Wanbao Mining, a Chinese company engaged in exploration and production of mineral resources, has agreed to up its investment in Myanmar's controversial Latpadaung copper mine project to just under $1 billion, a report said Wednesday. The investment follows a contract renegotiation, which resulted from villagers in farming areas surrounding the mine protesting against the loss of their land.
Wanboa's move comes despite the fact that a recent contract renegotiation will trim its stake in the mine's profits, according to Mizzima, an India-based Myanmar news outlet.
“We have invested $600 million to date,” said Geng Yi, Wanbao’s general manager in Myanmar. “We will up that to $997 million.” Geng said that expenses incurred due to specifications in the revised contract forced it to increase its investment.
Prior to the contract renegotiation, Wanbao was entitled to 49 percent of the profits. However, following protests in November and a subsequent crackdown, the Myanmar government appointed an implementation committee, which recommended that the project be allowed to continue with a revision of the contract terms.
The new contract, signed on July 24, will give Wanbao only 30 percent of the profits, while the Myanmar government will receive 51 percent. The rest will go to the military-owned Myanmar Economic Holding, Wanbao’s original collaborator.
Chinese firms have faced pressure in Myanmar from protests against allegedly unfair contracts, environmental damages, and China’s close ties with the country's former military regime.
Wanbao will also be required to pay $2 million a year in compensation and funding for those local villagers and farmers who've been displaced from their land due to the project, according to Mizzima.
The project began in 1998 as an agreement between the Myanmar Ministry of Mining and the Canadian firm Ivanhoe, which in 2010 sold its shares to Wanbao.