Myanmar (Burma): Mining, Minerals and Fuel Resources

This article was updated by Brett Smith on 6 May 2021

Image Credit: hans.slegers/Shutterstock.com

Officially known as the Republic of the Union of Myanmar, Myanmar (still known as Burma in some countries) is a country in South East Asia, with a population of 54.7 million. It is the 40th largest country in the world, with an area of 677, 000 sq miles. It also has a phenomenally rich biodiversity.

Myanmar is a country of abundant natural resources and yet is still one of Asia’s poorest countries. This is in part due to recent political turmoil.

In 2015, the first openly contested elections since 1990 were conducted in Myanmar. In this election, the National League for Democracy won the majority, Win Myint was elected as the President, and Aung San Suu Kyi was elected as the State Counsellor.

In 2021, the country’s military took control of the government in a coup d’etat after the military-backed political party lost the general election to Suu Kyi’s NLD party. After citing widespread election fraud and seizing power, military leaders declared a year-long state of emergency.

Overview of Resources

A wide range of useful minerals are naturally present in this country, such as rich deposits of tungsten, tin, zinc, silver, copper, lead, antimony, and industrial minerals. Fossil fuels coals, petroleum, and natural gas are also abundant. Myanmar is also a world leader in producing gemstones, including jade, diamonds, rubies, and sapphires. In 2018, mineral and mineral products comprised 23% of all exports.

The extraction of natural resources has been a source of income for native people for many years and has been undertaken in a sustainable way. In recent years, industrialized exploitation of mineral resources in the absence of correctly enforced sustainability measures and policies is putting the diverse environment of the country at riskIn particular, the mining of precious stones has been linked with numerous environmental impacts, such as poor water quality, deforestation, land degradation, and the accumulation of chemical waste. Mining has also been linked to localized erosion and flooding.

After coming to power in 2015, the NLD government had pledged to enact environmental reforms for the mining sector. However, few reforms have come to pass. The government stopped issuing mining licenses in an attempt to curtail environmental impacts until a major piece of environmental law known as the Gemstone Law was passed, but the law itself has not been strictly enforced.

The actual monetary value of the material mined in Myanmar is difficult to determine due to the political complications within the country. Some experts think that the amount of money made from the mining sector in Myanmar is heavily downplayed. Based on data available, in 2016, the US Department of State estimated a total export value of USD$15.7 billion, of which a significant proportion was natural resources.

Problems encountered when mining in Myanmar are like those seen in any mountainous and rural country, in that the mining areas are very remote and difficult to accessFurthermore, many natural resource deposits are located in regions affected by ethnic conflicts. A major part of the ongoing conflict in the Kachin state is centered around the control of the region’s natural resources. For many years, jade mining in the state has been controlled by the military.


These figures are estimates based on statistics from the Burmese Government's Central Statistical Organization, December 2010. Image Credit: US Department Of State.

Industrial Minerals and Gemstones

Representing more than 90% of global production, Myanmar is the largest jade producer in the world and is one of the only countries in the world to produce jadeite, the highest quality of jade. According to data from Global Witness, the industry is worth $30 billion, which is more than half of the national GDP.

A significant number of jade sales in the country are conducted by a state-owned company at national jade emporiums. Jade export in the financial year 2014–2015 was more than $1 billion; however, this export fell in consecutive years. Data surrounding jade and other industries is murky due to the remoteness of mining operations and political instability. According to the Extractive Industries Transparency Initiative (EITI), about half the government data on Myanmar’s precious stones industries is missing or incomplete. Observers say a significant amount of jade is smuggled over the border to China, making it difficult to track and tax. The Natural Resource Governance Institute (NRGI) has found as much as two-thirds of jade production in Myanmar is not taxed.

Rubies, sapphires, and diamonds are also found in significant quantities in Myanmar. According to the EITI, $975 million worth of gem sales were conducted at the country's emporiums in the 2017-18 financial year.

Metals

Mineable metals, such as gold, silver, copper, tin, tungsten, zinc, and nickel are abundant and diverse in Myanmar.

In 2014, the country’s massive production of tin shocked observers, rising to become the third-highest in the world. Over the course of five years, tin production increased around 4900%, which was largely attributed to a new tin mine in the Wa State, as opposed to the more traditional tin-producing tin areas in the country’s southern regions. Because the Wa State is largely autonomous, tin production was not significantly affected by the February 2021 coup.

Nickel is a growing commodity in Myanmar. In 2013, the country produced 9300 metric tons of the mineral, an increase of 4300 metric tons compared to 2012.

Copper is also present and primarily extracted at the Monywa copper project.

Less common metals are also present in valuable quantities, including tungsten and molybdenum. It has been reported recently that Itochu Corp of Japan has begun feasibility studies into the mining of these metals.

Unfortunately, the mining of metals, especially tin, in the delicate coastal regions of the country may be threatening the local environment.


A satellite photograph of the Irrawaddy Delta, Myanmar, one of the world's great rice-producing regions. Image Credit: CIA World Factbook

Fossil Fuels

Coal, oil, and natural gas all feature prominently in Myanmar’s wealth of natural resources.

The most important of these is natural gas, which is estimated to account for 40% of the export of Myanmar. It is the 39th biggest producer of natural gas currently and exported around $6 billion of petroleum in 2016. A pipeline that connects Myanmar and China delivers gas from the Bay of Bengal and offshores sites if Myanmar to China. Five countries, including China, Myanmar, South Kora, and India have invested in this project.

In 2013, another natural gas pipeline that connected the Shwe field complex, Bay of Bengal, to Yunnan province, southwest China was completed. The cost of this project was estimated to be US$2 billion.

In 2013, around 560 coal mines were estimated to be present in Myanmar, and the annual yield of coal was about 700,000 metric tonnes. In 2017, the government decided to stop issuing new coal mining licenses due to adverse effects on the environment. Licensing resumed after the passing of the Gemstone Law.

Investment

For the 2015-2016 fiscal year, direct foreign investment peaked at nearly $9.5 billion. For the 2019-2020 year, foreign investment was at $5.5 billion.

Traditionally, business investment from the wider international community has been slim, with the only major economies investing in the country is China, Singapore, India, and South Korea. For 2019-2020, Singapore was considered the biggest single foreign investor, but the combined investments of China and Hong Kong for that year were larger, according to official Myanmar data.

In 2017, investment in transportation and communications areas fell by almost two-thirds. The investment in the tourism sector fell by 56%, while the investment in the power sector fell by 55%. The persecution of Rohingya by the military, which was criticized by the international community, may also have caused a dip in foreign investment.

Legislations have been passed by the Myanmar parliament which has reduced the restrictions on foreign investment from August 2018.

Disclaimer: The author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.

References and Further Reading

G.P. Thomas

Written by

G.P. Thomas

Gary graduated from the University of Manchester with a first-class honours degree in Geochemistry and a Masters in Earth Sciences. After working in the Australian mining industry, Gary decided to hang up his geology boots and turn his hand to writing. When he isn't developing topical and informative content, Gary can usually be found playing his beloved guitar, or watching Aston Villa FC snatch defeat from the jaws of victory.

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