IVANHOE LOOKING TO YEYWA PROJECT FOR POWER SUPPLY

IVANHOE LOOKING TO YEYWA PROJECT FOR POWER SUPPLY

Yangon: Kyaw Thu: Myanmar Times

24-10-05

A senior official from Canada-based Ivanhoe Mines' Monywa copper project said the company expects to increase its production by more than five times if there is a good enough power supply. Mr Mark L Whitehead, a director at the Myanmar Ivanhoe Copper Co Ltd (MICCL), said that by 2007 the company could increase its annual production to 200,000 tonnes from the current 39,000 tonnes. MICCL is 50-50 joint venture between Ivanhoe Mines and the No 1 Mining Enterprise under the Ministry of Mines, and since 1998 has been producing London Metal Exchange Grade A copper from its deposits near Monywa in central Myanmar.

"The key issue is power. If there is enough power the copper project will be able to increase production," said Mr Whitehead. "We are also waiting for approval from the Ministry of Mines," Mr Whitehead said in a presentation at the YMCA in Yangon last week.

Mr Whitehead said the power problem would be solved when the Yeywa hydropower project is completed in 2007. Yeywa project lies 31 miles southeast of Mandalay and is expected to generate 3550 million kilowatt hours a year in 2007-2008. "Hopefully we will get the approval from the government by 2007 when the Yeywa project becomes operational," he told Myanmar Times.

He said the plan to increase production follows a growing demand for copper and its higher prices in the world market. The joint venture currently produces about 100 tonnes of copper cathode a day, but the lack of power is one of the factors limiting expansion of the mines. The company's factory currently consumes more power than any other in the country.

"We need about 50 megawatts to support the production of 200,000 tonnes," said Mr Whitehead, adding that the Monywa project has firm global markets, including Japan and Thailand. He said the main beneficiary of the project is the Myanmar economy, and that the government has earned US$1.25 billion since the project started production in 1998.

Monywa copper mines have three deposits and MICCL is currently operating at two deposits called Sabetaung and Kyisintaung. The Monywa project employs more than 1000 people, which includes a few foreign expatriates. "Myanmar runs the mine site, and we train everyone from truck drivers to technicians," he said.

In a related development, Ivanhoe Mines is also seeking approval to mine gold from the Modi Taung deposit, about 150 kilometres southeast of Mandalay.

Comments Eric Snider:

It would certainly be a miracle if the Yeywa power project that Ivanhoe's Mark Whitehead is counting on produces electricity before 2010. A news item published in Dec 2004 quoted an official of the China Gezhouba Group, which is responsible for the cement work on the dam, as saying that its work on the project was targeted for completion in four years time. A recent news item said the concrete mixers had just arrived on site! Since it generally takes at least two years from the completion of a dam until the start-up of electric power production, it would appear that projections based on 2007 as the date when electricity will be available are hardly credible.