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Energy, mining output value declines

Vientiane Times, March 16, 2015

A summary report released by the Ministry of Energy and Mines on Friday indicates that the output value of Laos’ energy and mines sector dropped in the first quarter of this fiscal year (2014-15). The ministry’s summary noted that production value in 2014-15 was only 4.22 trillion kip (about US$527.71 million), down 16 percent compared to the same period in the last fiscal year. The report noted that the energy sector generated more than 3.07 billion kWh, about 11 percent down on the same period last fiscal year.“The energy sector has gone down 11 percent while mining has dropped 17 percent,” the ministry reported.

The drop is because the Nam Theun 2 hydropower plant (NT2), which produces 40 percent of the total energy generated in the country, had adjusted its generation output and this time covered only 39 percent. “NT2 reduced its generation because last year its output exceeded the plan,” the report noted. “So it has adjusted the amount generated to maintain water reserves for the next quarter.”

The total energy supply this first quarter was about 3.4 billion kWh, valued at more than 1.71 trillion kip (US$214.2 million). The 3.4 billion kWh includes local generation and imports. Energy exports were 2.3 million kWh and worth about 934.4 billion kip (US$116.8 million), a 17.9 percent drop from the same period last year. Local supply was 1.1 billion kW h at a value of around 778.4 billion kip (US$97.3 million), 41 percent up from the same period last year.

Electricity imports from Thailand, Vietnam and China amounted to 423.9 million kWh at a cost of 202.4 billion kip (US$25.3 million), a 127 percent increase on the same period last year. Power bought from independent producers locally reached 441.8 million kWh, costing 168 billion kip (US$21 million), a 1.3 percent decrease from the same period last year. Mining output was valued at more than 2.94 trillion kip in the first quarter of this fiscal year, the ministry reported. It included 6.05 tonnes of mixed gold and silver ore, 22,695 tonnes of copper ingot, 69,149 tonnes of copper ore, and 26,515 tonnes of potash. Production was 16 percent down from the same period last year because of the cessation of gold production at the MMG LXML Sepon mining project in Savannakhet province.

Another significant factor was the stoppage of production at the Viengphoukha coal mine in Luang Namtha province when the concession agreement ended. An additional factor is the slump in world ore prices since early 2013, especially gold, which was at US$1,342 per ounce in June 2013 and dropped to US$1,279 per ounce in June last year. As of September last year, there were 69 companies operating 107 mining projects, the ministry’s report noted.

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