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Laos’ government will begin fining foreign mining companies as National Assembly members and other government officials question whether the country’s hundreds of projects to dig up gold, copper and potash are beneficial for the country’s economy and environment.

Companies will be fined up to 2 billion kip (US$97,000) for not complying with contracts, rules and laws on excavating and processing minerals, according to a decree issued by Prime Minister Sonexay Siphandone on Wednesday.

Companies that illegally trade and transport minerals will be fined up to one billion kip (US$48,480), the prime minister said. The penalties will take effect on April 1.

Over the last 20 years, the Lao government has given the green light to 1,143 mining projects and 1,336 mineral processing projects covering more than 72,370 square km (27,942 square miles) – more than 3 percent of the country’s total surface area. 

Most of the recently approved projects were for Chinese investors, according to the Lao Ministry of Planning and Investment. 

Some of the larger operations have prompted complaints that not enough local workers are hired, and that local residents are often left without farmland or drinkable water.

In June, National Assembly lawmaker Hongkham Xayakhom urged the government to reconsider its policy of allowing so much mining.

“The economic and financial conditions of our country have not improved,” she said at an Assembly meeting. “Most people are still struggling and our debt is still high.”

‘Lost more than we gained’

A Lao Ministry of Industry and Trade official echoed that sentiment in an interview with Radio Free Asia in September.

“We lost more than we gained from these mining projects,” he said. “They’ve had a dire impact on the environment. The government wants to stop, but in practice that’s hard to do.”

Lao authorities conducted an inspection of all mining operations late last year and found that some companies began operations without doing proper feasibility studies or environmental impact assessments, according to the Ministry of Industry and Trade official.

Many companies intentionally reported a lower concentration of minerals to the government than the actual content because they wanted to pay less tax, he said.

Companies have been found to illegally release chemicals into waterways, have encroached on state land and have sent heavier than allowed trucks out on roads, an official of the Energy and Mines Department of Xaysomboun province, north of Vientiane, told RFA last week.

In Oudomxay province in northern Laos, officials in 2021 shut down seven mining projects and two mineral processing plants belonging to Chinese investors that didn’t comply with contracts and laws, according to a provincial Department of Energy and Mines official.

Minister of Planning and Investment Khamjane Vongphosy told lawmakers in June that the national government has suspended “many new mining projects that benefit less and are not worth the loss of our natural resources.”

Translated by Max Avary. Edited by Matt Reed and Malcolm Foster.

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