As with other large dam projects, the Myitsone Dam construction would have altered the hydrological characteristics of the river and prevent sediment from enriching the historically highly productive agricultural floodplains downstream.[31] This can affect fertility as far downstream as the Irrawaddy Delta, the major rice-producing area of Myanmar. The government responded that officials had taken sediment accumulation into consideration, and that the Myitsone dam would have capabilities to discharge the accumulated sediment.
Other consequences of flooding by the reservoir include loss of farmland and loss of spawning habitat as some migratory fish will be able to swim upstream after dam completion. This would lead to lost income for fishermen according to Kachin environmental activist groups in exile.[32] On the other hand, research by Biodiversity And Nature Conservation Association (BANCA) contradicts the activists' statement. BANCA's research asserts that commercial fishing is not reported from the project area. But it confirms that some resident aquatic species will be affected by the change in hydrological conditions.[33]
Ecological concerns focus on the inundation of an area that is the border of the Indo-Burma and South Central China biodiversity hotspot. The Mali and N'mai River confluence region falls within the Mizoram-Manipur-Kachin rainforests. Nevertheless, the dam would increase the shipping capacity of Irrawaddy River. The floods, currently an annual occurrence, would only occur once every twenty years. Since the hydropower is the renewable and green energy, the energy produced by the dam would decrease the need for air-polluting sources of energy such as fossil fuels. The construction and the maintenance of the dam would have employed a large number of people.