March 2011 THAI MINING LEGISLATION 1. Laws Governing Exploration and Mining The principal law is the Minerals Act (1967), last amended in 2002 by Minerals Act No. 5. The act governs onshore and offshore exploration, mineral production, mineral trading, oredressing, transport and export of minerals, other than petroleum. The Department of Primary Industry and Mining (“DPIM”) is empowered to administer the Minerals Act and to issue ministerial regulations. DPIM also provides technical assistance in exploration, mining, mineral processing and metallurgical activities. It is under the Ministry of Industry (“MOI”). Another law, the Mineral Royalty Rates Act (1966), prescribes the rates of royalties to be assessed for different kinds of minerals. The environmental law is administered by ONEP in the Ministry of Natural Resources and Environmental (“MNRE”). Prior to a ministerial reorganisation in 2001, the name of DPIM was Department of Mineral Resources (“DMR”), whose name still appears in legislation and publications concerning the Thai mining industry. On 16 June 2009, a new Minerals Bill was approved by the Cabinet at the request of the MOI and DPIM. The bill would supersede both the current Minerals Act and Mineral Royalty Rates Act. The bill has been referred to the Council of State for review, and has not been introduced in the Parliament. At present, the DPIM is reported to have asked to withdraw the bill due to changes in technology and the role of independent organisations. In June 2009, an NGO filed a case against the government for not complying with the Constitution, which aims to protect the community and environment. The NGO also filed an injunction requesting suspension of 76 projects in Map Ta Phut area, Rayong Province. In December 2009, the court made an injunction order to suspend 65 projects. Thereafter, the court permitted certain projects to continue their construction but the owners cannot operate their plants until they have complied with the process under the Constitution. Currently, only two projects remain suspended by the court order. The government is implementing the environmental laws to comply with the Constitution, which requires EIA and HIA process for major projects, opinions from independent organisations and public hearings. The eventual solutions reached will affect most mining projects. 2. Major Features of Mineral Legislation Ownership of Minerals Minerals belong to the state. No one can explore for minerals or undertake mining unless a prospecting license or mining lease is first obtained. The government has a policy to promote private sector development of the mineral industry. Regulatory Bodies The MOI and DPIM are the main regulatory bodies responsible for the supervision of exploration and mining operations, other mining-related activities, as well as compliance with the Minerals Act. In addition, the Minerals Act provides for the appointment of the LMIO as the competent official charged with the supervision of the execution of the Minerals Act at
thai mining legislation - 02 march 2011 325821.doc
local levels. The main responsibility of the LMIO is to perform general administrative tasks, including the acceptance of permit applications. Exploration Rights Before prospecting can be undertaken, a prospecting license (atchayabat) must be obtained. There are three kinds of prospecting licenses that mining investors may apply for: the general prospecting license (GPL) the exclusive prospecting license (EPL) and the special prospecting license (SPL). A GPL is a nonexclusive, non-renewal license that is issued for one year by the Local Mineral Resources Office (LMIO). The license allows a mining company to conduct exploration of a specific area. There are also other provisions that govern the possession of minerals. No license holder may possess minerals of any type in excess of 2 kilograms without a license from DPIM. Possession of a large quantity of minerals may be permitted...