SINGAPORE, Oct 4 (Reuters) – A year ago Myanmar was the hot new destination for resources investors looking to make a fast buck in a country opening up to the outside world, but a new mining law is still not passed, the hot-money crowd has filed out and reality has set in. Yet while funding options may have slimmed, opportunity is still knocking, industry participants at a conference in Singapore said this week.
“A year ago everyone was going to Myanmar. You couldn’t get on a flight there because every flight was booked,” said Edward Rochette, chief executive of Canadian explorer East Asia Minerals Corporation, which has applied for an exploration permit in the country.
“Investors were thinking: ‘It’s wide open, it’s the Wild West, we’ll just sign and be done’. Unfortunately, it’s going to take time,” he added.
Explorers have banged up against processing times for prospecting permits stretching out several years while commodity prices have fizzled and debt and equity funding markets have dried up. The country has to fight harder to attract capital.
“In up markets they (explorers) can sell the blue sky, greenfield projects. In a down market these companies are on the edge and just cannot attract capital. Most of the people here are at the small end of town,” said a source from a commodities trading house who was attending the conference.
This is dampening government efforts to raise foreign capital in the mining sector and has pushed out processing times for local-foreign joint ventures to gain the right to explore, participants said.
“There’s disappointments in local parties not coming through, there’s disappointments in foreign parties not being able to raise money once they promised it,” said Ma Cherry Trivedi of Myanmar-based Two Palms Mining Company, whose company has several permits in the application stage.
Myanmar is rich in minerals including gold, copper, lead, zinc, nickel, tin, antimony and chromite. It passed foreign investment legislation almost a year ago, but its mining law is still at least six months away.
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