Ford informed US embassy staff that “Ivanhoe plans to sell its share of MICCL to ME-1 for $100 million, who in turn will sell the entire company to the [Chinese] consortium for $250 million.”
That same January 2009 cable states, “According to Andrew Mitchell, Ivanhoe Representative in Burma, Ivanhoe agreed to sell its shares to ME-1 because the company is desperate to divest. While it would be easier and more profitable to negotiate directly with the Chinese, Ivanhoe is afraid the GOB [Government of Burma] would block the sale. In early 2008, Ivanhoe and ME-1 agreed on a USD 100 million purchase price. However, ME-1 lacked the money to pay Ivanhoe directly [so] it needed to sell [to] MICCL first (technically selling what it did not own).”
Subsequent developments suggest both Ford’s and Mitchell’s statements to the US diplomatic staff were indeed accurate and Ivanhoe’s assets were first transferred to the Burmese regime before going to the Chinese consortium.
In August 2011, Ivanhoe finally acknowledged that the “independent third-party” had sold its stake in MICCL for $103 million. If Ivanhoe’s 50 percent stake was then resold by the Burmese regime to Norinco and the Chinese consortium along with ME-1’s other half of MICCL for a combined $250 million as Ford said would happen, it would mean the Burmese regime received a $25 million dollar markup for Ivanhoe’s stake in MICCL.
The Voice Journal, citing a leaked government audit, suggests that the Ministry of Mines sold a 50 percent stake in MICCL to Union of Myanmar Economic Holdings Ltd. (UMEH); however, Norinco's subsidiary Wan Bao Mining paid the Ministry of Mines even though the stake was under the control of UMEH.
In February 2007, Ivanhoe Mines announced that it had transferred its 50 percent stake in MICCL to an “independent third party trust” in return for a guarantee that when the trust sells the stake, Ivanhoe will then be paid. Ivanhoe claimed in a June 2010 “statement” posted on the Ivanhoe website: “Since the divestment in 2007, Ivanhoe Mines has had no involvement in the ownership and operation of MICCL and the Monywa Copper Project. The sole purpose of the Monywa Trust is to sell the Myanmar assets acquired from Ivanhoe Mines in 2007.”
In August 2011, when Ivanhoe finally acknowledged that its 50 percent stake in MICCL was sold by the “third party trust,” Ivanhoe made the bold claim in a press release that “Ivanhoe Mines had no involvement in discussions between the Monywa Trust and its service provider with potential purchasers or with the ultimate sale of the interest.”
The Wikileaks cables suggest, however, that both of the aforementioned statements made by Ivanhoe are false. The Wikileaks cables reveal that even after the supposed creation of the “third party blind trust,” Ivanhoe was dealing directly with MICCL, the Burmese regime, Tay Za and potential Chinese buyers for its stake in MICCL, thus violating Western sanctions.
An embassy cable dated September 2008 which again quotes Glenn Ford states, “For the past year, Ivanhoe has been negotiating through regime crony Tay Za with a consortium of three Chinese companies—WanBo [sic] Copper, Norinco Copper, and Aluminum Corporation of China (Chalco)—that want to purchase its contract. Ford informed us that the negotiations are going well and that the Minister of Mines has indicated the GOB will approve the sale. He opined that the consortium's connections to Tay Za play a pivotal role in the negotiations with the GOB.”
Wan Bao Copper and its Burmese subsidiary Wan Bao Mining (Myanmar) Copper Co are owned and controlled by China North Industrial Corp, the same Chinese quasi-state entity that also controls both Norinco International and Norinco Copper.
Subsequent cables which also quote Ford reveal that the Burmese regime vetoed Ivanhoe’s attempts to directly sell to the Chinese and Ivanhoe was instead compelled by the regime to sell its stake back to ME-1, enabling the Burmese state-owned enterprise to in turn sell the stake to the Chinese group at a higher price. A cable dated February 2010 that again quotes Ford explains that Ivanhoe’s dealing directly with the Chinese consortium was halted when “In May 2009, the GOB unilaterally ceased negotiations and announced plans to purchase Ivanhoe's shares itself, according to Ford.”
While Ivanhoe said that it had no direct involvement in MICCL after February 2007, a September 2008 cable indicates that Ivanhoe had been paying for operations at the mine for more than a year after supposedly shifting its 50 percent stake in MICCL to the “blind trust.”
The cable states: “Ford told us that Ivanhoe has been covering the mine's operating costs since 2006, estimated at more than USD 50 million, but it is no longer willing to do so. In April, MICCL halted all production at S&K mine.