The government has given permission for the Hoang Anh Gia Lai Joint Stock Company (HAG) of Vietnam to conduct an exploration survey for copper deposits on 92 square kilometres of land in Lamam district of Xekong province.
A Memorandum of Understanding for the survey was signed in Vientiane on Saturday by Lao government officials and HAG representatives, witnessed by leaders from both countries.
Among those in attendance were Lao Deputy Prime Minister Somsavat Lengsavad and his Vietnamese counterpart Nguyen Xuan Phuc. The agreement was concluded at the 34th meeting of the Joint Cooperation Commission between Laos and Vietnam.
Director General of the Investment Promotion Department at the Ministry of Planning and Investment, Mr Houmpheng Soulalay, told Vientiane Times yesterday the survey was expected to take three to five years.
If the survey revealed copper deposits which it was deemed would be cost effective to mine, the two sides would draw up a project development agreement before signing any concession agreement.
“We know that there are copper deposits in the area but we don't know their size or how many there are,” Mr Houmpheng said. If the results of the feasibility study are positive, the concession period for excavation could be up to 25 years.
Mr Houmpheng said the government wants the company to set up a local factory to process any extracted ore rather than just trucking it out of the country for processing. He said it was normal for the government to request a shareholding in any mine concession granted to ensure that a fair share of the benefits remained in Laos, rather than going overseas.
Mining is one of the main income earners in Laos. The sector attracts the second largest investment in Laos after power generation. According to a report from the Ministry of Planning and Investment, the government approved US$3.1 billion worth of investments in the mining sector from 2000 to 2010.
As of April 2011, the government had granted approval for 152 companies to operate on 256 mining concessions in total.
One of the major miners in Laos is MMG Sepon, which has a large gold and copper mining operation in the central province of Savannakhet. Another major mining operation is the Phou Bia project in Vientiane province, which exports gold and concentrated copper.
Hoang Anh Gia Lai began operations in Laos in 2008, and is now a major investor in the country. It has investments in various industries, but they are concentrated in rubber, hydropower, bridge and road construction, and other industrial tree plantations.
