Economic report quantifies the positive role of mining in Laos

09 Jun 2010 12:00 AMMedia Release

MMG Sepon launched today a report setting out the macro-economic contribution of mining to the Lao economy. The report quantifies the positive role that mining can play in achieving balanced economic growth.

The report highlights that the Sepon mine constituted as much as 8.2% of Lao PDR Gross Domestic Product (GDP) during the years 2003-2009. The various stages of expansion at Sepon also contributed to higher national growth rates over the period. The higher growth helped ensure the government’s growth targets were met.

This contribution to national economic development also demonstrates the significant benefits the Sepon mine has delivered to all Lao people equating to a 1% increase to GDP per person.

Sepon production constituted almost half of the Lao PDR’s exports in 2006. However, in percentage terms, Sepon production decreased to around 31% of total exports in 2009, as new projects in mining and hydropower have increased the country’s export earnings. The report also shows the impact of the Global Financial Crisis on the project’s sales revenue which was close to $US100 million less in 2009 than at its peak.

The revenue from the project continues to make a substantial contribution to government revenue. The project contributed over $US430 million dollars since it commenced. Importantly, the report concludes that there is no evidence in the Lao PDR to support the “resource curse” theory, essentially an appreciation of the real exchange rate making life difficult for other exporting industries, when examining the circumstances of the Sepon mine.

The report was prepared by the Centre for International Economics (CIE) which is based in Canberra, Australia. The CIE has undertaken projects for international organisations and bilateral donors to the Lao PDR. The CIE has prepared regular reports on the project since 2003.

For further information:
Pasanngane Keoboualapha

External Relations and Media
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