LAOS - WHERE WE WORK

Laos has evolved from a communist state system toward a more market-oriented economy. This shift is exemplified by the development of major mining projects like Sepon, Phu Kham, and Ban Houayxai, which were led by Australian companies and have proven the government’s openness to foreign investment in the mining sector. However, with these mines nearing the end of their reserves, the government is now focusing on supporting new mining ventures.

Laos’ complex political history, especially its centrally planned economy between 1975 and 1982, shielded the country from rapid exploration advancements. As a result, Laos remains one of the least explored countries in Asia, despite having some of the most promising geological formations. This historical context creates a unique exploration opportunity for companies in the mining industry.

In the past two decades, Laos has seen the development of three world-class mineral deposits (Sepon, Phu Kham, Ban Houayxai). Additionally, the country is part of the Loei fold belt, home to the 5Moz Chatree gold deposit. Despite this mineral wealth, Laos remains largely unexplored, making it an attractive investment opportunity for mining companies.

Recent amendments to Laos’ mining law have addressed some regulatory uncertainties, but with implementing regulations still under development, the government has placed a moratorium on the issuance of new exploration licenses. As a result, focus has shifted toward existing exploration tenements, many of which have stalled due to limited funds or insufficient access to exploration expertise.

• Lao PDR is one of the fastest growing economies in East Asia and the Pacific. It has improved access to electricity, schools, and roads, and has become an important energy exporter.
• GDP growth averaged 7.7% over the last decade, with income per capita reaching $2,577 in 2018. Economic growth is expected to remain robust in 2018, at 6.5%, with growth expected to pick up in 2019-2020.
• The business climate is improving: companies now see growing opportunities from closer regional integration and reforms to improve the business environment. This has resulted in a steep decrease in political risk in Laos.
• The hydropower sector displays good success stories, as well as the few modern mines that are out there. Government needs now new revenues from mining as existing cash generating mines will downscale or close within the next three years.
• In the Doing Business 2019 Report, Laos ranks better or similar to other jurisdictions compared to metals-rich countries in Africa and Asia.
• In contrast, despite higher metal prices, the performance of the mining sector remains poorly developed. It boils down to conducting proper exploration and developing modern efficient mines.
• Laos is now positioned for a new wave of mineral discovery and development. The first movers on this wave will have the best opportunity to capitalise on the wealth that will be created.

Laos has improved its risk profile by 20% over the last four years according to the Mining Journal 2020 annual world risk assessment report, by far the largest increase globally in that period. From a risk perspective Laos now falls right in the middle of world mining jurisdictions and is the least risky country in SE Asia.​