Australian Run Chatree Gold Mine Begins Laying Off Staff after Junta Ordered Closure

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PHICHIT – Australian-run Chatree gold mine in Thailand’s Phichit village has been ordered to close due to a controversial decision.

Chatree’s operator Akara Resources – a subsidiary of the Sydney-based gold miner Kingsgate Consolidated – starts sacking workers, elected district chiefs have made a last-ditch appeal to the government to reverse its May decision, which raised questions about the risks for mining companies operating in Thailand.

Fai Mahasat, the head of one of four districts surrounding the mine, the mine has done nothing wrong. Many people here will suffer and lose their livelihoods. It’s crazy.

Fai and the chiefs of two other district councils told Fairfax Media during a meeting at the mine that 90 per cent of the 19,725 people they represent want Thailand’s only major operating gold mine to stay open.

“This decision came as a shock. No one is prepared for the hardship it will bring and we appeal to the prime minister to reverse his decision,” said Chatnapa Muangpan, another district chief.

Thailand’s Prime Minister Prayuth Chan-ocha, a former army general, has cited a public outcry over health and environmental issues for his order, which shocked foreign companies with investments in Thailand.

Environmental activists and some local landowners had campaigned vigorously against the mine, claiming toxic substances from it had poisoned people, including children.

But the company insists that multiple studies, including by Thai government agencies, have failed to produce any evidence that the mine has damaged the surrounding environment, the health of workers or of nearby residents.

The company has spent millions of dollars supporting locals, including providing scholarships, fresh water systems and financial backing for small projects such as mushroom farming.

And Thailand has reaped tens of millions of dollars more in royalties and taxes.

Until the order came to close, Akara, a company listed on the Thai stock exchange, was planning to invest a further $US1 billion to continue mining on adjacent leases for another 20 to 30 years, raising several billion dollars in revenue, company executives said.

The Thai government, which is stacked with former generals, initially said it wanted to liberalise Thailand’s mining sector, but 27,522 environmental activists opposed revision of the 1967 Minerals Act in a 2015 petition, indicating strong public opposition to mining.

Thai media reports last month suggested the government may be reconsidering the closure decision, given there is no conclusive evidence of hazardous waste or contamination.

Thailand’s Ministry of Industry was also considering the implications of the mine’s closure on Thailand’s free trade agreement with Australia, some media outlets reported.

But the company, which has not been notified of any review, has already moved to end blasting in a 170-metre-deep open-cut pit and extraction of ore in the first week of December, with processing continuing until New Year’s eve.

Cherdsak Utha-aroon, the company’s general manager for external affairs, said the closure “doesn’t make sense” because there are no scientific or health grounds to justify it.

“Yes, there are a handful of people who do not like us. Some have hidden agendas on land deals. They make a lot of noise, which has initiated concern in the government sector,” he said.

Cherdsak said there has been speculation that someone behind the scenes is orchestrating the mine’s closure. “But as far as I can see I don’t see any indication of such a move, so I cannot say,” he said.

The mine was ordered to close for 44 days in January 2015 after tests by the Justice Ministry’s Central institute of Forensic Science found elevated levels of manganese and arsenic in 329 of 600 blood samples collected from people living near the mine.

The tests were conducted after locals complained of being poisoned by the mine.

But the company does not use either of those metals at the mine and earlier studies confirmed that central Thailand had high levels of them in soil and water before the mine opened.

The company uses cyanide in its smelting operations but insists levels are low and that it dissipates in sunlight from a tailings dam.

“A cigarette or cup of coffee may contain similar levels of cyanide to what’s in our tailing facility,” Kingsgate’s chief executive Greg Foulis said in May.

“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 company plans to sack all but about 20 workers and put the mine under a care and maintenance program on December 31, leaving uncertainty around the plant and future rehabilitation works costing hundreds of millions of dollars.

Brennan Lang, the mine’s Canadian-born general manager, said security guards will be deployed at the site to protect the processing plant and machinery, part of the company’s $A1 billion investment in the mine.

For now, the company is blasting 50,000 tonnes of ore a day to squeeze every last dollar out of the mine before its closure, hoping to clear outstanding bank loans.

Kingsgate, a high-flying  $A2 billion company when gold prices were high in 2011, this month rejected a share offer launched by Thai millionaire Chatchai Yenbamroong, while the company was in a prolonged trading halt.

The offer valued the company at only about  $A5 million.

Komsan Kwankaew says he thinks he is too old to find a job in Bangkok, despite the skills he obtained working in Chatree’s metallurgy department for almost 16 years.

He said without his salary from the mine he will struggle to pay the school and university fees for his daughters, aged 22 and 15, and will probably have to move his family to another province so that he can work with his brother who has a mobile stall.

“All the workers feel sad and will for sure have financial problems when they lose their jobs,” he said. “We can’t understand why this is happening.”

By Lindsay Murdoch | Sidney Morning Herald