KCN 5.17% $1.22 kingsgate consolidated limited.

News: KCN INTERVIEW-Kingsgate CEO says arsenic, manganese never used at Thai mine

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    (Corrects to remove reference to cyanide in headline)

    • Thai mine never used manganese, arsenic: operator
    • Government order to close was a "shock and surprise"
    • Australian operator says yet to recoup investment

    Thailand's only working gold mine has never used the toxic substances found in people living nearby, the chief executive of the mine's Australian owner said on Thursday, expressing shock at a government order to shut down.

    The snap decision by the Thai cabinet to close the Chatree mine would hurt foreign investor confidence, said Greg Foulis, Chief Executive of Kingsgate Consolidated (KCN)

    Thailand's cabinet announced the closure last week, but authorities have yet to explain their reasons to Kingsgate or its local unit Akara Resources, Foulis said.

    Farmers and villagers say the mine has poisoned residents, crops and livestock. In January 2015, a government team said that more than 300 people living near the mine tested positive for arsenic and manganese.

    Local people and environmentalists have also complained of cyanide contamination from the mine's refuge, or tailing, pond.

    "We do not use arsenic or manganese in our operation," Foulis said, speaking to Reuters in the Thai capital. Cyanide levels were low and none had escaped the tailing pond, he said.

    "A cigarette or a cup of coffee may contain similar levels of cyanide to what's in our tailing facility."

    The substances were naturally occurring and the company had found similar levels in people it tested people 50 km (30 miles) away from the site, Foulis said.

    "The government, ourselves, and independent auditors, nobody has found any contamination that is attributable to our operation," he said.

    Minority groups may have had an outsized influence on the government decision, he added.

    "We accept that there's always going to be minority groups that don't want certain businesses, industries and investments," he said. "However, the government still hasn't found a mechanism to deal with protests or interest groups."

    Over 15 years, Kingsgate had spent around $1 billion on the mine, he said. It would spend about the same again if it were allowed to operate the concession through to its expiry in 2028.

    It was a major contributor to the local economy and would pay around $100 million in royalty and taxes over the 12 years to the end of the concession, he said.

    The firm has yet to recoup the investment it made to expand the mine five years ago, when it took on an A$80 million ($60 million) credit facility, he said.

    Funds invested in Kingsgate may be reluctant in future to risk exposure to Thailand, he said.

    "The investment landscape has changed unexpectedly on them," he said. He said he hoped to better understand the Thai government's decision through meetings on his trip to Thailand.

    "In the end, what this comes down to is a broader philosophical question," he said. "The government just decided it doesn't want mining."

    ($1 = 1.3910 Australian dollars)

 
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