CHAPTER
10
MINING
The mining industry comes under the
jurisdiction of the Department of Mineral Resources ("DMR") which is itself
supervised by the Ministry of Industry.
Mining council Those who wish to engage in exploration or mining must first become
members of the Mining Council. Applications are routinely approved. The Mining
Council acts as a liaison body between the government and private industry.
Licenses Before engaging in either exploration or mining, the appropriate
license must first be obtained.
Exploration licenses There are three types of exploration license:
General prospecting license This is a one‑year non‑exclusive, non‑renewable license issued by the
local Mineral Resources Office. It permits the holder to explore for minerals
in a specified area.
Exclusive prospecting license This license is exclusive for the area covered by it. It requires exploration
to commence within 60 days, a suitable amount of work to be performed and
reports to be made. An EPL for onshore exploration is valid for one year while
one for offshore exploration is valid for three years.
Special prospecting license This license requires the expenditure of a specified sum of money every
year and the use of high technology with the expenditure monitored by the
Department of Mineral Resources. Reports must be filed every 120 days. This
license is valid for five years.
Mining licenses and provisional
mining licenses Once a mineral discovery has been
made an application may be made for a mining license to cover mining activities
on or offshore as the case may be. In some cases, a one‑year provisional mining
license is granted. A mining license is valid for a period of up to 25 years,
including the period covered by a provisional mining license.
Underground mining The Minerals Act (2002) imposes conditions that apply to applications
for a license for underground mining, emphasing the importance of technical
specifications, supervision, insurance, safety, environmental considerations
and other matters. Those who suffer loss as a result of underground mining
activities are also granted certain rights.
Surface rights In addition to a license, where the exploration or mining will take
place on land, it is necessary to obtain the permission of the surface owners
or possessors prior to proceeding. The fact that a license has been issued to
explore or mine does not imply or constitute permission of those with surface
rights. In fact obtaining surface rights is often a far more difficult task,
since each owner's or possessor's rights may extend to only a small piece of
land. Where a mining project requires a large tract of land negotiations may
involve numerous owners and/or possessors.
Foreign involvement in mining
activities Mining is a restricted business
activity under Schedule 2 of the Foreign Business Act. This means that minority
foreign ownership of such a business is permissible without consent, but if
majority foreign ownership is desired, an application must be submitted to the
Cabinet (see further Chapter 1 Foreign Business Restrictions). The
United States – Thailand Treaty of Amity excludes the exploitation of natural
resources from the equal national treatment afforded to Americans in most other
cases (see further Chapter 2 The United States - Thailand Treaty of Amity).
Accordingly, all foreign ownership restrictions contained in the Foreign
Business Act also apply to Americans engaged in mining.
Exploration is not ‘mining’ and so
is not covered by the Foreign Business Act. However, a Cabinet resolution
passed in 1966 restricts aliens from exploring or mining above the 11th
parallel, which divides the southern peninsula of Thailand. Whilst this
resolution is not law, it is enough to inhibit the granting of exploration
licenses above the 11th parallel to foreigners.
Offshore mining in shallow waters Companies which are engaged in mining in waters up to a depth of up to
200 feet, may apply for renewal of their mining licenses only if they become
60% Thai owned. New mining licenses may be issued to companies which are
initially at least 51% Thai owned and which agree to become 60% Thai owned
within two years.
Board of Investment incentives The BOI promotes mineral prospecting and mining. Promoted exploration
projects are subject to minimum expenditure requirements and must be majority
Thai owned.
Royalties and taxes Mining license holders must pay royalties, based on the value of
minerals extracted. This is except in the case of gem mining, where the royalty
is based on the size and value of the land covered by the mining license. Mine
operators, unlike petroleum concessionaires, are subject to the normal Revenue
Code taxes.
Revised 1 December 2006