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Kingsgate to shut Thai mine at month's end

AAP logoAAP 21/12/2016 Ron Corben

Australia miner Kingsgate Consolidated will be forced to shut down its goldmine in Thailand on December 31 after a months-long battle to keep it open.

However, senior executives hope the appointment of a new industry minister and a new law will pave a way to reopening the mine in northern Thailand sometime in 2017.

Kingsgate has faced a roller-coaster ride since the Thai government's decision in May to shut down goldmining in Thailand from January 1 following claims by environmentalists of heavy metal pollution from the mine.

Kingsgate has repeatedly denied these claims.

However, Prime Minister, General Prayut Chan-ocha last week announced a cabinet reshuffle in a bid to boost the country's flagging economy, promoting economic and business experts to key ministerial posts.

Uttama Savanayana, the new industry minister who also oversees the mining sector, has a doctorate in business administration from the University of Massachusettes-Amherst.

Mr Uttama's appointment has lifted the hopes of Kingsgate's executives after the Thai government abruptly cancelled a meeting with Thai Deputy Prime Minister Prawit Wongsuwan this week.

Kingsgate chairman Ross Smyth-Kirk says he hopes talks with the US-educated Mr Uttama will clarify the company's position.

"When we talk to [Uttama] he'll understand how they've damaged their international reputation for investors so badly it probably can't be restored at the moment," Mr Smyth-Kirk told AAP.

Kingsgate's Chatree mine, overseen by its Thai offshoot Akara Resources, is the only major goldmine operator with a concession until 2028.

The mine, which opened in 2001, is to be placed into care and maintenance at month's end, with the loss of 1,000 jobs. This has already had a major impact on the provincial economy.

"We had to plan for months about what we're doing and how we were going. So we were closing anyway," Mr. Smyth-Kirk said.

However, Mr Smyth-Kirk has hopes the situation may be reversed.

"We've got a few people who think they can do something and we'll talk in the New Year and maybe who knows what will happen but at this stage it's closed," he said.

Mr Smyth-Kirk said despite the mine's operational closure, "it's far from over".

But Greg Foulis, Kingsgate's chief executive officer, appeared more downbeat.

A new Mineral Act, approved by the Thai National Legislative Assembly on December 8, raised hopes the Chatree goldmine could continue operating but the act will not be effective for a further seven months at the very least.

"It appears that the Act will not be effective to allow Akara's operations to continue beyond December 31," Mr Foulis said in a company statement.

"To recommence operations at Chatree would require significant time and capital expenditure as well as the granting of additional licences and approvals," he said.

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