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Australian firm expects Karenni mining permit approved soon

File photo of mining operations inside Burma. (PHOTO: Reuters)

Eumeralla Resources, an Australian mining firm looking to explore for minerals in a corner of Karenni State, beset for decades by conflict, expects the exploration permit application it filed with the central government two years ago to be approved later this year, according to an update contained in its latest annual report released late last month.

Eumeralla and its local partner Myanmar Energy Resources Group (MERG) are seeking to explore a 400km-square area in Karenni State. The application was made by Eumeralla’s local Burmese subsidiary Mawsaki Mining Co, which is 70 percent owned by the Perth-headquartered company, with the remaining 30 percent owned by MERG, according to Eumeralla.

Listed on the Australian Securities Exchange (ASX), Eumeralla noted in its annual report that it “expects the exploration permit to be granted in Q4 [the fourth quarter] of calendar year 2016 with progress being made towards that deadline.” The permit has been described by Eumeralla as one of the biggest contracts undertaken by a foreign mining firm in Burma.

Eumerralla’s mining plans for Karenni State have drawn criticism over fears that such activities could destabilise a conflict-prone part of country. An October 2013 report released by the Molo Women Mining Watch Network (MWMWN), an environmental group active in Karenni State, claimed that Tin Kyaw, the head of the Karenni National People’s Liberation Front (KNPLF) militia, is behind Mawsaki Mining, Eumerralla’s local Burmese subsidiary. Mawsaki is also the name of a village controlled by the KNPLF which is located in Hpasawng (also spelled Hpahsaung) Township.

The Australian firm’s corporate filing indicates that it has been negotiating with Hpasawng township officials over the permit.

MERG, the firm that Eumerralla says owns the remaining 30 percent in Mawsaki, does not offer on its website any information about its ownership. Eumeralla’s ASX regulatory filings have listed MERG’s executive director as a person named Hpone Thaung.

The KNPLF, who formed in 1978 after splitting from the Karenni National Progressive (KNPP), signed a bilateral ceasefire with the central government in 1994. The group officially transformed into a border guard force (BGF) in 2009 and continues to operate two BGF units in the state, with BGG unit No. 1004 led by Maj. Ree Samar operating in Hpasawng.

Hpasawng Township is also home to the Mawchi mine, an area that during the British colonial period was considered one of the largest tin and tungsten mines in the world. In the years that followed independence, the KNPP, and later the KNPLF, fought with the central government to control this lucrative area.

There are currently several thousand former residents of Hpasawng living in Thai refugee camps in Mae Hong Son province who were displaced from their homes by fighting in the 1990s. The eventual return of this displaced population to Hpasawng, and any subsequent land claims filed by them, could significantly complicate any potential mining project in the area. This has prompted the Karenni Civil Society Network to publicly call for international mining firms to stay away from the state until the ongoing peace process has run its course.

Similarly, a coalition of environmentalists and land rights activists from across Burma have repeatedly called on the central government to halt all large-scale resource development projects while the peace process continues. Burma’s central government has so far declined to follow this recommendation.