A trial operation will begin in July on the giant Tagaung Taung nickel mine in northern Burma run by the world’s largest steel manufacturer, but environmentalists have warned of “toxic” consequences.

The deal, signed in July last year, becomes the largest cooperation project for mining between China and Burma. Overseeing the operation will be Chinese metals giant Taiyuan Iron and Steel Group and the China Nonferrous Metal Mining Company (CNMC).

The two are set to sink around US$800 million into the project, located just 200kms from the China border, which will generate some 85,000 tonnes of nickel-iron each year to feed China’s soaring demands for steel.

The dwindling global reserves of nickel has pushed nations like China, the world’s leading steel producer, to rush for control of resources, according to environmentalist Steve Green. Nickel is a key component in steel manufacturing.

He said however that one of the main problems with such projects in Burma is the absence of any post-mining remediation, particularly the lack of tailings management where the waste from the manufacturing process is safely disposed of.

“This means there will be toxic downstream contamination for generations to come,” he said, as the chemicals used in the process seep into waterways. He added that such a large-scale project could also result in the confiscation of local land by the Burmese military.

Taiyuan, the largest steel manufacturer in the world, and CNMC will operate the mine for two decades. Smelting and “service” facilities are already under construction there.

Chinese weapons giant Norinco last year signed a lucrative deal to operate the Monywa copper mine, also in Sagaing division.

Matthew Smith, senior consultant at EarthRights International, told DVB that in both cases, the likelihood of an Environmental Impact Assessment (EIA) being made public prior to commencement of the projects was slim.

Although the Export Import Bank (EXIM) of China provided funding for Tagaung Taung, meaning an assessment may well have been done in keeping with its own environmental regulations, ERI claims that “the chances are no one’s seen it”.

Of Norinco, which reportedly won the contract following the sale of heavy artillery to Burma several weeks prior, Smith said: “Unfortunately Burmese law doesn’t require an EIA of international standards and there’s no evidence the company is guided by any sort of enlightened self-interest.” He added that the “same concerns would apply” for the Tagaung Taung mine.

China has been accused of outsourcing its pollutive industries to countries like Burma where environmental regulations are not enforced by the state. China is battling rising energy demands with rapidly depleting domestic resources.