Gold production at the Sepon mine in Savannakhet will cease in December, in accordance with a statement from MMG Lane Xang Minerals Sepon (MMG LXML Sepon).
Copper production – which generates about 92% of total revenue at Sepon - will continue.
Copper production at the mine remains strong, with a record output of more than 90,000 tonnes achieved in the 12 months ended 30 September 2013.
Gold production was originally scheduled to cease in late 2011. However, a significant increase in the gold price provided the opportunity to extend production through processing lower grade ores.
Gold prices have fallen considerably this year, and the cost of producing gold at Sepon has doubled since 2012 due to the declining availability and grade of gold ore. Continuing to produce gold at Sepon would be uneconomic.
“We appreciate the significance of the Sepon gold and copper operation to our people, their families, and the broader community,” said Rick Watsford, General Manager Sepon.
“However, at this time we need to focus on maximising efficiency in copper production to ensure we can continue to sustainably grow the business and build a long term future at Sepon.
“We are reviewing the structure of the operation to ensure we meet the future needs of the business and deliver a solid return to shareholders, including the Lao Government. Unfortunately, redundancies cannot be avoided. For local employees these will be minimised and mitigated as far as possible through community development and livelihood programs,” he said.
Gold pour at Sepon.