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MINING LAW
of the LAO People's Democratic Republic
CHAPTER I
GENERAL PROVISIONS
Article 1.(Purposes of the Mining Law)
The purpose of the Mining Law is to provide a system of management for the conservation, exploration, mining and processing of minerals, for both local consumption and for export, and for the use of mineral resources in industry and its processes and also to improve the quality of life for the people of Lao PDR.
Article 2. (Minerals)
Minerals are naturally occurring resources which exist in non-renewable chemical and physical forms of solids, liquids or gases, including but not limited to gold, silver, iron, precious stones, sand, gravel, construction materials, coal, oil and gas and other hydrocarbons, and geothermal waters.
Article 3. (Ownership of Mineral Resources)
All mineral resources that exist at the surface or under land or water, within the territory of Lao PDR, are the property of the national community and are subject to the centralized and unified management of the State.
Article 4: (The Promotion, Management and Development of Mineral Resources)
The State will follow a policy of promoting the efficient development and management of mineral resources by persons and entities, both foreign and domestic.
Article 5: (Environmental Protection)
Any person or entity licensed to develop mineral resources shall utilize procedures to limit adverse environmental impacts and to limit the destruction of natural resources.
Article 6: Protection of the Rights and Interest of the Mineral Business Operators and the Local Population
The State protects the interest of the mineral business operators and the local population in compliance with the Laws of the Lao PDR.
Article 7: Scope of the Law's Effectiveness
The Mining Law governs the management of mineral resources and all activities concerning exploitation of mineral resources, including but not limited to, basic geologic surveys of natural resources, prospecting, exploration, development, production and processing of minerals in Lao PDR, with the exception of oil and gas, which will be governed under separate laws.
CHAPTER II
GENERAL GEOLOGIC SURVEYS AND MANAGEMENT OF MINERAL RESOURCES
Article 8:General Geological Surveys
General geological surveys are the process by which initial information on mineral outcrops and geologic structures are gathered for the purpose of preparing geologic maps.
The Ministry of Industry-Handicraft shall conduct nationwide general geological surveys in coordination with other concerned agencies and local administrative authorities as the need arises.
Article 9: Categories of Minerals
To promote the development of the minerals industry the Government has classified minerals in the following 4 categories:
Metallic Minerals;
Non-Metallic Minerals;
Hydrocarbons;
Geothermal Resources
Metallic Minerals include: Gold, silver, copper, zinc, iron, lead, tin and others
Non-metallic Minerals include: Diamonds, rubies, emeralds, limestone, gravel, sand, gypsum, industrial minerals and construction minerals
Hydrocarbon Minerals include: Coal, natural gas and petroleum
Geothermal Resources include: Geothermal waters
Article 10: Protected or Restricted Minerals
The Government shall issue from time to time, in the interest of maintaining efficient and sustainable use, a list of protected or restricted minerals which may not be exported, exported in raw form or imported.
Article 11: Record keeping and Disclosure of Mineral Resource Information
All persons and entities involved in mineral resource development activities shall keep adequate records and samples according to regulations governing record keeping.
All persons and entities involved in mineral resource development activities shall disclose data, information and samples which reflect mineral resources that have high value, are rare or have scientific significance. Persons and entities are forbidden to conceal, or to report false valuations for or sell or trade such samples. The State shall have the exclusive right to purchase samples which are rare, of scientific value, or high value.
The Government shall establish a list of the minerals and their details which will fall under this provision.
Article 12: Management of Mineral Resources
The Government entrusts the Ministry of Industry-Handicraft with the management and development of the nation's mineral resources, in coordination with concerned agencies, by outlining specific regulations.
CHAPTER III
CLASSIFICATION OF MINERAL RESOURCE AREAS
Article 13: Mineral Resource Areas
Mineral resource areas refer to areas where general geological surveys have been conducted and where commercial mineral deposits have been targeted for further detailed investigation.
