PanAust opens second Lao operation at Ban Houayxai
Phu Bia Mining officially opened an open-cut gold and silver mine on Friday, at the mine site in Ban Houayxai, 25 kilometres west of their existing gold and copper operation at Phu Kham.
The opening ceremony was attended by Deputy Prime Minister Somsavat Lengsavad and other high ranking officials, Australian Ambassador to Laos Ms Lynda Worthaisong, and the management of Phu Bia Mining.
Mr Somsavat Lengsavad ( third right ) and Mr Gary Stafford ( left ) tour the new mining operation at Ban Houayxai.
The opening of the Ban Houayxai site is a significant milestone for the company, expanding its operations and increasing yields of gold and silver, with the mine set to generate significant royalties for the Lao government and contribute to development in Laos.
In a decade or so since PanAust acquired Phu Bia Mining, the company has grown to become a major corporate presence in Laos, employing large numbers of local staff, advancing vocational training and skill development in the country, and sourcing various materials and supplies in local communities surrounding the mine.
According to the company, it has cost US$200 million to prepare the necessary infrastructure and improvements at the Ban Houayxai site before operations could commence, but now that it is operational, production is expected to be ramped up rapidly.
The open-cut operation will extract about 4 million tonnes of ore every year, to be processed in a carbon-in-leach processing plant. The company is targeting a yield of 100,000 ounces of gold and 700,000 ounces of silver over the expected nine year lifetime of the mine.
The initial investment is expected to pay for itself within the first two years of operation, with the project set to deliver significant revenues to the government and people of Laos, as well as generate significant employment both directly at the mine and the various service and mine related businesses which see flow-on benefits from the operation.
PanAust Managing Director Mr Gary Stafford said the favourable investment climate in Laos and the commitment of the company to expand its operations gave PanAust and Phu Bia Mining the confidence to invest over US$900 million in Laos since beginning operations in the country.
Speaking about the existing operation, Mr Stafford said “We expect to increase annual copper production at the Phu Kham copper-gold operation to between 70,000 and 75,000 tonnes by 2014. We have discovered an exciting new deposit very close to Phu Kham that may see production levels increase still further within the next five years.”
“Elsewhere, we are also continuing studies on the potential of the Phonsavan copper-gold project in Xieng Khuang province.”
Minister of Energy and Mines Mr Soulivong Daravong also spoke at the ceremony, highlighting the significant benefits the opening of the mine would bring to Laos. He said Laos aims to escape Least Developed Country status by 2020 and “to achieve this, the economy needs to grow by 8 percent annually over the next decade”.
He said the government h as laid out the path for growth in the seventh National Socio-economic Development Plan for 2011 to 2015. “The mining sector will remain an important source of growth for Laos in this period and Phu Bia Mi ning is a leader in the sector.”
“The opening of the Ban Houayxai operation will strengthen the company's contribution to Laos in terms of direct and indirect economic contributions and community development programmes,” Mr Soulivong said.
PanAust Chairman Mr Garry Hounsell said the board of PanAust decided to proceed with the Ban Houayxai gold-silver operation in March 2010. “One of the reasons for our decision was the positive investment environment in Laos,” he said.
“The Ban Houayxai operation provides us with an opportunity to further contribute to Laos. This mine has been built to the highest standards and will be operated based on world best practices,” he emphasised.
The Ban Houayxai operation now employs about 550 Lao staff directly at the mine since starting operations, and will generate many more jobs with mining service companies based in Laos.
Pa nAust is an Australia-based copper and gold producer with operations in Southeast Asia and South America. PanAust's key producing assets are the flagship Phu Kham copper-gold operation and now the new Ban Houayxai gold-silver operation. Both are located within the company's 2,636 square-kilometre exploration and mining lease in Laos.
