Australian firm to give up Thai gold mines, may go to Chile

AP News
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Posted: Dec 14, 2016 5:41 AM

BANGKOK (AP) — An Australian mining company said Wednesday it was shutting down its gold mines in Thailand, laying off more than 1,000 workers and focusing on projects in Chile. It said and will not come back unless it gets an "ironclad guarantee" from the government that it will be allowed to operate without interruptions

A Cabinet resolution and an executive decree — citing environmental and health concerns — have forced Kingsgate to shut down its Chatree mine in central Thailand, owned through a Thai subsidiary, Akara Resources . But recently, a sliver of hope emerged when the Thai parliament passed legislation that could allow mining with a lesser degree of regulation.

Also, the government said separately it will form a committee with powers that could possibly allow gold mining to resume at a later date.

But Kingsgate executives say they are once bitten, twice shy.

"We'd need an ironclad guarantee of tenure," Ross Smyth-Kirk, chairman of Kingsgate, told The Associated Press in a telephone interview. "It's been a disgrace. There's still a lot of gold there still to be taken out, needing expertise of people like ourselves who are prepared to spend big investments to get it out. It's not some tin-pot operation."

He said Kingsgate is planning a new mine in Chile, and hopes to launch operations there after they finish paying off their debt, which now stands at about $10 million, by the end of the year.

"Chile has a government that understands mining and that understands its importance to the economy," Smyth-Kirk said. "We'll see how negotiations go."

Operations at Kingsgate's mine in Phichit province were first shut down in January 2015 after a government body conducting blood tests on nearby residents found high levels of arsenic and manganese. Though the mines were reopened, the government announced again in May of this year they must be shut down by Jan. 1, according to a Cabinet order issued amid claims by residents that chemical and heavy metal runoff from the mine was making them ill.

However, Thailand's parliament last week passed a bill that could in theory allow gold mines to continue operations by suspending a regulatory requirement. The legislation must be signed by King Vajiralongkorn to become law, and would come into effect only four months after the signing.

In an evident move to allay concerns of residents and activists that the new law could give Kingsgate a chance to reopen, Prime Minister Prayuth Chan-ocha on Tuesday issued an executive order halting all gold mining in Thailand from Jan.1.

However, the order also mandates creating a new committee to manage and oversee the country's mineral resources, with power to allow gold mining to resume at a later date. Prayuth acted under Article 44, a provision giving him absolute power that was part of an interim constitution adopted after the army seized power in May 2014 from an elected government.

Given the series of seemingly contradictory developments, Kingsgate's Smyth-Kirk said his company cannot work in Thailand anymore and is letting go of more than 1,000 employees and contractors.

"We will want to be compensated," he added. Kingsgate says there's no evidence of substantial health or environmental damage caused by its activities.

Environmentalists also remain wary, and have vowed to protest any move to resume mining.

"This (executive) order is a good thing but we don't know how long it will last," said Penchom Saetang, director of a Thai environmental group protesting the mines. She said that if the bill easing regulations becomes law, the mining company could resume operations and mine even more than before.