Overview of Laos’ Mining Industry

Capital Vientiane
Official languages Lao
Recognised national languages French
Spoken languages Lao
Ethnic groups (2005) 55% Lao
11% Khmu
8% Hmong
26% others
Religion Buddhism
Government Marxist-Leninistone-party state
President Choummaly Sayasone
Prime Minister Thongsing Thammavong
General Secretary Bounnhang Vorachith
Legislature National Assembly
Area
Total 236,800 km2 (84th)
91,428.991 sq mi
Population
2014 (Jul) estimate 6,803,699(104th)
2005 census 5,621,000
Density 26.7/km2 (177th)
69.2/sq mi
GDP (PPP) 2014 estimate
Total US$34.400 billion
Per capita US$4,986
GDP (nominal) 2014 estimate
Total US$11.676 billion
Per capita US$1,692
Currency Kip (LAK)

Mining Activity

  • Recently, Laos was ranked as one of the most resource-rich countries in Asia. More than 570 mineral deposits have been identified, including gold, copper, zinc and lead.
  • During 2012, the mining and quarrying sector’s contribution to GDP was 7.0%; during this reporting year.
  • Reserves include: gold 500 tons, copper 8 million tons and zinc 2 million tons
  • The mining sector accounts for 12% of government revenues and 10% of national income with 80% of foreign direct investment.
  • Mining exports contributed 45% of the total exports of the country. In particular, the Sepon mine and the Phu Kham mines have contributed to 90% of the total mining production in the country.
  • Bauxite and Alumina are extracted from the Bolaven Plateau jointly with firms from Australia and China.
  • Copper, gold, and silver are being extracted by the MMG Ltd in the Sepon mine and Pan Aust Ltd in the Phu Kham mine.
  • The Lao government has clear strategies and policies to promote mining in Laos in order to stimulate economic development and to eradicate poverty.

Projects

Number of Projects
Prospecting 20
Exploration stage 38
Feasibility study 3
Mining 35
Total 96
Prospecting stage
Copper and zinc 9
Iron 7
Gold and bauxite 4
Total 20
Exploration stage
Gemstone projects 11
Tin projects 9
Gold 6
Iron 6
Copper and potassium 6
Total 38

Feasibility study stage
Gold 1
Coal 1
Bauxite 1
Total 3
Operating Mines
Government owned 13
Foreign managed 12
Total 25

Main Working Mines in Laos
Lane XangMinerals Sepon (copper) Australia
Phu Bia Mining PhuKham (gold) Australia
Lao-Korean TinMines N/D (tin) Laos
Padeng Industry Public Co.Ltd Kayso (zinc) Thailand
Phialat Gold Panning Phialat (copper) Laos – China
Lao Intl Trade and Service *Houaixay (sapphire) Laos
Gypsum MiningCo.Ltd* N/D (gypsum) Laos

Opportunities

PanAust

  • PanAust has reported strong March quarter production and cost performances at its Phu Kham and Ban Houayxai operations in Laos.
  • Looking forward, PanAust expects a near 25% increase in annual copper production from a 2014 base with no further development capital expenditure. Production is expected to continue to rise steadily over the next several years as the average copper head grade increases and improving ore quality lead to further gains in metallurgical recovery rates.
  • PanAust also ensures the economic and social benefits of its operations are shared with key stakeholders in Laos, including the government and host communities, through employment, training and development, and a broad range of community development programs.
  • The Phu Kham operation comprises a large open-pit mine feeding ore to a process plant with recovery of copper and precious metals into a saleable concentrate using conventional flotation technology. The final product is a copper-gold concentrate grading about 22% to 25% copper, 7 grams/tonne gold and up to 60 grams/tonne silver.

Sepon

  • MMG Limited operates the Sepon Copper Project in Savannakhet province, has completed a restructure to ensure it will continue to deliver strong returns
  • Sepon achieved an annual production record of 90,030 tonnes of copper cathode in 2013, exceeding guidance of 85,000 tonnes. The company expects to produce 93,000 tonnes of copper cathode at Sepon in 2014.

Challenges

  • Institutional capacity is weak and the licensing process is time-consuming and complex. The Lao government is trying to remove constraints by improving investment laws and mining laws, and upgrading institutional capacity.
  • The government is proposing a ban on the export of unprocessed mineral ores similar to many other emerging countries.
  • Detailed information from geological maps regarding mining deposits, mining reserves and mining quality is lacking.

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