May 19, 2016 / 12:25 PM / 3 years ago

Kingsgate CEO says arsenic, manganese never used at Thai mine

BANGKOK (Reuters) - Thailand’s only working gold mine has never used the toxic substances found in people living nearby, the chief executive of the mine’s Australian owner said on Thursday, expressing shock at a government order to shut down.

Kingsgate CEO Greg Foulis, of the parent company of Thailand's mining company Akara Resources, attends an interview with Reuters in Bangkok, Thailand May 19, 2016. REUTERS/Jorge Silva

The snap decision by the Thai cabinet to close the Chatree mine would hurt foreign investor confidence, said Greg Foulis, Chief Executive of Kingsgate Consolidated.

Thailand’s cabinet announced the closure last week, but authorities have yet to explain their reasons to Kingsgate or its local unit Akara Resources, Foulis said.

Farmers and villagers say the mine has poisoned residents, crops and livestock. In January 2015, a government team said that more than 300 people living near the mine tested positive for arsenic and manganese.

Local people and environmentalists have also complained of cyanide contamination from the mine’s refuse, or tailing, pond.

“We do not use arsenic or manganese in our operation,” Foulis said, speaking to Reuters in the Thai capital. Cyanide levels were low and none had escaped the tailing pond, he said.

“A cigarette or a cup of coffee may contain similar levels of cyanide to what’s in our tailing facility.”

Arsenic and manganese were naturally occurring and the company had found similar levels in people it tested people 50 km (30 miles) away from the site, Foulis said.

“The government, ourselves, and independent auditors, nobody has found any contamination that is attributable to our operation,” he said.

Minority groups may have had an outsized influence on the government decision, he added.

“We accept that there’s always going to be minority groups that don’t want certain businesses, industries and investments,” he said. “However, the government still hasn’t found a mechanism to deal with protests or interest groups.”

The mine has 1,000 direct employees. On Friday, local media reported thousands of workers and residents living in the area gathered at the local government offices to protest the decision to shut it down. Worker leaders accused NGOs and academics of spreading false information on the mine, the Bangkok Post reported.

Over 15 years, Kingsgate had spent around $1 billion on the mine, Foulis said. It would spend about the same again if it were allowed to operate the concession through to its expiry in 2028.

The mine was a major contributor to the local economy and would pay around $100 million in royalty and taxes over the 12 years to the end of the concession, he said.

The firm has yet to recoup the investment it made to expand the mine five years ago, when it took on an A$80 million ($60 million) credit facility, Foulis said.

Funds invested in Kingsgate may be reluctant in future to risk exposure to Thailand, he said.

“The investment landscape has changed unexpectedly on them,” he said. He hoped to better understand the Thai government’s decision through meetings on his trip to Thailand.

“In the end, what this comes down to is a broader philosophical question,” he said. “The government just decided it doesn’t want mining.”

Additional reporting by Juarawee Kittisilpa; Editing by Ruth Pitchford and Richard Pullin

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