Q: First of all we would like to know about how Wanbao acquired the NO. 1 Copper Mine Project in Myanmar.
A: You would like to know the history?
Q: Yes, how was it that Myanmar Wanbao Company obtained the license for this project?
A: Ok. I would like to begin by thanking Sky Net for giving the company, and for allowing myself, this opportunity to introduce some information about the project. So for your first question, I would like to explain a little bit about the history of the project. Actually, from 2007 until 2010, for nearly four years, we were engaged in acquiring the project from its previous developer. This is the Canadian Mining Corporation of Ivanhoe. During these four years we were negotiating with both the Government and the previous shareholders regarding the acquisition of the Monywa Copper Mine Project. Actually we were not the only one negotiating for this mine. There were competitors from Korea, Russia, and also from other Chinese companies. The final decision for Wanbao to attain the project was awarded because we offered the most favourable conditions for the previous shareholders, as well as for the Government, and we won. We can say that… we won the competition finally in 2010. And that is the history.
Initially we were very interested, because this Monywa Copper Mine Project is very famous and may be the only mature mining project in this country up to now. Even some of our engineers have learned mining lessons in their college text book where the Monywa Copper Mine was used as one of the typical cases in their study. This mine is referenced all over the world. I have seen the history date back nearly 100 years ago. This project has a continuous historical significance as it develops through research, in different stages over time and by various enterprises. We are very lucky and very honoured to be a part of continuing the history of this very important project, and we intend to be the final developer until the completion of this project.
Q: So Wanbao was handed the project from the Ivanhoe Company?
Q: At that time what were Wanbao’s hopes for this Copper Mine Project, and what are your business expectations?
A: We are interested in this project, just as I mentioned before due to the copper resource. The resource is very large and the mine is also in terms of ore and the project environment. What I mean is that the climate in the Monywa area is very favourable for mining activities. This is why we and so many others had such a great interest in this project.
Q: Right now the Copper Mine Project is a very sensitive topic with the local people. What are your activities that will benefit the local people from this project?
A: That is a very good question. From my understanding of global mining industries, whenever there is a large mine development in any place around the world there are always some sensitive topics. This is because the mining industry, especially for large-scale huge projects, creates social and economic, as well as environmental impacts directly to the surrounding communities and indirectly to the country of the ownership. We understand this clearly. So what we are trying to do right now is to find good solutions, good answers, good plans and good actions to deal with all these foreseen aspects, not only economically, but most importantly the social and environmental impacts.
Q: Could you tell me more about that, what I meant is, the local people, can you provide jobs? Could you tell me more details about that?
A: Yes, so you see, for the past 1 year, so many debates or arguments whether the project should be going forward or not? And fortunately, the Government of Myanmar established the investigation commission which is chaired by Daw Aung San Suu Kyi to make overall investigation report for the project. In March, after the investigation report coming out, we can see very clearly, it is not my talking. It is mentioned very clearly in the commission report that this project, in general, should go forward, because this project will bring benefits to the country and to the people, especially to the development of the local communities .Even through there were be some improvement also they report suggested, some improvement to be done during the development of the project, so my understanding is that, we have to do this project. So we have to do it with better or best possible ways according to international good practices.
Q: So we heard that after releasing the report there had some strikes from the local people and there were some arguments about that. So we’d like to know about that. What is the situation right now in this area?