There are four classifications of mineral resource areas:
Mineral business licensed areas;
Reserved areas
Restricted areas
Toxic areas
Article 14: Mineral Concessions
Mineral concessions are areas determined by Government as areas where mineral operations may take place.
Article 15: Reserved Areas
Reserved areas are mineral resource areas reserved for the extraction of a specific mineral.
Article 16: Restricted areas
Restricted areas are mineral resource areas where mineral operations are forbidden, such as areas with cultural significance, protected forest areas, areas important for national defense and maintaining order and others.
Article 17: Toxic Areas
A toxic area is an area within a mineral resource area where there exists toxic substances or toxic minerals. Where a toxic area exists, the Ministry of Industry-Handicraft shall inform and cooperate with concerned agencies and the relevant local authorities to provide protection for the health and security of the people.
CHAPTER IV
INVESTMENT IN MINERAL RESOURCES
Article 18: Mining Activities
Mining activities refer to activities including prospecting, exploration, extraction, processing and trading of minerals.
Mining activities may take place in the following forms:
Mechanized commercial mining operations;
Professional artisanal activities; and
Part-time artisanal activities.
Article 19: Mines
Mines are natural mineral reserves holding economic importance and are located at the surface and/or under the ground or water.
Article 20: Forms of Mechanized Commercial Mining Activities
Forms of mechanized commercial mining activities are divided into three levels as follows:
Large scale commercial mining operations;
Medium scale commercial mining operations; and
Small scale commercial mining operations.
The scale of each mining activity shall be determined by the Government based upon the amount of capital investment, the type of mineral(s), the area and the amount of mineral reserves.
Article 21: Investment in Mining Activities
Investment in mining activities in the Lao PDR shall take place under one of the following forms:
Sole investment by the State;
Joint investment between the State and domestic and/or foreign parties; and
Collective or private investment from domestic parties.
Article 22: Mining Operation Procedures
Mining operations shall refer to all stages including prospecting, exploration, extraction, processing and trading of minerals.
Prospecting, exploration and extraction shall be authorized only in areas where no mining activities for the same minerals are being conducted.
Article 23: Requirements for Mineral Development Projects
Persons or entities who seek to undertake mining activities shall apply for a prospecting license. When sufficient information has been gathered to justify further exploration, the person or entity shall apply for an exploration license.
After exploration, if a person or entity seeks to obtain a mining license, the following must be submitted to the Government: a study of the economic feasibility of the mine, an environmental assessment concerning the impacts of the mine on the environment, the ecology and society.
When a mining license is granted, the Government shall jointly invest in the mining operation.
A person or entity who has been granted a mining license shall establish and register their enterprise in compliance with the laws of the Lao PDR.
Article 24: Mineral Prospecting
Mineral prospecting refers to the procedure by which an evaluation of the geologic setting and the quality and distribution of mineral occurrences is determined by field observation.
Mineral prospecting shall require the approval of the Government. The period of mineral prospecting shall not exceed two years but may be extended, with approval of Government, two time with each time for no more than one year.
Article 25: Mineral Exploration
Mineral exploration refers to geological and geophysical studies within a determined area for the acquisition of further detailed data on the geology and geological structures through testing, trenching, exploration drilling, analysis of the physical and chemical features of minerals in order to assess economic potential.
Mineral exploration shall require the approval of the Government.
The period of mineral exploration shall not exceed three years but may be extended, with the approval of Government, two times with each time for no more than two years.
Article 26: Assessment of Mineral Reserves
The assessment of mineral reserves refers to the evaluation of the tonnage and grade of each type of explored mineral.
Article 27: Testing and Analysis of Samples
License holders are entitled to send mineral samples and other mineral-related items for testing and analysis, whether within or outside the country, in accordance with the regulations outlined by the Government.
Article 28: Areas of Relinquishment and Addition
After prospecting and exploration, licensees shall relinquish the undesired portion of the prospecting or exploration concession, in part or in full, and provide to the Government all data acquired from such prospecting and exploration.
If it is discovered that a mineral occurrence extends beyond the licensed area, the licenses are entitled to apply for the addition of such area based on the acquired data.
