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Mining with Social Conscience

Saturday, 25 July 2015

kindergartenWanbao Mining Limited, headquarter in Beijing, is a wholly state-owned mining investment company with its business focused in mineral resources development and metal trading in Asia and Africa. Since 2010, it has been working with its Myanmar partners on the Monywa copper project in Sagaing region with the total investment to be around US$1.5 billion. Wanbao Mining has two sister companies in Myanmar, i.e. Myanmar Yang Tse Copper Limited ("Myanmar Yang Tse") and Myanmar Wanbao Mining Copper Limited ("Myanmar Wanbao"), which are playing a key role in boosting the development of Myanmar's mining industry while also benefiting the local people.

 

Myanmar Yang Tse is proud to be the only one producer in Myanmar for its LME registered Grade A Cathode Copper with the brand name of "Monywa S&K", which is mined from its Sabetaung and Kyisintaung (S&K) deposits in the Monywa Copper Mine area. It has a production capacity of 30,000 tons per year and will reach 50,000 tons per year by the end of 2015 in the wake of upgrading of the production facilities still being done. Myanmar Wanbao is developing the nearby Letpadaung deposit, which is the largest part of the Monyawa Copper Mine. It is hoped the Letpadaung mine, which is still under construction, will enter into production in 2015.

 

Win-Win and mutual benefit

Mineral resources will continue to play a key role in driving sustainable economic growth and boosting the per capita GDP among the people of Myanmar. It creates jobs, contributes to government revenues and nurtures a skilled work force for industrialization in the region.

Wanbao Mining sticks to mutual benefit while developing cooperation with its Myanmar partners, Mining Enterprise No 1("ME1") and Union of Myanmar Economic Holding Limited ("MEHL"). As per Production Sharing Contract, around 70 per cent of interests will go to Myanmar side despite 100% investment made by Wanbao Mining in the Letpadaung project for mine construction and mineral development. It is estimated that, upon entering into production, the Letpadaung project will directly contribute US$140 million annually to Myanmar government revenue. Indirectly, through local procurement, it will bring about US$70 million to local economy in the phase of mine construction within 3 years and US$193 million annually while the mine becomes operational.

As a responsible Chinese company, Wanbao Mining aligns its business strategy with community involvement. The aim for this is two-fold: to create more sustainable employment in the area and region, but also sew the first seeds of industrialization in the area. By creating backward and forward linkages through local procurement, Wanbao Mining hopes to create widest possible supplier network around its business. This will help sustainable development that will extend beyond the eventual decommissioning of the mine. This will also empower local villagers and give them more skills and control their lives.

 

Corporate Social Responsibilities

Sustainable development is of the utmost importance to Myanmar Yang Tse and Myanmar Wanbao. We never produce off-grade copper; in fact, it is inclusive sustainable development which is at the core of what we do. While developing the mineral projects, we place the social and economic well being of the local people at the heart of our business strategy. "People, planet and profit" are three pillars for the sustainable development of the mining sector, and we put people first.

We are committed to our community. As a Chinese proverb says, "Give a man a fish, and you feed him for a day; teach a man how to fish, and you feed him for a lifetime". We have been aware of the importance of skill building to local people. Therefore, we have provided 2training to 5,000 local employees of our own and our contractors, teaching them international-standard skills. Our goal is not only to become a leader in the industry, but also to become Myanmar's partner in education of mining expertise as the country opens its doors to the world. This will help promote sustainable development that will extend beyond the eventual decommissioning of the mine. This will also empower the villagers and their next generations and give them more skills and control over their lives.

At the same time, we did a whole variety of CSR activities for our community to benefit local people, ranging from road drinking water, electricity to education, healthcare and religious donations. Taking our mobile clinic as an example, we have had over 75,000 treatments of the patients in the villages that have had little or no access to healthcare free of charge. In addition, Myanmar Yang Tse's Mine Town Hospital has also provided a healthcare program to pregnant women and children under five years old within five miles for more than ten years free of charge. We are proud to be committed to put USD 1 million to its CSR programs every year at the construction stage of its Letpadaung mine. We are also delighted that 2% of our profit will go towards CSR investment for the lifetime of the mine once it becomes operational. Maximizing shareholders' value has taken a backseat as our strategy shifts to maximizing stakeholders' value. We believe when our CSR approach truly benefits the local people, financial returns will follow naturally.

 

Livelihood Contribution Plan

Our consultation has shown that there is risk of social instability caused by the delay in the operational phase of the mine due to the delay of the last two years. People are frustrated waiting for their jobs which were promised to them but which can only be awarded once the Letpadaung mine is operational.  For such villagers Wanbao, informed by international best practice on livelihoods needs, the respect for human rights, and the expectations of the people, has come up with a solution. For such villagers Wanbao has committed itself to paying an annual "contribution" to villagers.  This amount is the following for any household promised one job, two jobs or three jobs, they will be paid per annum respectively US$840 for one job, US$1440 for 2 jobs, and US$1920 for 3 jobs. The contributions will last until the land-lost villagers are provided with jobs by Myanmar Wanbao. The vulnerable like the old or those who are not capable of working will be entitled to have the contributions in the lifetime of the mine. The landless who depend on the landlord for a living will also be considered in a separate policy to ensure they have basic livelihood.

 

Focus on Protecting the Environment

3Myanmar's Monywa Copper Mine comprising of Letpadaug, Sabetaung and Kyisintaung deposits is the site of the second-largest copper mine in Southeast Asia. Early exploration and development started from the middle of the 20th century, the mine is located in a semi-arid area and has around 50,000 people living in its vicinity. We are committed that our Environment and Social Management System is in line with IFC standards and efforts to preserve the natural environment are a key aspect of our corporate agenda.

Myanmar Yang Tse is an SGS-certified company, certified OHSAS 18001 for occupational-health-and-safety management, ISO 14001 for environmental management and ISO 9001 for quality management. Myanmar Wanbao also sticks to the international standard while developing the Letpadaung project. We invite Knight Piedold, an Australian consultancy, to help us do the CESMS in the construction period and when the mine becomes operational, we will hold on to the ESIA that Knight Piesold has already finished for the Letpadaung project, which is under review and approval by the Myanmar Government. The ESIA is of the IFC standard and represents the good international practice in the mining sector. It is our commitment to the local community that we will not upset the ecosystem within which we work. We adhere to a strict zero-discharge policy, meaning that none of the solutions or liquid flows associated with our operations mix with those of the surrounding natural environment. Besides, we are also committed that, when the Letpadaung mine becomes operational, we will have US$ 2 million every year deposited in an escrow account as environmental protection guarantee fund for mine closure and environmental management.

 

As a responsible investor, Wanbao Mining will continue to develop mutually beneficial and win-win cooperation, abide by the Myamar laws and respect local culture, stick to the international standards and good international practice in environmental protection and is ready to keep increasing the investment in CSR projects. We strongly believe that, with the support of Myanmar government and close cooperation with Myanmar partners, Monywa copper project will certainly be a model project of foreign investment in Myanmar and must be a model project of friendship between Myanmar and China!