Slump in global ore price reflected in Lao mining output
Slump in global ore price reflected in Lao mining output
A downturn in the world ore price caused the output value of Laos' energy and mines sector to drop by more than 3 percent in the 2013-14 fiscal year compared to the previous year.
A summary report released recently by the Ministry of Energy and Mines states that production value in 2013-14 was only 18.65 trillion kip (about US$2.33 billion), down 3.38 percent on the previous year.
However, the overall figure disguises disparate components, as the production value of the energy sector surged by 10.44 percent while that of the mining sector fell by 8.88 percent, as reported by Energy and Mines Minister Mr Soulivong Daravong to the Deputy Prime Minister in charge of economic affairs, Mr Somsavat Lengsavad.
The sharp drop in production value in the mining sector was largely caused by the cessation of gold mining at the MMG LXML Sepon gold and copper plant, when it was impacted by the falling global ore price.
Another significant factor was the stoppage of production at the Viengphoukha coal mine in Luang Namtha province when the concession agreement ended.
The slump in ore prices affected gold, potash and copper, and no new mining ventures replaced the lost production.
The gold price began falling in the third and fourth quarters of fiscal year 2012-13, dropping to US$1,200 - US$1,300 per ounce, and significantly impacted gold production in Laos.
The ministry reported that the mining sector produced about 30.01 tonnes of gold and silver in 2013-14 – an increase of 36.8 percent on 2012-13, but the market price dropped by about 29.15 percent.
Copper ingot production in Xepon district, Savannakhet province, was about 87.02 tonnes, down by 1.36 percent on 2012-13, while the market price dropped by 10.65 percent.
Copper ore output was about 228.413 tonnes in Xaysomboun province – an increase of 12.76 percent, but the market price rose by only 0.79 percent.
Lignite production totalled 23,690 tonnes – down by 94.84 percent on the previous year, while the price plummeted by 45.58 percent. Anthracite output stood at 125,894 tonnes – down by 37.27 percent, while potash production dropped by 61.3 percent to 236,290 tonnes.
Both local companies and overseas investors operate mines in Laos, including investors from Asean countries.
As of September this year, there were 69 companies operating 107 mining projects on a total area of 274,663 hectares in Laos, the ministry's report noted.
Mining operations fall into two main groups: one group excavates ore and processes it. This group comprises 50 companies operating gold, copper, coal, lead, potassium and gypsum mines.
Companies in the other group are preparing to begin excavation and the construction of processing factories. This group comprises 19 companies who will operate gold mines in Vientiane, Attapeu and Borikhamxay provinces.
vientiane times