Article 29: Evaluation of the Feasibility Study for Proposed Mining Projects
An evaluation of the proposed mining project shall include an evaluation of the economics of the proposed mine and the foreseeable negative impacts of the proposed mine on the environment and the surrounding communities.
Article 30: Feasibility Studies
Feasibility studies submitted with an application for a mining license shall include an elaboration on the following:
The plans and technical processes to be used in mining, and the tonnage and grade of the expected reserve to be mined;
An economic evaluation of the mine and an evaluation of the social impact of the mine.
The timeframe for the development of the feasibility study shall not exceed one year but may be extended for more than one year with the approval of Government.
Article 31: Environmental Impact Assessment
Along with the feasibility study, the investor shall submit an environmental impact assessment which shall contain an elaboration on the following:
An estimation of the projected environmental impacts and proposed alternatives and measures to avoid or reduce the adverse impacts on the environment, ecology and communities; and
An evaluation of the loss to be incurred and the proposed rehabilitation, including the methods proposed to avoid economic hardship to those people who will be affected by the mineral development project, including plans providing for resettlement and the means of livelihood.
Article 32: Conditions for Obtaining a Mining License
Applicants for a mining license shall meet the following conditions:
Demonstrate the financial and technical capacity to undertake the mining project:
Demonstrate a suitable history and trackrecord in mining ventures of a similar nature;
Demonstrate that the mining project can be operated in an efficient manner and that it will adhere to the national socio-economic plan and be devoid of serious environmental or ecological impacts.
Where applicants can meet the above conditions, the Government will consider the application for a mining license.
Article 33: Mining
Mining, as referred to in this Law, refers to stripping, extraction, removal, processing, grinding, grading and storage of minerals.
The period of the mining license shall not exceed thirty years from the date the concession is granted, but it may be extended twice, each time for no more than ten years as approved by the Government who will consider the request for an extension upon a case by case basis and upon consideration of the scale of the mining operation.
Article 34: Relinquishment of the Mining Enterprise
At the expiration of the mining license, the mining company shall relinquish the mining concession in full, including the mining related assets, such as mining equipment and vehicles, to the Government without any compensation, except where the Government indicates that it will refuse to accept such assets.
Article 35: Artisanal Mining
Artisanal mining refers to the occupation of small-scale mining carried out by manual means with non-mechanized tools. Only Lao citizens using their own sources of funds may be artisanal miners.
Professional artisanal miners shall obtain a license from the relevant Ministry of Industry-Handicraft Provincial, Municipal, or designated Special Zone office, which authority shall report to the Ministry of Industry-Handicraft headquarters.
If an artisanal miner employs workers or uses other means of mining [other] than manual tools, such mining shall be considered a mechanized mining operation.
Part-time artisanal mining refers to an artisanal miner who mines only intermittently and for whom mining is not the sole means of employment.
Part-time artisanal mining shall require a license from the relevant Ministry of Industry-Handicraft District Office, which authority shall report to the relevant Ministry of Industry-Handicraft Provincial, Municipal or Special Zone Offices.
Article 36: Minerals Processing
Minerals processing refers to post-mining value-added treatment such as washing, smelting, refining, cutting and polishing.
Minerals processing to upgrade mineral quality shall require specific approval from relevant Government authorities.
Article 37: Minerals Trading
A mining company shall be entitled to sell its mined minerals provided it obtains a trading license from the Government. Other persons or entities who seek to trade minerals must obtain a trading license or other approvals from relevant Government authorities.
Minerals, as used in this section, refers to minerals that have been washed, ground, graded and processed.
CHAPTER V
RIGHTS AND OBLIGATIONS OF MINING LICENSE HOLDERS
Article 38: Rights and Obligations of Mining License Holders
Mining license holders shall have the right to:
Be protected by law;
Conduct exclusive mining activities along approved procedures within the concession area;
Receive priority to conduct further mining activities based upon assessment and approval by the Government;
Own assets and obtain returns from mining activities as provided by contract;
Receive technical and technological recommendations from the Government on the conduct of mining activities;
Apply for the extension of mining licenses; and
Build, construct and erect equipment to conduct mining activities in compliance with regulations as promulgated by concerned governmental authorities.
