Chinese potash mining company expands excavation area in central Laos


Residents complain of being shortchanged on compensation for land lost to the project

A Chinese company that operates a potash mine in central Laos will extend its exploration and excavation operations to a further 48 square kilometers (18.6 square miles) in Khammouane province on land used by villagers to make a living.

Some of the villagers have complained that Sino-Agri International Potash Co., Ltd. did not compensate them fairly or pay them anything at all. The firm is a subsidiary of Asia Potash International Investment (Guangzhou) Co., Ltd., which is linked to entities directed by China’s governing State Council.

The company has completed a feasibility study on the extension and is waiting for Lao government officials to approve it, Chu Xiengli, Sino-Agri’s deputy director, told officials from the Ministry of Energy and Mines at a July 17 meeting.

Khao Phone Souklaphane, deputy director of the mineralogy sector of the Ministry of Energy and Mines, told attendees at the meeting that Sino-Agri completed the feasibility study in only 106 days, even though Lao officials believed it would take three to five years.

Much of the potash – a soluble form of potassium used for crop fertilizer – is exported to China, which has made acquiring more of the mineral a priority.

An affected villager in Nong Bok district told Radio Free Asia that the feasibility study indicated the expansion would encroach on land used by many Lao families, and that the company offered to pay them 30,000 kip (US$1.50) per square meter.

Some accepted, but others did not, and two or three villages were excluded from the project, he said.

“It affected villagers’ rice fields, land for crop growing and houses,” said the villager who declined to be named.

Most of the affected residents accepted the offer, though the amounts they were offered were low, said a villager in Tha Khek district.

“The villagers had to accept because many had only one rice field and they could not ignore the government’s order,” he said.

To make matters worse, the government measured the land in 20-square-meter (215-square-foot) parcels but shortchanged the villagers by paying them only for 10-square-meter (108-square-foot) parcels, he said.

Little attention to environment, livelihoods

The mine company is now recruiting new laborers skilled in tunnel digging and welding for the expansion project, one worker told RFA.

“Most Lao workers are from Khammouane province, but some are from other provinces,” he said.

RFA reported in July that an influx of Chinese laborers at the potash mine pushed their number to about 3,000, far higher than that of Lao workers, who numbered about 100 – despite an agreement that mine operators must hire more domestic workers than Chinese.

In recent months, some 1,000 Chinese workers have gone to the mine, prompting layoffs of Lao workers, many of whom have not been able to find jobs, residents and government officials said at the time.

The Khammouane provincial government and the Lao Ministry of Labor and Social Welfare set up a committee to determine the negative impacts of the project, said an official who declined to be identified because he is not authorized to speak to the media.

“Right now, the company is not digging yet, but it is building the infrastructure to the mine and the factory,” he said.

The mining area originally covered 35 square kilometers (13.5 square miles) when Sino-Agri began operations in Khammoune province in 2021. The company kept expanding the excavation area, and its operations now cover more than 214 square kilometers (83 square miles).

When the Lao government grants mining concessions to foreign companies — mostly Chinese firms — they pay little if any attention to the impact of their operations on the environment and livelihoods of locals, said a Lao mining expert.

Gold mine in Savannakhet

The Chinese also are involved in the mining and extraction of other valuable metals in Laos.

A gold mine in Sepon district of Savannakhet province has produced about six tons of gold — more than expected — this year, though villagers said they have not reaped any financial benefits and that the mining operations have destroyed forests and rivers that they and their animals use as water sources.

In 2018, China’s Chifeng Jilong Gold Mining Co. bought a 90% stake in the mine’s operator, Lane Xang Minerals, for US$275 million from MMG Ltd., with the concession period extended to 2033.

“Since a Chinese company bought this mine from Lane Xang Minerals, it has extended into digging in more areas, destroying more forestland, [and] polluting rivers with chemicals,” said the resident who declined to be named for fear of retribution for speaking publicly.

In addition, the company has not developed local infrastructure, and residents have had difficulty getting food and generating income so they can feed their families, he added.