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to be one of the few remaining countries
in the world that has favourable geology
in under-explored areas containing high
potential for world-class undiscovered
gold and copper ore bodies.'
It's the sort of optimism that both
MMG and PanAust seem to share.
Brisbane-based PanAust, for
example, has continued to raise
production estimates since the mine
began work in 2008, recently reporting
that output this year will be around
65,000 tonnes, which is up from the
60,000-tonne gure of 2011, and is
likely to rise to 75,000 tonnes by 2014.
Upgrades like a $90 million project
to improve ore processing rates and
better access to the adjacent 'Nam San'
copper-gold deposit, a pre‐feasibility
study underway at the Phonsavan
Copper‐Gold Project, and ongoing
exploration of the tenement suggest that
copper production will grow over time.
It's a similar story for MMG's Sepon
mine, the rst major commercial
private-sector mine established in
Laos, which opened in 2002 and
expanded in 2011, and of which the
Laos Government has 10 per cent
equity. Since work began, the mine has
produced 575,000 tonnes of copper
as cathode and the company recently
con rmed that production this year
would come in near 80,000 tonnes.
Positive results from exploration,
and the fact that 'Sepon Copper' can
now be traded on the London Metals
Exchange (LME) as part of 80 'Grade
A' copper brands conforming to LME
speci cations on quality, shape,
and weight, have only added to the
company's long-term prospects.
'There's still a lot of copper to be
found in Laos and it's never been
properly explored, but until current
exploration activity turns into metal, we
believe output will remain fairly steady,'
said Matt Fusarelli, Head Researcher at
'However, there's no doubt more
mines will happen over the next decade.'
Certainly there's wide agreement
that copper, and mining in general,
has been very good to Laos so far. A
report from the International Council
on Mining and Metals (ICMM) last year
found that overall poverty levels in Laos
have fallen signi cantly this century
as mining's impact has grown, adding
that both copper mines have boosted
incomes at the local level, directly or
indirectly supporting around 30,000
people -- or ve per cent of the national
workforce not engaged in agriculture
-- and make substantial contributions
to community development, especially
in terms of training and employment
opportunities for women.
Just as importantly, the taxes,
dividends and other levies paid to the
government by the two mines since
2004 are estimated to be over $1 billion
-- in stark contrast to 2003 when the
gure was just $1 million -- and will add
10 per cent to GDP annually over the
next 14 years.
If copper's future here looks rosy, it's
also clear that working in a tropical,
developing country comes with its own
Poor infrastructure, such as roads,
is a major problem, and the other
is the sheer burden of working in a
tropical environment. According to
both companies, heat, high humidity
and extensive wet seasons have to be
taken into account when designing and
building mines in Laos, but they can
also add substantial costs to ongoing
maintenance, as well as production --
an issue PanAust highlighted last year
when it announced a temporary mine
closure due to torrential rain.
'There are a lot of challenges for
miners in Laos,' said Mr Fusarelli.
'On top of being a remote country, the
terrain is dif cult and the roads are
Laos was also one of the most
bombed countries during the Vietnam
War and it now faces extensive problems
in identifying and then dealing with
unexploded ordnance. Savannakhet,
where the Sepon mine is located, is the
most heavily bombed province in the
country, and MMG devotes considerable
resources to its UXO program of bomb
clearance, employing 400 full-time staff
and hundreds of contractors, many of
them women, to search approximately
1000 hectares per year. Nearly 30,000
bombs were destroyed in 2011.
Operating in a socialist country can
add another layer of complication, as
well. While the Laos PDR Government
has prioritised investment in mining as
part of its National Growth and Poverty
Eradication Strategy, any activity is
regulated by the 2008 Mining Law
that sets out rigorous requirements
for resource companies, including the
licensing process, and operational
obligations particularly in relation to
environmental sustainability, land use
But mining companies have not so
far been deterred by the challenges of
operating in Laos, indicating a bright
future for this tiny resource-rich
Exploration in Laos.
MMG's copper operations.
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