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Lao mining industry booms as global economy recovers
The Lao mining industry has seen a surge in earning s on the back of the global economic recovery as prices for mining commodities on the world market continue to rise.
According to a report from the Ministry of Planning and Investment, the Lao mining industry earned revenue of about 6,900 billion kip (US$862 million) in the first six months of this fiscal year, a 58 percent increase compared to the same period of the previous financial year.
The massive increase in output value was made possible by huge jumps in prices for gold and copper on the world market as the economies of nations around the world recovered from the global recession. Expanding economies over the past year have meant greater demand for industrial raw materials such as copper and in turn rising prices for the commodities.
At present the price of copper is about US$8,000 to US$9,000 per tonne, compared to about US$3,500 per tonne in early 2009. The current price of gold is about US$1,428 per ounce.
The rising value of minerals and metals has made the mining industry a major driving force behind the growth in Lao exports, accounting for about 54 percent of the total US$836 export value in the first six months of the 2010-11 fiscal year.
Copper exports alone covered 28 percent of the total export value over that period.
There are currently 152 local and international mining companies operating in Laos, 70 of which are domestically owned and the remainder international enterprises.
The government has granted approval for mining companies to operate on 256 mining concessions across the country over the past few years.
One of the major miners in Laos is Sepon Gold and Copper Mining, which operates in the central province of Savannakhet. The company has the capacity to produce about 67,000 tonnes of copper a year and is currently undergoing expansions to increase that figure to 80,000 tonnes per year.
Another large mining operation is the Phou Bia project in Vientiane province, which exports gold and concentrate copper.
According to another report from the Ministry of Planning and Investment, the mining sector attracts the second most investment in Laos after power generation. The government approved US$3.1 billion worth of investments in the mining sector from 2000 to 2010.
The government suspended approval for mining investments last year after learning that a number of projects had stalled and were not progressing as scheduled. The government also ordered the suspension of operations at mining projects deemed to be causing detrimental environmental and social impacts.
Officials said the Department of Energy and Mines is boosting its capacity to ensure effective management and supervision of mining projects around the country.
vientiane times
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