Ivanhoe Monywa mine evades sanctions via Singaporean bank

Wednesday, 04 August 2010 12:19 Thomas Maung Shwe

Chiang Mai (Mizzima) – Myanmar Ivanhoe Copper, the blacklisted joint venture that runs Burma’s largest mine, uses Singaporean bankers to evade Western sanctions against Burma when it receives payments for copper from the controversial Monywa mine, a copy of a copper sales contract reveals.

Monywa, a city in Burma’s northwestern division of Sagaing, is about 140 kilometres from Mandalay on the eastern bank of the Chindwin River.

An April 2010 contract for the sale of copper produced at the Monywa copper mine obtained by Mizzima shows that the Myanmar Ivanhoe Copper Company Limited (MICCL), which runs Burma’s largest mine, uses a Singaporean bank account to circumvent Western sanctions against Burma when it receives overseas funds used to purchase copper produced at the controversial mine.

The document shows that funds for the purchases are to be sent to “the account of Myanma Investment and Commercial Bank (MICB) with Overseas Chinese Banking Corporation, Singapore, a beneficiary MICCL account at MICB”. Like MICCL, MICB (aka Myanmar Investment and Commercial Bank) is also on the US government’s list of entities blacklisted for their links to the Burmese ruling junta.

Critics have accused the Singapore-based Overseas Chinese Banking Corporation (OCBC) of assisting the Burmese regime in hiding the tremendous wealth it receives from natural gas sales.

Citing confidential sources, the legal rights NGO, Earth Rights International, first reported last year that OCBC is one of two Singaporean banks with which the Burmese regime deposits the billions of dollars it receives from the lucrative Yadana natural gas project involving France’s Total, the American giant Chevron and Thailand’s state-owned oil firm PTTEP.

In a follow-up report released last month, ERI, citing recent documented testimony of Sai Thein Win, a military scientist who defected from Burma, said the hard-currency proceeds stored in Singapore, instead of being used to pay for desperately needed health care or education “enabled the country’s autocratic junta to maintain power and pursue an expensive, illegal nuclear weapons programme while participating in illicit weapons trade in collaboration with North Korea, threatening the domestic and regional security balance”.

Sean Turnell, an economist at Sydney’s Macquarie University and editor of Burma Economic Watch, told Mizzima his internationally recognised research had found that as with natural gas revenues, revenues from state-owned or co-owned mining projects were inaccurately recorded in Burma’s national budget using a deliberately flawed exchange rate.

Turnell said: “All foreign-exchange revenues accruing to state-owned entities in Burma are recorded at the country’s grossly overvalued exchange rate. This has the effect of hiding the vast part of these revenues [more than 90 per cent] from Burma’s public accounts, and allows foreign exchange to be secreted away offshore for the regime’s private use, and at the expense of the people they exploit and misrule. It is difficult to conceive of a worse example of large-scale state larceny, anywhere in the world.”

Canadian Friends of Burma (CFOB) executive director Tin Maung Htoo, a long-time critic of Ivanhoe’s activities in Burma agreed with Turnell’s assessment. The exiled activist and survivor of the August 1988 anti-junta protests told Mizzima he was not surprised to see definitive evidence of what he had long suspected.

“Now we have absolute proof that Ivanhoe’s Burmese operations have resulted in millions of dollars going to a secret offshore junta-controlled hard-currency fund,” Tin Maung Htoo said. “We’re certain that this money is not being used for badly needed social services but instead going for the Burmese generals’ personal use, military weapons buying sprees and clandestine missile and nuclear programmes.”

Mizzima has also found evidence that supports Tin Maung Htoo’s belief that funds from the Monywa mine have been diverted to offshore Singapore accounts since Ivanhoe’s joint venture with the Burmese regime first started producing copper in 1998. A 1999 paper written and presented by then-Indochina Goldfields (previous name for Ivanhoe Mines) president Daniel Kunz stated that MICCL used a Singaporean bank to facilitate the sale of copper produced at the Monywa mine. Kunz also stated that the MICCL bank account in Singapore was overseen by unnamed “trustees”; Kunz again repeated this information in a similar 2001 paper presented at a Colorado mining conference.

Tin Maung Htoo said the documented evidence of MICCL’s using a Singaporean bank to skirt Western sanctions was yet one more reason why the Canadian Government of Stephen Harper should investigate Ivanhoe Mines’ Burmese operations and their controversial exit from Burma. He said “Ivanhoe Mines has conducted themselves in a thoroughly disgraceful manner for many years, Ivanhoe’s senior executives, several of whom were on the board of MICCL, were clearly in a position to be aware that their joint venture was deliberately evading sanctions. Ivanhoe must be investigated for its actions and punished for any legal violations the firm or entities it controlled have committed.”

