Chinese Name: 莱比塘铜矿
Location: Salingyi Township, Sagaing Region, Myanmar
Type of Project: Extractive
Project Developers: Wanbao Mining Ltd. (subsidiary of China North Industries Group Corporation Limited [Norinco])
Main Contractors: Norinco International Cooperation Ltd. (subsidiary of China North Industries Group Corporation Limited [Norinco]); Sinohydro Bureau 10 Co., Ltd. (subsidiary of Power Construction Corporation of China)
Known Financiers: n/a
Cost: 1,065 million USD
Project Status: In operation (production commenced in March 2016)
Located in the northwestern region of Sagaing of Myanmar, an area rich in mineral resources, Letpadaung Copper Mine is one of the four main mineral deposits of Monywa Copper Mine, which was previously owned by Canadian mining company Ivanhoe Mines and Myanmar state-owned company Mining Enterprise No 1 (ME1). The mining site covers around 31.91 square kilometres of land.
During Chinese then Premier Wen Jiabao’s state visit to Myanmar in June 2010, Wanbao Mining Ltd., a subsidiary of Chinese state-owned arms manufacturer China North Industries Corporation (Norinco), signed a cooperation agreement with the government of Myanmar to develop Monywa Copper Mine. Wanbao Mining would be responsible for the capital investment and operation, while Myanmar Economic Holdings Limited (MEHL) was set to acquire necessary permits from the government and settle the land requisition. The 2010 agreement entitled Wanbao Mining to 49% of the project’s net profit and 51% to MEHL. The construction of the project was contracted to Norinco International Cooperation Ltd. (another subsidiary of Norinco) and Sinohydro Bureau 10 Co., Ltd.
The construction of the Letpadaung mining project commenced in March 2012. Between 2012 and 2016, the construction was postponed at least thrice because of the local protests. In March 2016, after a three-year delay, the project started to produce cathode copper. The government of Myanmar was expected to collect around 20 million USD from the first ten months of production. In 2019, the production of cathode copper amounted to 120,000 tons. Due to their failure to fully disclose beneficiary ownership information in accordance with a 2019 presidential order targeting all extractive companies active in the country, in February 2020 Myanmar Wanbao, MEHL, and Yang Tse Copper Mine—another Wanbao Mining subsidiary that operates the Sabetaung and Kyisintaung Mines, the other main mineral deposits of the Monywa Mine—were all marked as ‘suspicious’ by the Myanmar Extractive Industries Transparency Initiative, a unit set up under the Ministry of Planning and Finance.
Following the military coup of February 2021, the country was hit by nationwide strikes, including at the Letpadaung copper mine, where 300 of around 2,000 workers dropped their tools and refused to work. Recent media reports have indicated that as of early March, operations at Letpadaung and Wanbao’s other copper mine in Sagaing, Sabetaung & Kyisintaung (S&K), have ceased. Exports of crucial metals including rare earths, tin, and copper have dropped significantly, raising prices of these commodities in China.
Just as the construction of the Letpadaung mining project commenced in March 2012, Thein Sein’s government, installed in mid-2011, started to ease restrictions on speech and liberalise the economy to court foreign investors. However, thanks to the newly-granted freedoms, political activism mushroomed in Myanmar and the mining project soon came to face repeated protests by activists and local residents.
Tensions rose even more in August 2012, as the project developer brought in security forces to protect the mining site. Alleging that the copper mine had caused unlawful land confiscation, forced displacement, environmental damage, and destruction of religious sites, the protestors demanded that the project be halted. As local police used forceful tactics to deal with the protests, the mobilisation was drummed up by national activist groups such as 88 Generation Students and the All-Burma Federation of Student Unions, attracting the attention of national and international media.
In a confrontation that occurred in late November 2012, the police used white phosphorus munitions, injuring around one hundred protestors, including Buddhist monks. This marked the most brutal case of state-backed violence under the Thein Sein government to date. In response, on 1 December the President invited then opposition leader and democratic icon Aung San Suu Kyi to chair a commission investigating the local grievances against the mine.
In January 2013, a report by Myanmar civil society organisations named Lawyers Network and Justice Trust alleged that local officials had used coercive and fraudulent means since December 2010 in order to compel villagers to sign contracts with the mining company, which made the documents voidable. The report also alleged that the police had unlawfully arrested opponents to the mining project and used excessive force and white phosphorus munitions to disperse peaceful protestors, thus breaching administrative procedures and violating constitutional rights.
On 12 March 2013, Aung San Suu Kyi’s commission published an eleven-page report in Burmese acknowledging that the police had used white phosphorus munitions. Holding that Wanbao had not properly compensated local residents and that compensation mechanisms lacked transparency, the report recommended that additional payments be made. Also, the report did not recommend closure of the project, on the grounds that such a decision would hamper Myanmar’s foreign relations and undermine the government’s policy to attract foreign investments. However, the report drew widespread criticism from the local communities and activists as it failed to hold any official accountable for the police violence.
As a result of the commission’s report, in July 2013 the government of Myanmar and Wanbao amended the Production Sharing Contract. The new pact stipulated that 2% of the net profit be devoted to Corporate Social Responsibility projects and the development of the local communities. The government of Myanmar, Wanbao, and MEHL respectively hold a 51%, 30%, and 19% share of the project. ME1 on behalf of the Myanmar government and MEHL are responsible for land acquisition, compensation, and resettlement, while Wanbao is responsible for the design and operation of the project and completion of the Environmental and Social Impact Assessment (ESIA). The ESIA was approved by the National Environmental Conservation Commission in December 2014.
The revision of the contract was just one of the steps required to build the social license, i.e. the ongoing acceptance of a business activity by its stakeholders and the general public. However, tensions continued to mar the relationship between the companies involved in the project and the local communities. In May 2014, two Chinese employees of Wanbao were kidnapped for one day by activists requesting that the company tear down the fence of the mining area and that the police release some of their comrades who had been previously detained. In December 2014, amid a protest against an expansion of the mining project, a local villager was shot and killed by the police, sparking protests outside the Chinese embassy in Yangon. In May 2016, hundreds of villagers protested against the resumption of the mining projects, and two of the leaders were charged with unlawful assembly.
In response to criticisms, Myanmar Wanbao has sought to repair its reputational damage by seriously engaging in CSR efforts. It published a CSR strategy in 2013 and subsequent reports of its activities in 2015 and 2016. The company’s CSR responses have triggered tremendous interest from Chinese NGOs and research institutions—for instance, the Beijing Rongzhi Corporate Social Responsibility Institute and the Social Resources Institute—to the extent that in the Chinese-language literature Myanmar Wanbao has become a classic case study of CSR in overseas investment. During the peak of the conflicts between 2012 and 2016, the company also became more proactive in its public-relation efforts to counter narratives about the negative impacts created by its investment in the Letpadaung mine, including producing a short documentary targeting international audiences and responding to inquiries from international NGOs. As conflicts lessened after 2017, however, the company stopped publishing its CSR reports. While international coverage of the Letpadaung mine dwindled after this period, Wanbao continues to receive glowing coverage on Chinese state media about its community engagements—here are examples from Global Times in 2018 and People’s Daily in 2019—likely as part of the broader public diplomacy efforts to push for greater economic cooperation between China and Myanmar.