A: I think the situation looks worse from the outside. We are everyday over there, in contact with the community, every day, even though many demonstrations or protests against the project are organized by some political parties. Basically I have never felt confronted by real native people. Most of the villagers appreciate that they have the chances we offer, believe that together with the mine that they can utilize this chance to get better lives. Because they also know that, every day the mining company, not from now, not from one year ago but from fifteen years ago this mine already existed. For a very long time mining companies, previous developers, including us, have been trying to get along with local community harmoniously. By harmoniously I mean that we like to make a contribution to benefit the local people by realizing mutual development, by development of the project. Just now you mentioned that our social aspects are accompanied by the activities or the company’s plan, now it is more and more clear, we already mentioned this. Very recently we redefined what we will do in this area in the amendment of the contract. Very soon the amendment of the contract, not a new contract, has outlined important issues that have been amended to the original contract. These points are directly related to social, environment and economics. For example; socially we will set up one fund which we call the Community and Society Development Fund. This Fund of the company will contribute during two stages. No (1) Stage is during the construction period, which means that if we start construction and before operations, before we make any benefits or profits by the project, the company will contribute every year at least one million dollars to the fund for all assistance to the development of the local area. This assistance will be in part, or overall development planning of the regional government, which regards infrastructure such as roads, dams, bridges, electricity, water supply and also medical care for the people, better education conditions with renovations, building of new schools, and also in agricultural areas. And we will build many playgrounds and libraries; also donate to Buddhist religious affairs. This fund will be an overall basic tool or instrument to realize corporate social responsibilities; we call this CSR. The No (2) stage is during the operational period; after we have finished the construction of the whole project and once we realize the design capacity of production. At that time, each party of the partnership, not only Wanbao but also the other two partners, ME1 Mine Enterprise under MOM (Ministry of Mines) and MEHL will allot from Net Profit Earnings from this project of a percentage, which will be at least I call tell you, at least 2 percent of the Net Profit will be put into this fund at that time, to which I estimate will be more than 1-million dollars at that time. Now all of these conditions have been mentioned clearly and implemented into the amendment of the contract. This outlines all the social aspects.
Regarding Environmental aspects the previous contract didn’t mention very clearly about our Early Works Stages or the ESIA work. At present we are near to completion of the new ESIA report that is being created by Knight Piésold from Australia. On top of ESIA works, Environmental Conservation or Protection of the project area is a long term goal, and after the beginning stages we have implemented long-term tasks and commitments to fulfil these objectives. This requires that we need to take care of the project area, and also the surrounding areas regarding environmental issues. In the contract amendment the Government stipulates requirements of us, also we are willing to define it very clearly; our project is in accordance to international practices; we are designing in this manner for the project, and we are designing for mine closure. So our aim is not everyday mining work, but also for the whole life of the mine, which is towards 30 years. How we conserve the environment, how we complete progressive Rehabilitation, redesignation of things, I think you understand. We have to take actions to recover the environment during the mine development period, not only after mine closure but before mine closure, during the development period, according to adopted good practice and standards, we will progressively rehabilitate up to the closing period. By the end of our 30 years of mine life we will carry out decommissioning of the project, and we will carry out mine closure planning and even, after the mine closure we will carry out long term monitoring and response planning. So to cover all these activities and planning we have committed to put enough, or sufficient budget with some kind of security or guarantee as early as possible. In the amendment of the contract we are required by the contract that after the construction period we will start operation, and that every year we will put at least 2-million dollars into one (closure) fund. Like all funds this fund will be supervised or monitored by Government authorities and we will make transparent to the public how we spend this money. Every year we will allocate towards closure 2-million dollars up to the end of the mine life, which means that around 60-million dollars will be allotted for recycling, rehabilitation, for mine closure and post mine closure to ensure that we are able to fulfil our commitment for environmental conservations. This is the summary regarding the Environment.
The other area is also very important regarding the economical side of the project. I remember one famous Economist in Myanmar, Professor Dr. Aung Htun Thet - he is also a member of the Implementation Commission who gave advice for the contract. He pointed out that for any business, especially for any huge project, that a project is like a table. The table should be stable and should be sustainable. How do we support it sustainably? He mentions three legs support the table. One leg is socially sustainability, Social means people; people should support or get the benefits by the project. Another leg is environmental sustainability. With only 2 legs the table cannot be stable and therefore a third leg is required and also must be strong. This is the leg of the economical side, or the profit. So we can say that people represent the social, climate represents the environment, and profit represents the economical side of the project. With these 3 legs of the table we can support the real sustainability of the project. Now in the amendment of the contract, from the Company’s side, I mean two companies; one is Wanbao and the other one is our partner MEHL; we will share more benefits with the government side. The Government is representing the country, representing the people of the country. So after amendment of the contract, generally speaking, over 51 precent of the benefits of the project will go directly to the government, represented by direct sharing to ME (1) and other taxation, royalty, commercial tax, income tax, and other taxation to the government of the related authority. So combined government benefits will be over 51% of total benefits of the project. The Company side of MEHL and Wanbao will get less 49% of the total benefits. This is also one of the important amendments of the contract.
