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Thailand Shuts Down All Gold Mining

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Thailand Shuts Down All Gold Mining

The military junta ruling Thailand surprised the mining community this week when it suddenly banned gold mining in the nation. It decreed that all gold mining in the country must be shut down by the end of the year. Operations will remain halted until environmental concerns are addressed. Villagers claim that the mines have poisoned livestock, crops, and the villagers themselves, and demand that the mines be closed permanently.

The mining companies claim that they have not contaminated the local environment, and tests have shown that the heavy metals found in villagers' blood are elements that are not used in gold mining.

News of the ban led to the owner of Thailand's largest gold mine, Australia-based Kingsgate Consolidated, to halt trading in its shares on the Sydney Stock Exchange. A spokesman told Reuters that they had as yet received no official notice to close the mine, and had no plans to sue the government, noting "This is a sensitive issue."


The nationwide ban on gold mining in Thailand has centered around the country's first and largest gold mine, the Chatree mine, 174 miles north of Bangkok. The mine is operated by Kingsgate's Thai subsidiary, Akara. Villagers nearby claim that higher than normal levels of arsenic and manganese in their blood is the fault of the mine. The operators of the mine, a subsidiary of Australia-based Kingsgate Consolidated, point out they they don't even use arsenic at the mine, and manganese and arsenic are naturally present in the region's soil. The villagers counter that the dust raised by the open-pit mine is drifting over the villages and poisoning crops, livestock, and people.

There has been a long history of controversy between the mine and local activists over claims of pollution. A January 2015 investigation by the military government found more than 300 people that tested positive for elevated levels of arsenic and manganese. No link to the mine could be proven, and it was allowed to reopen after 44 days.

It should be noted that there were no elevated levels of cyanide detected in any of the villagers. Cyanide is commonly used in gold mining operations worldwide, including at Chatree. If the villagers were exhibiting high levels of cyanide, that could be taken as proof that the mine was contaminating the surrounding area. Chatree is in compliance with international mining safety measures regarding the use of cyanide to extract gold dust from ore.

Kingsgate Chairman Ross Smyth-Kirk let his frustration over the long-running troubles at Chatree spill over in an interview after the surprise shut-down order: "Not only has nobody died, nobody has even been sick or shown any symptoms of anything and yet we still go on with this giant farce. If the stupidity of these people [protesting] was to come to light, it would have amazing economic ramifications for this area."

Dueling Blood Tests

The 1,004 blood tests administered by the government in January 2015 found around 400 people with manganese levels "above the standard," and around 200 with arsenic levels "above the standard."


This is somewhat misleading, as there are no official thresholds for measuring heavy metals in Thailand. The criteria used by the Public Health Ministry set a limit of 4-15 micrograms of manganese per liter of blood, and 0-50 micrograms per liter of urine. As a comparison, the workplace laws of the Australian government say that anything under 100 micrograms of arsenic per liter of urine is normal, and readings above 150 micrograms are considered excessive.

Akara ran its own blood tests on staff and villagers living up to 50 km away from the mine. It found 14% of those tested had arsenic levels of around 50 micrograms. However, 70%-80% of those tested had manganese levels above 10 micrograms, the limit Akara find acceptable (still below the Thai Health Ministry limit of 15ug.) The mine announced that it would pay for further tests for anyone with elevated readings.

Activists have claimed that the mine has sickened up to 500 people, and "dozens" have died, but has no evidence that the mine is to blame for any sickness or death.

A government report submitted to ministers last month was a “scientific rebuttal of unsubstantiated and vexatious allegations of contamination,” according to Akara.

Not Everyone Hates Akara

At a recent visit by government health officials to the area, 3,500 mine supporters showed up. Khampan Lue-aye says that her three sons have worked at Chatree since the jungle was first being cleared. She said "There are no health problems, it's all normal — when people are sick, the mine helps them." Bamrung Thadaeng, a worker at the Chatree gold mine in Phichit whose job is threatened, said hundreds of people will be out of work, and many might be forced to look for jobs outside the province. "I grew up here. If I choose to stay here, I will have to turn to farming," he said.

The opposition is wide and vocal, however. During the above-mentioned tour by health officials, 500 activists showed up to protest. Environmental groups and anti-mining activists have coordinated with local residents to stage numerous protests against the Chatree mine for several years, claiming that contamination from the mine has made drinking water unsafe.

A Kinder, Gentler Junta

In May 2014, the Thai military staged a coup to combat the violent upheaval between the two main political parties. Since then, the constitution and elections have been suspended and  dissent has been suppressed. In an attempt to win back the support of rural Thais, the government has begun campaigns to address their grievances, including the long-running opposition to the Chatree mine.

The government announcement of the forced closure of the nation's only active gold mine admitted that there was no conclusive evidence linking the mine to health risks:

"Even though there is no clear conclusion that the environmental and health impacts came from the Akara gold mine, [we made this decision] for the benefit of society and to solve conflict between people."

Activists worry that the junta could reverse its decree at any time, while mine workers and Akara hope that they do. The fallout to the Thai economy as foreign investors may be frightened away is uncertain, no matter what the outcome at Chatree may be.



The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product

About the Author

Everett Millman

Steven Cochran

Precious Metals Market Analyst
BS University of South Florida (2002)

A published writer, Steven's coverage of precious metals goes beyond the daily news to explain how ancillary factors affect the market.

Steven specializes in market analysis with an emphasis on stocks, corporate bonds, and government debt. He writes a monthly review of the precious metals markets for

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