmar are unlikely to open the flood gates to investment as
prospective miners still face a wait of three years or more for
approval to break ground, industry sources said on Wednesday.
Myanmar's parliament approved a foreign investment bill in
November aimed at allowing overseas companies to fully own
ventures and to offer tax breaks and lengthy leases of land.
Most major firms have been waiting to see the new law before
committing significant funds. But some resource investors
considering exposure to the country, which is rich in resources
such as copper, gold and tin, say still more legislative work
needs to be done.
Investors said Myanmar's new foreign investment legislation
was a positive step but still needed to be backed by regulation,
education and enforcement.
"We are taking a wait-and-watch approach. I think the fiscal
and regulatory regime is not quite balanced enough at this
point," said Clive Donner, managing director of boutique private
equity fund LinQ Group, speaking on the sidelines of the Myanmar
Mining Investment Forum in Singapore.
LinQ Group invests in resource companies in emerging and
developed mining regions. Donner declined to comment on its
assets under management.
Myanmar, also known as Burma, has introduced the most
sweeping reforms in the former British colony since a 1962
Some global companies are keen to tap business opportunities
in the country, which has recently embraced democracy.
One remaining hurdle is the long waiting time to get permits
for exploration and development, said Ma Cherry Trivedi, of
Myanmar-based Two Palms Mining Company, which already has
"You are looking at a four-to-five year time frame to
develop anything in today's regulation. The mining ministry is
looking to shorten that time frame," she said.
Waiting times will still remain long because prospective
miners must get rubber stamps from multiple government
ministries as well as from local authorities.
"The time factor ... is probably the current bottleneck and
discouragement for foreign investment in the country," said
Edward Rochette, chief executive of Canadian explorer East Asia
Minerals Corporation, which is currently negotiating an
agreement for mine development in Myanmar.
"My wish list would be (for) acceleration of the process.
You submit an application and you should get an answer in a set
period of time."
Investors also cited remaining concerns surrounding
profit-sharing arrangements, a comparatively short tenor of
exploration permits at up to two years and a ban on the export
of raw products.
But labour unrest, such as at Myanmar's biggest copper mine
last month, is unlikely to deter investors
because it is seen a common occurrence throughout the industry.
"I don't think that's going to derail the way things are
going. It just highlights that we (investors) have to go into
Myanmar with appropriate global standards," said Jeremy
Kloiser-Jones, chief executive of Bagan Capital, a
Myanmar-focused investment and advisory firm that is currently
raising $75 million for its Myanmar Transition Fund.
Those resource-sector investors who want to get in quick and
to prepare for when exploration really takes off should focus on
gaining a foothold in existing projects and in the mining
services industry, Trivedi said.
"There is a degree of wait and watch and a degree of
first-mover advantage," she said. "At the end of the day it is a
question of how much you are open to risk - there is a lot of
opportunity in being an early mover."