Q: We heard that the local people are asking for compensation from this project, so we would like to know how many people? How many local people got compensation from this project? Are they are taking their compensation? How many people?
A: For compensation issues and resettlement of people, resettlement plan, land compensation regulation and relocation is according to the contract, all of which obligations or responsibilities are set by the government. This is the basic idea. But from Wanbao we supply No (1) is budget money. No (2) is whatever we can assist. Actually for two years, I can say 2 years ago we already finished the complete process or procedures for this plan of compensation, regulation and relocation. But unfortunately people are not satisfied. In the commission report release it suggested very clearly “above the law” standards; according to the market price and situation Wanbao or a company should support more money for the government to carry out this compensation and reallocation plan. So that’s why we put additional on the average of two times the compensation standard to concerned villagers. For new additional compensation, as I know for this moment, over 37 percent compensation has been taken or claimed by the villagers. Also I understand; I talk to many villagers why they did not take the compensation yet. In general they are waiting for some confirmation that this is the final one. They understand that this is already enough according with the commission report and according to the market price. But they are still waiting confirmation that this is the final one. I understand people’s feeling. Because this is the final chance to get direct cash support or cash compensation from the project. And also they are waiting to see all the related plans like job creation plan, like community and social development plan. They want confirmation that the project, from the project, from the company, they can get insurance that they will be happy for the long term. After taking the compensation if nobody cares for them, and they have spent their compensation, who then can they can rely on? So now what we are doing is we are trying to join lead with the government to achieve the community consultation process. We would like to inform the people that we know your worries; we understand your feelings, especially for the change of your life for the long term. We’ve explained what we will do for development this project, and also we’ve explained what we have in our plans if our project plan can be carried forward. We will offer, we will create job opportunities; we will help for all aspects of the lives of the people. The government also is paying much more attention for the development of this area. So the government will put, I believe maybe put more than the company, for the people lives for the long term. So it will combine the capacity of the Government and the Company by utilizing this project. I believe this can help people to get a better life if we can move forward together. So we are trying to inform and consult with the community and relieve their worries, and to give some kind of commitments for their life in the future. I believe more and more people, I can say most of the people, will understand and will give us this chance, or in the same time give them the chance to move and work together with the company towards what I believe is for a better future.
Q: So Wanbao is doing a lot of good things for local people, and you also believe the local people will get good benefits for them, what I would like to know is if the people are satisfied with the activities of Wanbao.
A: According to my direct communication with the villagers, we have now a CSD Team, (Community and Social Development Team) established in our company, which is comprised of representatives of the local villages. We have the 30 villages around our mine areas, almost from all the villages. They recommended or select the some representatives, and then when I talk to them. Most of the villagers appreciate what the government and what the company have done or are planning to do for their lives. In this area most of the villagers are farmers. They are very simple. When we do something good they feel very appreciative. They also understand very realistic concepts; roads cannot be built in one day and that all of the existing situations are not all because of the project. Also they wish strongly that this project, people and company should fulfil our commitments. They worry that the company will run away someday. You know we are very responsible, but they really wish that the company can realize that all the commitments and long term plans and actions to contribute to the development of the community are achieved. And they will get benefits from the long term activities of the company by our CSD plans.
