The nickel factory, which was a $855 million investment by the Chinese-owned China Nonferrous Metal Mining and Construction, is located in Tigyaing township, Sagaing Region, Myanmar. It was captured by the PDF of the National Unity Government (NUG) from the coup army at the end of last July. Discussions are being held between the NUG and China regarding the future of the factory, according to the spokesman for the NUG president's office.
U Kyaw Zaw, the spokesperson for the NUG president’s office, confirmed that about 50 soldiers of the coup army stationed at Myanmar's largest nickel production project offered to surrender to the PDFs during the last week of July. U Kyaw Zaw said that the Chinese side contacted the NUG to discuss the surrender and the factory's future. The PDF provided security for the surrendering soldiers to leave the vicinity of the factory.
The spokesperson for the NUG president’s office did not specify who intervened from the Chinese side but stated that the People's Republic of China had contacted the National Unity Government. The nickel project in the Tagaung region, bordering the revolutionary strongholds of Tigyaing township, Sagaing Region, and Thabeikkyin township, Mandalay Region, has been operating under a 20-year contract since 2008 under a profit-sharing system between China Nonferrous Metal Mining and Construction and the Myanmar government's No. 1 Mining Industry. The project is expected to produce 85,000 tons of nickel per year.
U Kyaw Zaw said that the revolutionary forces are providing security around the area after the army's retreat. He mentioned this is in line with the NUG's policy of recognizing and protecting contracts and international investments signed prior to February 1, 2021, before the military seized power. The NUG has sent a letter to the Chinese government stating that it will protect projects agreed upon with the official governments, not the coup army, and is coordinating security for the regular operation of the nickel factory project. U Kyaw Zaw said that they are providing security for Chinese people.
Mao Ning, a spokesperson for the Chinese Ministry of Foreign Affairs, said at a press conference held on July 25 that China's projects in Myanmar should not interfere with business operations and the security of Chinese citizens.
On July 25, a police outpost on Tagong hill was attacked and captured by the Mandalay Region No. 3 Special Battalion and Thabeikkyin Township People's Defence Team, seizing 12 weapons and ammunition, the Ministry of Defence of the National Unity Government announced on July 27.
Before the seizure of power, the project was operated by more than 1,500 employees, including Chinese employees. A coup d'état and the arrest of some factory workers claiming to be part of the revolution disrupted operations. Residents said that the factory was able to continue operating even though the staff was slightly reduced due to some fleeing. From the start of production until 2018, more than 300,000 metric tons of ferronickel have been produced. According to a report released in October 2021 by the Australia-based Publish What You Pay group, $121 million flowed to the military from the Tagong nickel project in the 2020-21 financial year.
China has significant investment projects in the Sagaing Region, such as the Tagong Nickel Project and the Lepan Daung Taung Copper Project, which are strongholds of revolutionary groups.
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