When Thailand’s junta leader-turned-prime minister used his absolute power to suspend gold mining — prompting an Australian miner’s shares to plummet 19 percent in a single day — he complicated efforts to attract foreign investors already spooked by military rule.
Prime Minister Prayuth Chan-Ocha announced the order last week, saying that gold mining will be suspended from the start of the year in a bid to address health and environmental concerns. By issuing the order under Article 44 of the constitution enacted when his junta toppled the elected government in 2014, Prayuth 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 percent last Wednesday and are down nearly 40 percent 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 neighbors at an expected 3.2 percent this year. Exports have steadily fallen, dropping the most in three months in October.
Foreign direct investment fell to $10.8 billion in 2015, down from $16.7 billion in 2013, according to UN figures. Neighbors Indonesia and Malaysia attracted higher amounts last year, the data shows.
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