The military-run Myanmar Economic Corporation (MEC) has assumed total control of the Moehti Moemi gold mining development project in Yamethin Township, Mandalay Region, according to sources connected to the project.
The license to operate the mine, which occupies more than 6,000 acres of land, was previously granted to the National Prosperity Gold Production Group (NPGPG), a conglomerate chaired by mining tycoon Soe Htun Shein.
Soe Tun Shein was notorious for making large donations to Buddhist nationalist groups that preached hate against ethnic and religious minorities at a time when violence against Myanmar’s Rohingya people was at its height.
The NPGPG was granted the right to direct the Moehti Moemi gold mining project in 2011, but in 2017 the civilian government led by the National League of Democracy (NLD) ordered a suspension of the project’s operations due to the company’s failure to pay tax arrears.
The government sued Soe Htun Shein in 2018, revoked his mining license, and ultimately brought cases against him for continuing to mine without a license, among other charges and civil complaints, leading to his 2019 arrest and eventual imprisonment.
An NPGPG shareholder told Myanmar Now that the MEC took over the Moehti Moemi project, which had been on hold since 2018, on February 28. He added that the MEC had also ordered all companies associated with the NPGPG to permanently leave the project area.
“Everyone had to leave by the end of February, but the order was only given verbally. There wasn’t any official letter. They said each ‘member company’ of the group must leave,” the shareholder said.
He added that detailed information about the MEC’s planned takeover of the project, including how profits will be allocated according to existing contracts, was unavailable.
“This is a complete change of ownership. The project has nothing to do with the NPGPG anymore, nor with any of its shareholder companies. It belongs solely to the MEC now,” the shareholder said.
Another businessman operating mines in the Moehti Moemi region said he had heard MEC would resume the project and permit companies that meet a certain set of criteria to participate in its operations.
To qualify, he said, a company must not be on a blacklist or have a record of criminal activity, must be a genuine gold production company, and must adhere to rules and restrictions set by the relevant authorities in a given jurisdiction.
Mining companies sought opportunities to work in the development project area even while it was inoperative.
“We tried to get permission to operate in Soe Htun Shein’s project area again a few months ago, as it’s close to one of our own major project sites. However, I gave up when the situation became too complicated,” the mining businessman said.
According to a statement issued by the NPGPG in November 2022, the military council recently acquitted Soe Htun Shein of one of the outstanding charges against him.
However, Soe Htun Shein is still serving time in prison for violating the Public Property Protection Act, a charge carrying a seven-year prison sentence, and is still facing a civil case in a Mandalay Region court for failure to pay a tax debt of more than 1,600 kg in gold.
The NPGPG has petitioned the military council to release Soe Htun Shein from the charges against him, according to sources close to the company. It also reportedly sought to reinvest in the Moehti Moemi project as a joint venture with the MEC.
The MEC, which has now taken over the mining project in its entirety, was founded by the military council in 1997. It is a holding company controlling several businesses in the mineral extraction, commercial production, and communications sectors.
Large regime-controlled holding companies such as the MEC and Myanmar Economic Holdings, Limited (MEHL) have a crucial role in the privatisation process initiated by junta leader Min Aung Hlaing after the coup, often buying state-owned companies that are operating at a loss.
The privatisation process, which resembles practices employed by the earlier military regime under Than Shwe, consists of selling off state-owned companies and assets—controlled by the military since the coup—to private sector businessmen in a possible bid to keep them in the hands of military-connected cronies while still allowing the junta to profit from the sales.
As junta-controlled conglomerates and major sources of revenue for the military regime, MEC and MEHL were among the first entities targeted with sanctions by the United States and other Western governments in order to hold the regime to account after the 2021 coup.