Authorities in Wa State earlier this month announced a change in mining tax policy effective from 7th February 2024, with all producers now required to pay a universal 30% tax-in-kind on tin concentrate exports.
The autonomous northeastern state of Myanmar suspended all mining from 1st August 2023, and while extraction of other commodities could resume from 3rd January 2024, mining at Man Maw mine area remains banned. The Man Maw mine area accounts for almost all tin production in Wa State.
Previously, exports of concentrates grading below 20% Sn were subject to a cash tax, however, the Wa State Central Economic Planning Committee (EPC) has revised this so that all tin concentrate exports are subject to the 30% tax-in-kind regardless of grade.
In a document seen by ITA, the EPC wrote on 7th February that the changes were made with immediate effect due to factors relating to financial reserves and the future development of the mining industry in Wa State. At the end of 2023, the EPC confirmed that it had assumed ownership of all mineral rights and announced a restructured exploration permitting and mining licensing process, which were reportedly introduced to increase transparency and improve sustainable industry practices.
The effect of the mining suspension has been muted in recent months as producers stockpiled ores and concentrates ahead of the ban, and the processing of ore stockpiles was allowed from September which allowed continued concentrate exports to China. Concentrate exports to China from Myanmar in 2023 stood at 40,600 tonnes Sn, marking a 15% decrease from the previous year.
The authorities have issued no further updates regarding the tin mining suspension at Man Maw.
Our view: While local traders had predicted a resumption of mining after Spring Festival, ITA is not aware of any changes to the ongoing mining suspension. The policy change may indicate the government wishes to restore its strategic stockpile which has been drawn down by the suspension.
Continued disruption to concentrate supply in China, coupled with a refined tin supply squeeze relating to Indonesia licensing delays, paints a challenging picture for the industry in H1 2024.
