Cooperation and Investment in Mining Sector

Foreign investment is particularly sought in the Mining Sector because of its capital-intensive investment combined with scarce domestic financial resources and its high potential for export.

In 1991, the foreign investment in this sector was ranked second in terms of aggregate value (about 25% of the total).

Fiscal regulations such royalty rate, income taxes and incentives in the Mining Sector are widely recognized as competitive by international standard. This indicates the firm commitment and strong support of the Government to pave the way for foreign investment in the sector.

The following location maps of various minerals and fossil fuels such as coal lignite, oil and natural gas show that the country possess huge mineral resources.

Market for fossil fuel in Thailand is tremendous as the country has to import about 60% of its requirements. This would be an area of high prospects for foreign investors. Recently, an agreement was signed with private investors to implement a lignite power plant project in Hongsa (Northwest of Lao PDR) for exporting the electricity to Thailand.

In the short-term, other minerals having high prospects for export would be gemstones which require simple extraction equipment and could be easily transported.

Some medium-and long-term investment opportunities offered by the Ming Sector would be :

The potash production

Vientiane

b). The significant iron ore deposits in the province of Xiengkhouang, the occurrences of base metals (components needed for steel) and the planned hydropower development on the Nam Ngum river, both in the northeast of Vientiane and in Xiengkhoang Province, suggest the region could provide opportunities for both iron ore and steel export;

c). The boloven basaltic plateau in the southern Laos well endowed with both the competitive hydropower potential and bauxite might also offer opportunities for aluminum melting plants.

Having been fully aware that the absence of railways and inadequacy -of the road network are the major constraints for the development of the Mining Sector, the Government is now seeking all financial means to develop the transport sector including the concession arrangement with private investors Mining and transport development could be tied together in a Single package for concession arrangement.