Working towards greater community control over land, forests and natural resources

New miners to come under scrutiny in Laos

Vientiane Times July 20, 2016

Laos will carefully select companies that are financially sound and have extensive experience in the mining sector before allowing them to set up projects, which will be closely monitored. These requirements will be imposed after several companies have failed to comply with the regulations concerning investment in Laos.
Speaking at a meeting last week on the energy and mines development plan, Deputy Minister of Energy and Mines Mr Thongphat Inthavong said many investors lacked experience and did not submit the correct information when applying for permission to operate a project. The meeting was chaired by Prime Minister Thongloun Sisoulith.
Some investors had insufficient funding which meant the project was poorly carried out and did not comply with the required standards. There had also been delays, harmful impacts on communities, the environment and safety, and some operators did not pay taxes to the government or local communities as required. There had also been disputes among shareholders, Mr Thongphat said. Other problems included feasibility studies and assessments of mining resources that were not carried out to international standards. This meant that mining output was lower than that stated in the plan submitted to the government.
In other cases, projects were delayed when investors reserved parcels of land while they sought funding and shareholders, Mr Thongphat added. To address these issues, the Ministry of Energy and Mines and the mining sector in general will partner with other sectors to enforce measures that address the problem of failing companies. The measures include approval of a registration certificate, mining project management, and a suspension order when companies or projects fail to make any progress or have a harmful impact on local communities or the environment. The mining industry is a priority sector for socio-economic development through the revenue it generates and is an important driver of economic growth. It also supports community development and poverty alleviation.
Up until this year, the government has given approval to 163 domestic and foreign companies for the prospecting and exploration of mineral deposits. Twenty companies are conducting feasibility studies, 22 are in the process of building infrastructure, and 58 companies are either exploring for minerals or extracting them, according to a report from the ministry. The total number of companies approved at the central level is 263, while local authorities have approved 369 companies.
From 2011-2015, some 20 types of mineral were extracted, including potash, bauxite, lignite, copper ore, gold ore, limestone and tin ore, with output averaging about US$7,734 million.
The government has received about US$1,194 million from taxes paid by miners in the form of concession payments, royalties, salary tax, dividends and value-added tax.
Mining companies have benefited local communities through infrastructure development, especially building roads, hospitals and schools, and creating job opportunities.
In 2012, the government suspended the approval of new mining projects and began carrying out inspections in an attempt to properly regulate the industry. Some companies were ordered to cancel their agreements by the end of last year.


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