Artisanal miners shall be entitled to transfer their mining operation to members of their families, but may not transfer such operations to other persons.
Article 39: Right of Licensees' to Transfer Mining Activities
Licensees' conducting mining activities shall be entitled to transfer or inherit mining activities as approved by the Government, except where those activities have not progressed past the prospecting stage.
Article 40: Rights of the Licensee in Concession Areas
In undertaking mining operations, the licensee has the right to enter contracts with the Government for the supply of water, electricity and other things necessary to conduct the mining operation, however, the licensee must also obtain relevant permits as prescribed by law. The mining project shall use water and electricity efficiently and wastewater shall be recycled and treated prior to discharge for the protection of the population and the environment. Where the mining activity involves the use of toxic substances, the Government may declare such an area a special or toxic mining area.
A licensee's use of wood in the concession area shall require approval and compensation.
Where a licensee's surface operations interfere with other persons' or entities' land, buildings, or crops, compensation must be provided for their damage and/or removal.
Article 41: Priority of Mining Areas
In the case where a licensee discovers other minerals in its concession other than the minerals it obtained authorization to mine, the licensee shall have priority in applying to the Government to mine the newly discovered minerals, unless those minerals appear on the reserved or restricted mineral lists as published by the Government.
Article 42: Obligations of Mining Licensees
Licensees shall have the following obligations:
to conduct mining activities in compliance with any or all prescribed procedures and within authorized timeframes;
to guarantee performance by setting up a Fund in accordance with the regulations promulgated by the State Bank of the Lao PDR;
to conduct mining activities as described in the feasibility study and mine plans;
to preserve and restore the land utilized during mining and to rehabilitate the land after mine closure and to guarantee that the project shall have no serious impacts on the environment, national security or the public and to provide appropriate compensation or damage in the case of casualty of life or property in the community or public.
to keep records of mining activities and expenses at each stage and to make timely reports;
to provide training and skill development for Lao workers and to guarantee the welfare, health and safety for Lao workers;
to keep accounts as provided by the Enterprise Accounting Law;
to properly and timely perform custom, tax and other fiscal obligations;
to construct roads for mining activities as necessary and to ensure that such roads be open for use by others;
to strictly abide by the Laws of the Lao PDR.
Professional artisanal and part-time artisanal mining licensees shall be obligated to pay taxes as prescribed by law, to preserve the environment and to strictly abide by the laws of the Lao PDR.
Article 43: Relationship with Local Administrative Authorities
License holders at each stage of activity shall contact local administrative authorities in the areas in which they are working to obtain goods and services to conduct their mineral related activities.
Article 44: Termination of Mining Activities
Mining activities shall terminate when any of the following conditions are met:
The term of a license expires for any or all stages;
A licensee voluntarily terminates activities prior to the term of the license; or
A license is withdrawn by the Government due to the licensee's severe breach of contract or violation of the laws of the Lao PDR.
Article 45: Standards for mining technique and technology
In the performance of mining activities, the licensee must use techniques and technologies that meet international standards and are approved by the Ministry of Industry-Handicraft and other relevant authorities with the view of ensuring efficiency, security and environmental protection.
Article 46: Relinquishment and Restoration of the Mine Area
Mining licensees shall relinquish area in the mining concession to the Government, including leased land, under the following circumstances:
the use of such land is no longer required;
the licensee's mining license has been withdrawn due to the licensees' non-performance
of contract or serious violations of the laws of the Lao PDR; or the licensee's mining license has expired.
The licensee shall notify the relevant governmental authorities of any such relinquishment in a timely manner.
In the case where the surface of the land has been changed by mining activities, the land shall be restored and rehabilitated before relinquishment, including, where necessary, cleaning, chemical decontamination, and revegetation.