Now the main theme is the people worrying about the future, and for this I am very sympathetic. I feel the same way. I can feel their feelings. When I talked to VOA Myanmar Journalist I also gave him one of my own experiences in China 30 years ago. China was also very, very poor. We are so poor and that moment, maybe more poor than Myanmar 30 years ago. In the 1970’s we started opening the country to all the reforms and to all the development plans. During these 30 years my own life also changed a lot. I got new chances and my father and mother also got their chance. Their lives changed. I was born in 1976. Before primary school, my home was in one very small city in the south-western part of China. At that time life was difficult. Even my father and mother didn’t see any hope. But step by step, for myself, finally I got more education chances in comparison to my parents. Then I got a degree from University. Finally I owned my own home in the capital city of Beijing. Even my parents did not think that life can change so much within 30 years. So I would like to share this personal experience with the local people. If most of us, or all of us corporate in a very constructive manner then we can work together towards the future. I believe the future will be better than before. There is no chance to be worse if we are doing things in a better way. This way we can realize, we can solve I believe all of the problems or issues that now worry us through a naturally smooth development. After 5 years, or 10 years when we look back to this time, we will see that what was so worry us, and causing us to argue with each other without any agreement, caused us to move forward in solving the difficulties and overcome our issues. I believe that this will occur, step by step during the future 5 to 10 years. When we look back, I believe, I feel, all of the people will be happy that they took the chance.
Q: And this is the last question. In our country Myanmar, most of the people worry about doing business with foreign countries. Right now Myanmar is developing from foreign investment and the tourism sector, but in the meantime some of the experts are telling us the benefits from foreign countries for the local people are very low. Because of this situation is there anything Wanbao would tell the local Myanmar people? Do you have any opinion about this for Myanmar people?
A: For the resource sector and for all mining industry, the importance is to answer the benefits issue. The resources belong to the people and to the country. We are only the investor and are excited to be allowed this investment. By giving us this chance I think this is the very wise decision by the country and your government to want to develop. They have the sense of need for development. For the beginning of the development stages the country has a shortage of investment, experience, technology, and even of skilled work force and management skills and how to realize a development, or faster development? By the introduction of foreign investment it is allows for an efficient way. Other countries also do this. In China we also learned to benefit from this concept well. Our Leader Mao Ze Dong and Mr Deng Xiao Ping are well known to most Myanmar people. Mr Deng Xiao Ping is the chief designer of the reforming and opening policy. He is also, even for the Mining Industry development in China, a very fast leader to make a decision to invite the very first foreign investor from America. In 1980 we have a coal mine in Shan Xi Province; the very first foreign investor was invited to invest in this coal mine. Mr Deng invited one very famous ore (oil) entrepreneur from the America, Mr Hammer. He invited him to invest over 7-hundred million dollars, which at that time was an extremely highest investment for a coal mine. Many people argued and accused Mr Deng of selling the resources to foreigners. After ten years the mining technology in China very quickly developed due to this cooperation of utilizing foreign investment. This is the good experience all over the world, not only from China. I believe this is a good decision for the country to invite or to invest and to give favourable conditions, to encourage foreign investments, to boost the development of the country, and at the same time everything must be regulated according to international practice. For this moment, globally we share so many good practices to protect the people, to protect the environment and to realize reasonable profit. This will really contribute to the development of this country, I personally believe so.
How to understand the overall benefit for any project? Some benefits are direct, like government taxation; we make profit so we have to pay tax. This gives the government more revenue and capacity for development planning, accountability and feasibility of internal projects. A government can become stronger through benefits from the project. Another kind of direct benefit is through CSR (Corporate Social Responsibilities) activities that we are doing. This is also direct impact, good impact to the people, especially for surrounding communities directly related to the project. Besides paying taxes, besides the government helping the people, our company also can help the people directly. This is the direct benefits from the project.
