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Govt, Stakeholders Discuss Mining Sector Licensing System

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Representatives from government, mining business operators, developments partners and non-government organisations met in Vientiane to consult on ways to improve and change mining sector licensing and investment systems in Laos.

Consultation on mineral sector licensing and investment assessment took place from October 3-4, attended by the Deputy Minister of Energy and Mines, Mr. Viraphonh Viravong, Deputy Minister of Natural Resources and Environment Ms Bounkham Vorachith, Australian Ambassador to Laos Mr John Williams, and Acting Country Manager of the World Bank, Mr. Evgenij Najdov.

From 2003 to 2013, the mining sector was expanded considerably, creating jobs for people and becoming a main source of government revenue.

However, mining sector development and operation may impact the environment if there are not good management mechanisms in place, Mr. Viraphonh noted in his opening remarks.

Besides this, it was also observed that there are different conditions regarding different investors and it is known and understood that revenue from the export of mineral products is unequal between the government and private investors.

To solve these issues, the government issued an agreement to temporarily suspend the issuance of licenses for new investors.

Mr. Viraphonh noted that this meeting aimed to find the ways to improve the process of licensing and investment assessment for mining projects to ensure authorities will have considered every issue related to the environment, mining techniques, and finance before signing any contracts.

To continue national socio-economic development, the ministry has set a target for sustainable and environmentally friendly mining development which contributes to eliminating poverty and least development, creating jobs for ethnic people, and ensuring the efficient and beneficial use of natural resources, he said.

The current challenge in Laos is a reduction in mining prices, which is impacting government revenue and national socio-economic development.

In this period, the government is preparing its mining sector strategy plan in line with the national socio-economic development.

This provided a good opportunity for the World Bank to support the ministry in organising discussions on mineral sector licensing and investment assessment in Laos.

According to a press paper from the meeting, in 2015 Laos ranked 134th out of 189 countries in the World Bank’s Ease of Doing Business index.

The Fraser Institute’s Survey of Mining Companies scored Laos’ mineral investment attractiveness 54.4 out of 100, or 77th out of 109 countries and territories assessed.

Perceptions of the government mineral policies’ were scored 51.71 out of 100, or 80th out of 109 countries and territories.

The Fraser Institute study also indicates a large room for improvement and the potential for Laos to advance to 60th place in investment attractiveness if policies and regulations are improved.

The mineral licensing system in Laos is uniquely complicated. The country has a relatively small number of license holders and operators, and limited administrative capacity.

The use of a simplified process, which would be more efficient and safeguard the objectives of the government, is the main recommendation of this report.

Two parallel systems govern the approval of licenses and investments, one under the Ministry of Planning and Investment and the other under the Ministry of Energy and Mines.

Other ministries, such as the Ministry of Natural Resources and Environment and Ministry of Finance, also have input in this process.

 

Source: Vientiane Times