Article 47: Compensation
The licensee shall set up and maintain a fund appropriate under the circumstances of the specific mineral development project for:
resettlement of people from the mining area and to ensure their livelihood;
compensation for any damage to land, buildings or crops;
rental of land;
environmental protection; and
restoration and rehabilitation of the mining area.
This fund shall be included in the capital investment for the project.
CHAPTER VI
ADMINISTRATION AND MINE INSPECTION
Article 48: Authority and Administration
The Governmental authorities responsible for administration of these laws include:
Ministry of Industry-Handicraft;
Province, Municipality or Special Zone Industry-Handicraft Services;
District Industry-Handicraft Offices; and
Village administrative authorities.
Article 49: Administration and Mine Inspection
The Ministry of Industry-Handicraft shall have the following duties and authority:
Assist the Government in formulating strategic planning for mineral development and in the enactment of rules and regulations to manage and administer mining activities;
Conduct scientific and technical research on geology and mining; gather national statistics and establish an information center for geology and mining;
Coordinate with other relevant agencies and local administrative authorities;
Research and present technical opinions on mining activities;
Issue prospecting, exploration, mining and mineral processing licenses;
Train and improve geology and mining skills among Lao personnel and workers;
Grant approvals for export or import of minerals in compliance with relevant regulations of other concerned ministries;
Undertake inspections of geological and mining activities; and
Undertake cooperation with external agencies and entities concerning geology and mining.
Article 50: Authority and Duties of the Provincial, Municipal and Special Zone Industry-Handicraft Services
In the management and inspection of mining activities, the Provincial, Municipal and Special Zone Industry-Handicraft Services shall have the following duties and authority:
Provide staff support to the Ministry of Industry-Handicrafts and local administration on management and guidance of mining activities within their territories;
Coordinate with other relevant agencies and administrative entities;
Research and present opinions on mining activities within their area of management;
Issue licenses and register professional artisanal mining activities;
Undertake inspections of mining activities within their area of management; and
Perform other duties pertaining to mining activities as assigned from the Ministry of Industry-Handicraft.
Article 51: Authority and duties of the District Industry-Handicraft Offices
In the management and inspection of mining activities, the District Industry-Handicraft Offices shall have the following duties and authority:
Assist the Ministry of Industry-Handicrafts and the Provincial, Municipal and Special Zone Industry-Handicraft Services in the implementation of plans, projects, regulations and instructions of the Provincial, Municipal and Special Zone Industry-Handicraft Services concerning mining activities;
Coordinate with other relevant agencies and administrative entities;
Authorize and inspect part-time artisanal mining activities within their districts;
Provide facilities to lawful mining activities;
Perform other duties pertaining to mining activities as assigned by the Ministry of Industry-Handicraft Services.
Article 52: Authority and duties of Village Administration Authorities
In monitoring mining activities, the village administrative authorities shall have the following authority and duties:
Duty to monitor and inspect professional artisanal and part-time artisanal activities within village areas;
Submit reports concerning mining activities that impact local communities and their rights, traditions and customs;
Monitor and report on mineral occurrences within the village area;
Provide facilities to mining activities in the village area;
Coordinate with other concerned authorities and parties concerning security in the village area; and
Inspect part-time artisanal mining activities for compliance with regulations.
Article 53: Monitoring and Inspection of Mining Activities
Monitoring and inspection of mining activities refers to the oversight activities by the Government throughout the stages of prospecting, exploration, mining, processing, trading and after mine closure to ensure proper performance by persons or entities under any relevant contracts, the Mining Law and other laws of the Lao PDR.
The main elements that will be monitored and subject to inspection include the following:
Implementation of proper mining procedures;
Timely performance of obligations;
Preparation of feasibility studies;
Compliance with approved plans;
Compliance with mine safety and health plans;
Compliance with environmental impact mitigation measures;
Compliance with record keeping and reporting procedures;
Assets of the mining projects; and
Compliance with laws and regulations concerning mining activities.
