Shut gold mine shows investors risks of Thai junta rule
When Thailand’s junta leader-turned-prime minister used his absolute power to suspend gold mining, causing an Australian miner’s shares to plummet 19% in a single day, he complicated efforts to attract foreign investors already spooked by military rule. Prime Minister Prayut Chan-o-cha announced the order last week, saying that gold mining will be suspended from the start of 2017 in a bid to address health and environmental concerns. By issuing the order under Article 44 of the interim constitution enacted when his junta toppled the elected government in 2014, Gen Prayut ensured it was “lawful, constitutional and final.” The most immediate loser is Australia’s Kingsgate Consolidated Ltd, which through its subsidiary operates Thailand’s largest and only commercially viable gold mine. Its shares dropped as much as 19% last Wednesday and are down nearly 40% since May 10, when Thailand announced the Chatree mine might close amid complaints of arsenic and manganese contamination in nearby villages. The bigger loser may be Thailand’s economy itself, which is already growing at a slower rate than its neighbours at an expected 3.2% this year. Exports have steadily fallen, dropping the most in three months in October.
