Mineral Activities | Investment Promotion Department

APPLICATION FOR INVESTMENT IN MINERAL ACTIVIES

A. Procedures of Prospecting and Exploration

- Investors (legal entity) whose objectives are to operate the mineral business must request the approval for primary data collection of any minerals from natural resource and environment sector (by submitting the request to Geology Department, MoNRE or provincial Natural Resource and Environment Sector);

- The primary data collection will be conducted in the office and at the site to study the mineral appearance locations, environment and collect the surface sample for analysis (and that the record of the primary data collection and the report of primary mineral data collection will be made);

- After the primary data collection, if sufficient data are found, the domestic and foreign investors who have objectives to operate the mineral business (concession for mineral prospecting and exploration) must submit their request to Planning and Investment Sector for consideration in accordance with the procedures stipulated in Investment Promotion Law.

The investors must submit their request to PI Sector at central levels or local levels in accordance with the decentralization as follows:

No.	Considered by Central Level	Considered by provincial, VTE levels
1	All mineral prospecting and exploration activities (except the mineral prohibited by law)	Mineral excavation by handicraft (using basic tools and without excavators) approved minerals for handicraft excavation are: alluvial gold, alluvial tin and tailings
2	Industrial mineral exploitation activities (using machinery in excavation)	Excavation activities of stones, sand for construction work
3	Mineral processing activities
4	Exploration-exploitation activities of oils and gas

Complementary documents in submitting the request

Application for investment in mineral printing form;
Brief proposal about the project development, certified by president or director-general of the company (or attorney);
Histories-Experiences of the company, license or business registration certificate of the company;
General business agreement (in case there are two company or more);
Power of Attorney for representative of stockholders or company, in case the person is not at the top position of the company;
Map of project location (global positioning scope of concession area);
Documents about project technical data;
Documents about project primary data collection;
Supporting letter of financial institutes or banks (if any);
other related documents (if any);

The submitted application must be of 6 sets and the investor must maintain 1 copy as the evidence.

Processes for considering the approval request and the issuance of minerals concession registration certificate for prospecting and exploration activities

Remarks: After the investors have received concession license for prospecting and exploration, the investors request the approval for prospecting and exploration activity operation from Ministry of Natural Resource and Environment (MoNRE).

Any company who has received the searching and exploration rights from the Government must create an operational plan, starting from general searching in the scope of Concession Agreement, followed by the exploration in extracting areas. The searching and exploration plans of each period must be legalized by Ministry of Natural Resource and Environment before the implementation. The operational plan is divided in 3 steps:

1. Prospecting period

Study of data documents;
Field activity operation about geological status and mineral existing phenomena;
Summary of mineral characteristic assessment;
Area selection for possible exploration.

2. Exploration period

It is the study of geological structure and mineral sources in the selected area for exploration;
It comprises of the works of geology, geophysics, survey, excavation, canalization, well drilling, sample collection, analysis and others;
To know the accumulative quantity and quality of the minerals;
Assess the primary economic-technical possibility and technical conditions of the excavation;

3. Primary Feasibility Study (FS) creation period

The FS possibility study is with 1 year validity and renewable no longer than 1 year based on the consideration of Ministry of Natural Resource and Environment;
In this step, the focus will be emphasized on the calculation result of mineral accumulative quantity to be used in creating a clear analysis that is closed to the standard of implemented mineral accumulative quantity classification;
Furthermore, it is an initial assessment of planning for excavation, processing, production and distribution;
Initial assessment on environmental and social impact, as well as the assessment of economic effectiveness of the project.

Remarks: The 3 periods of activity operation depend on the negotiation outcome;

Deposit of warranties in mineral searching and exploration

Concession land area	Warranties
1-300 Km²	50.000 US dollars
301-500 Km²	100.000 US dollars

For the warranty deposit in non-metal minerals, energy minerals, and liquid minerals, the specific regulations in determining areas and amount of the warranties are applied

B. Procedures of applying for exploitation and processing

After the investors have received the prospecting-exploration contract operational paper signed with the Government and if the detailed feasibility study (FS) or economic-technical analysis legalized by the Natural Resource and Environment Sector indicates that it is economic and the assessment of environmental and social impact has been legalized by the environmental and social impact unit, the investors can propose to move to the step of exploitation and processing in line with the rules and regulations.

The process for considering the approval requests and issuing concession registration certificates in mineral exploitation and processing activities

Remarks: After the investors receive concession registration certificate (exploitation and processing) investors must obtain the license for exploitation and processing activities from Ministry of Energy and Mines (MEM).

Land concession fee for mineral activities:

To implement in line with the Lao PDR President’s Constitute on the State-Owned Land Rental and Concession Fee No. 02/President, dated 18 November 2009. This depends mainly on land type/mineral type, i.e., land rental/concession rate of lead ore will be as follows:

General searching period:1 US dollars/hectare/year or 100 $/km2/year.
Exploration period:2 US dollars/hectare/year or 200 $/km2/year.
Period of creating economic-technical analysis3 US dollars/hectare/year or 300 $/km2/year.
Period of excavation and processing 100 US dollars/hectare/year or 10,000 $/km2/year.

Land concession rate in mineral activities (based on President’s Statute on Rental and Concession Rates of State-Owned Land No. 02/President, dated 18/11/2009)

		Rate of concession (US$/ha/year)
No	Mineral types	Prospecting	Exploration	Feasibility Study (FS)	Exploitation	Remarks
1	Precious and Semi-Precious Stones
	• Diamond, Ruby, Sapphire, Emerald, jade	2	2	3	700
	• Spinal, Garnit, Topaze…	1	1	2	500
	• Opal, Agate, Amethyst	1	1	2	300
2	Precious metals: • Gold, Platinium • Silver	1	2	3	100
3	Base Metals: • Copper • Lead, Zinc	1 1	2 2	3 3	80 60
4	Tin and Tungsten • Tin and Tungsten	1	2	3	100
5	Minor metal: • Antimony, Molybdenum, Bismuth, Mercury, Aluminium	1	2	3	60
6	Ferrous metals: • Chromium Nickel • Iron, manganese, Pyrite	1 1	2 2	3 3	80 70
7	Industrial minerals • Alunite, Asbestos, Barite, Laterite, Kaolin, Limestone, marble	1	2	3	50
8	Stones: (Construction materials) sandstone, andesite, granodiorite, basalt, granite,…	1	2	3	50
9	Evaporate minerals: • Gypsum • Potash • Halite	1 0.5 0.5	2 1 1	3 2 2	30 20 20
10	Energy minerals: • Coal • Anthracite • Lignite • Peat	1 1 0.5	2 2 1	3 3 2	70 70 30
11	Ground water, mineral water, natural thermal water	0.5	1	3	20
12	Oil and Gas	Based on the signed contract between Government and company

Remarks:
• In case there are several types of minerals in the concession zone, calculation shall be based on the main minerals approved by the Government.
• Concession rate at prospecting step increases from 0,5-0,6 dollar/hectare/year to 0,5-2 dollars/hectare/yea ror 3,3 times on average.
• Concession rate at exploration step increases from 0,5-0,7 dollar/hectares/year to 1-2 dollars/hectare/year or 2,8 time on average.
• Concession rate at FS step increases from 0,8 dollar/hectare/year to 2-5 dollars/hectare/year or 6,2 times on average.
• Concession rate at exploitation step increases from3-12 dollars/hectare/year to 20-700 dollars/hectare/year or 8,2 times on average.