The activist said that as the Canadian government was a supporter of the people of Burma, he looked forward to a thorough investigation of Ivanhoe adding, “we hope that Foreign Affairs Minister Lawrence Cannon and his colleague International Trade Minister Peter Van Loan conduct a thorough probe of this matter as soon as possible”.

As evidence of what he called Ivanhoe’s “total disregard for human rights”, Tin Maung Htoo brought up what he calls the “despicable pro-junta comments” made by then- Ivanhoe president Kunz in September 2000.
In an interview with a Canadian journalist, Kunz defended the junta, describing the situation in Burma as such: “There are 146 different ethnic groups that have been at civil war for decades and decades. It’s complicated. The military government, unfortunately, is probably the only form of government that can deal with such a complex problem.”

Ownership of Ivanhoe’s 50 per cent stake in MICCL still mired in controversy

Ivanhoe Mines and its controversial chairman Robert Friedland, aka “Toxic Bob”, are accused by CFOB of secretly selling its 50 per cent stake in MICCL, the joint venture that operated Burma’s Monywa copper mine to cronies of the Burmese regime linked to Chinese weapon’s firm Nornico and mining giant Chinalco. A trusted source with insider knowledge of Burma’s recent wave of privatisations confirmed to Mizzima that this was indeed what happened late last year.

Last month the exiled news service Democratic Voice of Burma (DVB) reported that Norinco will give the Burmese mobile military howitzers (artillery pieces) in exchange for copper from the Monywa mine, something Khun Myint Tun, a senior member of Aung San Suu Kyi’s National League for Democracy called “deeply disturbing”. Khun Myint Tun and the NLD also called on the Canadian government to investigate the allegations surrounding Ivanhoe’s departure from Monywa.

If Ivanhoe’s 50 per cent stake in MICCL was indeed sold or given to cronies of the junta this was a violation of Canadian sanctions against Burma. Canada’s financial and investment restrictions targeting Senior General Than Shwe’s regime were significantly strengthened following the crushing of the September 2007 popular uprising led by Burmese monks.

In February 2007, Ivanhoe placed its 50 per cent stake in MICCL under the direction of an ostensibly “independent trust”, which was given the task of selling Ivanhoe’s Burmese assets. Despite repeated requests from media and human rights groups Ivanhoe has so far refused to disclose the individuals or firms that operate or oversee the trust.

In a statement posted on the Ivanhoe’s website on June 30, Ivanhoe denied the trust had sold its stake in MICCL. The firm however refused to show any proof the stake had not been sold, something Tin Maung Htoo told Mizzima “is a clear sign Ivanhoe is deceiving the Canadian public about what happened to its stake in Burma’s largest mine”.

NLD urge Quebec pension plan to probe Ivanhoe’s Burmese activities

Reached for comment on the latest revelations surrounding Ivanhoe Mines, Khun Myint Tun, an exiled NLD member of the parliament elected in 1990 and close ally of Suu Kyi, called on the Quebec pension plan, the Caisse de dépôt, one of Ivanhoe’s five biggest shareholders at 7 per cent, to use its significant holdings to force Ivanhoe Mines to fully disclose what had happened to its Burmese assets. He also urged the Caisse to probe details surrounding the December 2003 arrest of Ivanhoe’s Burmese driver.

Ko Thet Lwin, a driver employed by Ivanhoe Mines was jailed and sentenced to a lengthy prison term after his boss, Andrew Mitchell, a senior Ivanhoe geologist in Burma, demanded to be driven to Suu Kyi’s home.

After driving to Suu Kyi’s lakeside residence both Ko Thet Lwin and Mitchell were detained by the soldiers who act as her jailers. Mitchell, a British national was quickly released, but Ko Thet Lwin, according to his family, was sentenced to seven years in prison for doing what his superior had foolishly ordered him to do. Burma’s New Light of Myanmar later published a story claiming that Ko Thet Lwin was on drugs and had kidnapped his boss; something Khun Myint Tun calls “a total fabrication”.

Ko Thet Lwin was last known to be jailed in Burma’s notorious Insein prison in early 2007. Khun Myint Tun, himself a former political prisoner, and other human rights activists fear Ko Thet Lwin died in the May 2007 massacre of more than a dozen prisoners at Insein by jail guards after the roof blew off the prison during Cyclone Nargis.

Khun Myin Tun told Mizzima: “I urge Quebec Premier Jean Charest and Michael Sabia [Caisse chief executive] and the other trustees of the Caisse de dépôt to use their significant stake in the firm to force Ivanhoe to reveal all they know about the events involving Ko Thet Lwin’s arrest and what has since become of him.”

“I’m sure the people of Quebec would be astonished to learn that their hard-earned wages were being invested in Ivanhoe Mines, a ruthless and unprincipled firm run by the notorious Robert Friedland,” he said.