28th July 2014 – The Australian – Mine digs Lao communities out of poverty

Home / Media / 28th July 2014 – The Australian – Mine digs Lao communities out of poverty


Lao 01082014

IT is not the biggest copper ­operation around. But in terms of national impact, the Australian-built Sepon operation in southern Laos is right up there in its economic and social development contribution.

Now in its 12th year of production — it started out as a gold producer — the Sepon project accounts for just over 8 per cent of the impoverished, but fast-growing, nation’s GDP through direct and indirect benefits.

It has just passed a milestone when it comes to direct benefits (taxes, royalties and dividends), with total payments since production started now standing at more than $US1.1 billion after the payment to the government (a 10 per cent partner in the mine) of $US136 million in respect of 2013 earnings. Sepon is expected to produce about 90,000 tonnes of copper this year and has studies underway in the possible resumption of gold production.

Built by Owen Hegarty’s Oxiana Resources, Sepon is now part of the Australian-managed but Chinese-controlled MMG, following MMG’s acquisition in 2009 of a portfolio of mining assets from OZ Minerals (formed through the merger of Zinifex and Oxiana in 2008).

MMG chief executive Andrew Michelmore told The Australian that while the $US1bn-plus direct payments milestone was important, the “greatest legacy we are creating is in local skills”.

“Our Lao employees have taken the opportunities at Sepon and turned them into skills and careers, within the mine and beyond. “From scratch in terms of mining skills, we’ve trained and developed a workforce that is more than 90 per cent Lao, and we’ve moved 100 Lao nationals into management roles. Whatever way you look at it we are in this together with the people of Laos,’’ Mr Michelmore said.

MMG’s community investment is also significant. Development funds have been made available for 42 local villages or more than 10,000 people. Since 2010, the development funding has supported communities near Sepon mine to build schools, roads, latrines, fish ponds, access to water and village offices.

“We also invest for the future by helping local businesses target national and international markets. We work in partnership at every level, from national government to local communities,’’ Mr Michelmore said.

One of the local business projects being supported is the milled rice enhancement project in Vilabouly. The project aims to build capacity among 1300 small farming households for rice-growing around the mine. It promotes a high-yield rice seed, improved production methods, and marketing solutions.

Mr Michelmore said the hope was that local producers would ultimately supply the Sepon mine with its total annual rice requirements of 150 tonnes.

In comments provided by MMG’s Sepon office, the vice president of the Lao National Chamber of Commerce and ­Industry, Daovone Phachanthavong, said that a 2012 survey by Earth Systems Lao found that household incomes in villages near the mine had increased tenfold since Sepon commenced ­operations. “Sepon mine is an excellent example of how the sustainable management of natural resources can contribute positively to human development,” he was quoted as saying.

— Barry Fitzgerald

The Full version of the article can be accessed by click here (The Australian, subscribers only).