NPC entered into a 5-year contract with the government to mine for gold in the resource-rich Moehti Moemi area in 2011, during Union Solidarity and Development Party president U Thein Sein’s administration. Under that agreement, NPC was to pay over 70 viss of gold per month to the government in exchange for the right to mine for gold in the area, starting from April 2012.

Despite two prior opportunities to do so however, NPC has not been able to pay back its gold debts to the government. On February 17, the company received notice that its permit to mine for gold in Moehti Moemi will be revoked. 

“As they failed to honour their obligation, the permit was cancelled. So, they no longer have the right to work there. However, they are still liable to pay the gold debts to the government in accordance with the stipulations in the agreement,” U Thein Soe said.

Declining production

For its part, NPC said it failed to pay what it owed because actual production of gold fell short of estimates. 

In a statement, NPC said that if given a longer contract period during which it can improve its production rate, the gold debts can eventually be repaid. 

The company in 2013 had requested a 3-year extension of the contract, citing difficulties in producing enough gold to pay the government. The extension was approved by the President’s office. Under the new contract, NPC must pay a total of 5.5 tonnes in gold to the government by September 2019, when the contract expires. So far, the company has only repaid 330 viss of gold to the government.

As a result, the ministry suspended production at NPC last November, resulting in protests from about 500 NPC workers at Yamethin on November 30, before the company’s permit was revoked entirely.

NPC will attempt to negotiate with the ministry on settlement of its debts, failing which the case will be settled in court.

Gold debt

A report on all Moehti Moemi gold miners which have so far failed to pay gold owed to the government will be submitted in the upcoming Parliament session.

 “We will submit the report to the Hluttaw about our findings and conclusions including a review on the handling of the situation by the ministry,” said U Thein Swe, chair of the committee. The committee in January conducted a survey of the gold mines operated by NPC, Shwe Moe Yan Co and Asia Global Co in cooperation with the ministry and company officials, he said. So far, only NPC’s permit has been revoked, The Myanmar Timesunderstands. 

“NPC is going against the law by not paying back its debt. The ministry will be able to reconsider their permit only after they pay what is payable,” Amyotha Hluttaw Resources and Environmental Conservation committee member U Saw Soe Myint told The Myanmar Times.

Source: https://www.mmtimes.com/news/government-revokes-miners-permit-failure-pay-gold-debts.html