Article 54: Inspection of Mining Activities
Inspection of mining activities may be performed as follows: routine inspections and announced and unannounced inspections, depending on the circumstances.
Routine inspections refer to inspections which are regularly performed at fixed times, and which shall be performed at least once a year.
Announced inspections refer to inspections which are deemed necessary and where the mining project is given advance notification of the inspection.
Unannounced inspections refer to inspections which are deemed necessary and where no advance notice is provided to the mining project.
Inspections may include both inspections of a mining project's documents and data and field inspections.
CHAPTER VII
ARBITRATION, AWARDS, DISPUTES AND PENALTIES
Article 55: Arbitration
Where disputes arise between parties to a mining contract, a settlement shall be sought. Otherwise, the parties to the contract may submit the matter in dispute to the Arbitration Committee or the Court of the Lao PDR for further proceedings.
In case of disputes arising between employers and employees, the Labor Law of the Lao PDR shall apply.
In the case disputes arise between foreign investors or between a foreign investor and a Lao investor, Article 21 of the Law on the Promotion and Management of Foreign Investment in the Lao PDR shall apply.
Article 56: Awards
Persons or entities with prominent achievements in the efficient management and preservation of mineral resources according to the Laws of the Lao PDR will receive an award and be granted benefits as outlined by the Government, which can include, inter alia, credit policy and extension of mining licenses.
Article 57: Sanctions
Persons or entities breaching this Law shall be subject to sanctions such as education, fines or criminal penalties, including sentences, depending on the nature of the offense.
Article 58: Educational Measures
Persons or entities committing an offense under this Law, whether it is minor or severe, such as failure to submit timely reports, failing to comply with technical standards or failure to obtain mining licenses for professional or part-time artisanal mining, shall receive an official warning and education.
Article 59: Fines
Persons or entities that violate this Mining Law through any of the following:
Conducting mining activities without a license or with an expired license;
Trading in minerals in violation of regulations;
Sale, lease or transfer of a mining license without authorization;
False statements in reports;
Breach of the principles in the Mining Law and other regulations governing mineral activities;
Failure to comply with environmental protection mitigation measures, the discharge of untreated wastewater, or discharge of water containing toxic substances that affects the public's health;
Failure to comply with mine safety provisions for workers;
Destruction of a mineral resource due to their own fault; and
Failure to cooperate with Government authorities and inspectors.
The above shall subject the person or entity to the following fines:
For the first offense: 500,000 kip to 3,000,000 kip.
For the second offense: 3,100,000 kip to 5,000,000 kip.
For the third offense: 5,100,000 kip to 10,000,000 kip.
Offenses under Article 58 which are committed over three times shall be fined from 50,000 kip to 200,000 kip.
Where professional or part-time artisanal miners are in violation of any of the provisions in this section, fines of 10,000 kip to 20,000 kip shall be imposed.
Article 60: Criminal Sanctions
Circumstances which will warrant criminal sanctions under the Criminal Law for violation of the Mining Law include: falsification of mining licenses or failure to comply with technical safety measures which cause death or injury.
Punishment under the Criminal Law will also apply to civil servants who commit criminal offenses including: taking bribes, abuse of power, forgery of documents and the abuse of an official position for personal gain from mining activities.
Article 61: Additional Penalties
Operators who are penalized under Articles 59 and 60 may be subject to additional penalties such as cancellation of the mining license and seizure and liquidation of assets.
CHAPTER VIII
FINAL PROVISIONS
Article 62: Implementation
The Government of the Lao People's Democratic Republic shall implement this Law.
Article 63: Effective Date
This Law shall become effective within ninety days after its promulgation by the President of the Lao People's Democratic Republic.
Persons and entities receiving mining licenses prior to this Law's effective date shall be entitled to continue their mining activities.
Where contracts have been signed but which terms conflict with the terms of this Law, the concerned agencies shall be notified within one hundred and twenty days from the effective date of this Law to consider amendment.
Any regulations and decrees inconsistent with this Law are superseded.
Ventiane, 12/04/1997
President of the National Assembly
Saman Vignaket