MINISTRY DENIES SETTLEMENT TALKS WITH MINING FIRM

>> The Industry Ministry has denied social media posts claiming that Prime Minister Prayut Chan-o-cha ordered the ministry to spend 30 billion baht compensating the Australia-based gold mining firm whose operations were suspended under a regime order last year.

Kingsgate Consolidated Ltd, the parent company of Akara Resources Plc which operated the Chatree gold mine in Phichit, has entered the arbitration process against Thailand under the Thailand-Australia Free Trade Agreement (Tafta).

The company said the government’s order was unlawful and caused substantial damage to the company.

Referring to social media posts claiming Thailand has agreed to pay 30 billion baht to the company to settle the case, permanent secretary for industry Pasu Loharjun said the information is not true.

“I want to confirm the case is still in the international arbitration process. No ruling has been given. There is no consideration of any compensation at all,” said Mr Pasu, who also chairs a panel settling disputes between the country and the firm.

Preparations are being made for the arbitration process, he said, adding state agencies and legal advisers have been working with the committee to lay out plans to fight the case.

They are working hard for the benefit and fairness for the country, people and communities affected by the mining operation, Mr Pasu said.

Mr Pasu’s remarks came after social media posts warned people they should be aware that Gen Prayut has ordered the permanent secretary for industry to negotiate with the company about accepting 30 billion baht as compensation for the damage.

The move, the posts pointed out, comes after the prime minister “mistakenly” invoked Section 44 to order the suspension of the mining firm’s operations.

The government has in fact stood by its decision, saying residents were upset about the effects the mines were having on the environment and their livelihoods.

In 2016, the NGOs and villagers who live near the mine filed complaints against Akara, saying the people’s health was adversely affected by the mining operation.

The company insisted it has done everything required of it legally and that its operations have not damaged the environment or residents’ health. It also sought university studies to back its argument that its mining activities have not proven harmful.

The National Council for Peace and Order in December 2016 ordered the company to stop mining until the conflicts with the communities were resolved.

Akara said ceasing mining would mean losses of at least 39 billion baht for the company.

Since December 2016, Akara has laid off 1,000 employees, leaving 36 to work on machines and equipment maintenance. The job losses hit the local community hard and the ongoing dispute has divided locals.

The company holds seven licences to continue mining until 2028. Based on the company’s exploratory findings, an estimated 40 million tonnes of gold ore are underground.

Executive chairman Ross Smyth-Kirk said late last year that despite its best efforts, the company had been unable to achieve a settlement of its claim against Thailand for unlawful expropriation of the Chatree gold mine.

The arbitration proceeding is needed to recover the substantial losses the company has suffered, he noted.