The Chatree gold mine in central Thailand. Photo: Craig Skehan Thailand has reaped tens of millions of dollars in taxes and royalties from Thai Stock Exchange-listed Chatree. Photo: Craig Skehan
Bangkok: The chairman of Australian gold miner Kingsgate says the forced shutdown of its mine in central Thailand has sent a “horrendous” message to potential foreign investors in the military-run nation.
“Foreign direct investment is already way down and, in the mining sector, there is absolutely no chance of anybody else going there,” Ross Smyth-Kirk told Fairfax Media as the company prepared to sack more than 1000 workers from the Chatree mine, 280 kilometres north of Bangkok.
Thailand’s Prime Minister Prayuth Chan-ocha used his dictatorial powers to order the mine operated by Kingsgate subsidiary Akara Resources to shut down on New Year’s Eve, shocking foreign companies based in Thailand.
It was the first time Mr Prayuth, a former general, had used his sweeping powers against a foreign company since he led a coup to topple the country’s democratically-elected government in 2014 after months of political instability.
Mr Smyth-Kirk said it would take an “ironclad guarantee” from Thailand that his company would be allowed to operate without interruption before it again invested in the country.
The open-cut mine will be put under a care and maintenance program on January 1.
Its closure comes as the Turnbull government has been negotiating with Thailand to strengthen the Thai-Australian free trade agreement.
Australian officials have raised Kingsgate’s treatment in the talks.
Mr Smyth-Kirk said he hesitated to use the word “farcical” to describe how the company had been treated “because I still have to talk to them, to negotiate”.
“We have been treated like some kind of pariah,” he said. “We have complied with every law they have come up with – some have been quite unreasonable – yet we are still treated as if we haven’t complied.”
Asked about the mine’s future, Mr Smyth-Kirk said he did not know, despite there being a lot of gold still at the site. “We wake up every day and there is something new,” he said.
Last week, the government’s military-stacked Parliament passed a mineral bill allowing gold mines to operate legally in the country, despite an announcement in May that all gold mines must cease operation by New Year’s Eve.
But late on Tuesday, Mr Prayuth ruled that the mine must cease operation on January 1 pending the establishment of a national mining commission to oversee Thailand’s tiny mining industry.
He also ruled that gold mines must rehabilitate mining areas or else their operators could face fines and/or a year in jail.
For months Mr Prayuth’s government had been sending confusing messages about the Chatree mine, which had been the target of a sustained campaign by environmentalists.
In May Mr Prayuth cited a public outcry over health and environmental issues for ordering the mine’s closure.
But Akara insisted that multiple studies, including by Thai government agencies, had failed to produce any evidence that the mine had damaged the environment, the health of workers or nearby residents.
Mr Smyth-Kirk said the mine’s closure would have a devastating impact on district and provincial councils, local businesses and families in what was one of Thailand’s poorest areas before the mine opened there in 2001.
“That is the saddest thing of all,” he said.
Mr Smyth-Kirk described coverage of accusations against the mine in the Thai media as “outrageous”.
“If you believe them we were responsible for 40 to 50 deaths,” he said. “But nobody has come up with any evidence that even one person became sick.
“Perhaps it would have been better if we had had an environmental issue and we could have been seen to have fixed it. But we simply didn’t have one.”
Mr Smyth-Kirk said there had been suggestions of a behind-the-scenes plot to force Kingsgate from the country so others could operate the mine.
“I have seen no evidence of that,” he said. “I can’t really speculate.”
Thailand has reaped tens of millions of dollars in taxes and royalties from Thai Stock Exchange-listed Chatree.
Akara had been planning to invest a further $US1 billion ($1.34 billion) to continue mining on adjacent leases for another 20 to 30 years, raising several billion dollars in revenue, company executives said.
Kingsgate now plans to open a mine in Chile.
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