New Developments on Mining in Thailand Part 2
In December 2016, the new Minerals Bill (the Bill) passed its third reading in the National Legislative Assembly. Currently, it is waiting for promulgation in the Royal Gazette. The Bill will come into effect 180 days after promulgation. The key changes, compared to the Minerals Act currently in effect, are summarized below.
Consolidation of the Minerals Act and the Mineral Royalty Rates Act
The Bill consolidates the Minerals Act, B.E. 2510 (1967), last amended in 2002 (the MA), and the Mineral Royalty Rates Act, B.E. 2509 (1966), last amended in 1979 (the MRA), into one piece of legislation, and makes numerous changes, including to the types of prospecting licenses and mining leases, to validity periods, and to who is authorized to issue those licenses and leases.
Prospecting Licenses and Mining Leases
Under the Bill, a prospecting license is issued by the local minerals industrial officer and is valid for one year. However, there is only one type of exclusive prospecting license, as opposed to two types under the MA (inland and offshore). These licenses are issued by the Director-General of the Department of Primary Industries and Mines (the DPIM Director-General) and are valid for two years. Special prospecting licenses under the Bill are issued by the DPIM Director-General with the approval of the Minerals Committee and have a term of five years.
Mining operations are split into three categories, based on the size of the mining area, Environmental Impact Assessment (EIA) requirements for the operation, the type of mine, area of mining, geography of the mineral deposits, mining methodology, and the impact on environmental quality and public health. Which authority issues the mining lease depends on its category. Provisional mining leases no longer exist under the Bill. The maximum term of a mining lease is extended from 25 years to 30 years from the date of issue, including any term renewals.
National Minerals Management Policy Committee
The Bill calls for an additional committee to be established, called the National Minerals Management Policy Committee (the NMC), which is empowered to propose strategies, policies, and minerals management master plans (the Master Plans) to the Cabinet for approval. The Master Plans will be prepared and updated by the NMC every five years. Part of the Master Plan will designate mineral deposit areas for mining (the MDAs).
Limited Areas for Mining
Under the Bill, mining in preserved areas or for preserved minerals specified in the Master Plans is prohibited. Permission for mining operations will only be granted in the MDAs. The NMC is also empowered to specify the granting of any mining leases, or stipulations or conditions on them, for any MDAs, or any type of minerals requiring prior approval from the NMC. With the approval of the NMC, the Minister of Industry is authorized by the Bill to initiate bidding for mining leases in the MDAs, if the initial study finds that they are rich in mineral resources and are of high economic value.
Environmental and Social Concerns
The Bill extensively focuses on environmental and social concerns. Representatives at the local level will take part as members of provincial minerals committees, which are involved with granting permission for mining leases for Category 1 mining operations. The Bill also imposes obligations on operators, including requirements to provide guarantees for the rehabilitation of mining areas; help for people affected by mining operations, according to specified rules; and the procurement of third-party liability insurance.
Higher Official Fees for Licenses Under the Bill
The Bill imposes much higher official fees for applying for licenses issued under the Bill, compared to those imposed under the MA. For example, the fee for a prospecting license will increase from a range between Baht 100 and Baht 1,000 to a new range between Baht 10,000 and Baht 100,000 (depending on the type of prospecting license), while the fee for a mining lease will increase from Baht 1,000 to a range between Baht 100,000 and Baht 1 million (depending on the type of mining lease).
Transitory Provisions Under the Bill
The Bill contains transitory provisions. All ministerial regulations, notifications, rules, or orders issued under the MA and the MRA, which are effective before the date the Bill comes into force, will continue to be effective to the extent that they are not contrary to, or inconsistent with, the Bill. Any application submitted before the effective date of the Bill will also be deemed an application under the Bill and will be considered under the rules of the Bill. Any prospecting license, mining lease, and license issued under the MA will be deemed issued under the Bill, and will be effective until it expires.