The new Minerals Act (2017) came into effect on August
30 2017. Our briefing dated April 10 2017 provided some
background on the former laws – the Minerals Act
(l967) and the Mineral Royalty Rates Act (1966) – and
a summary of major amendments. However, rules under the new Act
were not enacted for some months, and many are still in draft
As of March 13 2018, 38 notifications had been issued, and
there were 28 draft MRs, regulations, notifications and orders
of the Ministry of Industry (MoI), and of the Department of
Primary Industry and Mining (DPIM) posted in Thai on the DPIM's
Generally, the new Act aims to provide stricter
environmental controls, decentralise administrative power,
encourage the use of newer mining technology, and provide those
living in mining areas with more protection.
However, there are concerns about the future of mining
projects in Thailand.
- In the past, the board of investment (BOI) provided
promotional privileges for exploration and mining companies
for all minerals, with few exceptions. Benefits included tax
exemptions on the import of machinery and equipment, income
tax holidays, and waivers of normal immigration and work
permit regulations for all minerals. The BOI has
substantially limited promotion for mining, to only potash
mining and ore dressing.
- Formerly, in the case of projects with substantial
investment capital, the BOI allowed foreign investors to
initially hold a majority or all of the shares, but Thai
nationals had to acquire shares of no less than 51% of the
registered capital within five years of starting operations.
However, under a new MoI notification published on January 30
2018, majority Thai ownership is prescribed and all forms of
nominee ownership on behalf of foreigners is prohibited.
- Royalty rates are capped at no more than 30% of the
market price of the mineral, and were to be prescribed under
ministerial regulations. On January 30 2018, an MoI
notification was published, prescribing rules regarding
royalties but with no specific royalty rates.
- The National Mineral Administration Policy Board is
charged with the preparation of a minerals administrative
master plan, which will include resource surveys,
restrictions on certain minerals and areas, and guidelines
for mineral administration that results in appropriate
benefits to the economic, social, environmental and health
balance. A master plan is to be prepared at five-year
intervals. To date, no such master plan has been approved by
the Council of Ministers.
- Before the new Minerals Act came into force, the Chatree
gold mine's mineral processing licence was suspended,
reportedly due to pollution incidents. The company's
Australian shareholders brought a claim under the
Australian-Thai free trade agreement, which is still
|Albert T. Chandler