There are so many indirect benefits from any project such as ours. There is a value chain value created by our project. We have to buy many things, we have to procure materials, we have to sub-contract many construction works to the local people. We have to buy services and eventually employ 4000 to 5000 people. And as for these employees on site, all employees need food, they need accommodation and they need transportation. The value chain is we can supply or we can help our supplier, if our supplier can get jobs from our project, they also create jobs. If they come to the site not only our employee gain by increased skill level, but also their employees. One important idea I ‘m thinking all the way is that we are producing Cathode Copper 99.999% pure copper. We are not going to bring all the stones to the outside, we produce all final products in Myanmar and this product is already been registered in the London Exchange with the brand name Monywa S&K. They have the brand name. It is the only one in Myanmar to produce registered Cathode Copper; this copper can be used in many industries. Now in Myanmar we don’t have much industry such as power cable, we have to import from overseas. We have to import cars, electronic appliances and also so many construction materials we have to import, but later for this manufacturing industry the government is planning to establish and to encourage an internal manufacturing industry. In the meantime, the copper, our product, our final product, the copper is the base fundamental material in these industries. I think it’s very good timing to do this project. Previously it had very small capacity. At present every year we can only produce 10,000 to 50,000 tons of the copper, but after Letpadaung Project is established or accomplished, we can produce 100,000 tons of copper. Combined with S & K our goal is 150,000 tons of pure copper. Now we are opening the tender internationally. Most of the copper has to ship to the overseas international market. Why? Simply because this country doesn’t have the industry to consume this copper. Now we start the Letpadaung Project. Within the future 30 years, with every year around 150,000 tons copper produced in this country how many industries can get benefits from our copper mines?
Please consider what industrialization and urbanization processes can get in terms of contributions and benefits from this project. Everybody knows or imagines about these benefits and this is the opportunity. When we talk about benefits, please consider the large picture, in much bigger figures and in the long run of time, not only by this moment, not only by very direct benefits, there will be much more from the project. That is our honour as the investor. We also like to share our concepts or our ideas from doing the project, not only for our own profit, but also if we can contribute more. Because you see our motto? Every year we published a book to focus on the activity for the development of the community and how much we spend, or how much we have done for the local community. Our motto of the company is ‘Responsible Mining and Sustainable Development’.
Q: So could you tell us the short note for Myanmar people as Wanbao Company?
A: We are very patient, we understand the people, and we are responsible and we will not run away! (Laughing) We are not able to run away, so please do not worry, Please give us the chance. In return, we are wishing to get your patience, your understanding and your trust and confidence for the company and for the project.
Q: Thank you.
A: And could I give one message to the Activists?
A: Because today morning I heard that Iron Ladies, Daw Thwet Thwet Win and Daw Aye Net held a press conference in Kangone Village, nearly in the mine area. Also the other day one journalist asked me whether I should respond to the activists whose idea is to stop the project.
So I like to give some messages to the activists.
Actually I want to meet the Daw Thwet Thwet Win and Daw Aye Net very close and talk as here. And now I think they are still activists for stopping the project. My message is… I have one suggestion. If we can see more and more benefits for the project to the people, and we can be more and more confidence of the project, should we talk directly? We are open for anybody, not only government officials, not only community villagers, but also some NGOs (Non-government organization) including some activists in the social area and regarding environmental issues. My proposal is that, if possible, we could directly communicate. I think they also represent some of the thinking’s of the people. Instead of talking about how to stop the project, can we start to talk or discuss to find some solutions for doing the project in better or the best possible way? Then maybe we will not stop from here, or return backward on the country. We can reach some kind of agreement to go forward. I don’t want to stop here. I want to start my plan and I want to put my words not only on paper, not only talking, I want to put them into actions. Then people will really see for their own eyes where the benefits are. By only talking about the benefits the feeling is not so sure. If we can really enjoy the benefits by actions is a solution, and it is really a benefit for the people.
I like to send this message… Please come to us, we have already set up one complaint centre, in our camp. Also we set up many suggestion boxes for the villagers.
If you feel you don’t want to directly talk, please put your message or suggestion or complaints put into the boxes. We will take them, we will analyse them, we will review, we will response and make discussions for solutions or clarifications of the letters. If there are any misunderstandings or rumours we can clarify face-to-face. And if you can come to our centre you are most welcome. Please come to our camp to our complaint centre. If you do not want to represent any people please come directly. The Government is trying todo consultation. Our Company is also trying to do consultation. We are foreigners and we fully respect the culture, history and traditions of this country. But frankly speaking, we may not well understand the whole situation very clearly. Please also understand that we are foreigners. We have many difficulties, but we have the willingness to talk to each other, to the people. Please come and we can talk. Let’s come to some solution, to some kind of constructive solutions.
Thank you very much for this chance.
Script written by Ye Linn Mg(小陈)
Edited by Editor MYTCL