Laos' key gold mine sheds 420 employees

MMG LXML Sepon confirmed this decision in a press release yesterday. 

The restructuring resulted in the reduction of 360 Lao positions and over 60 expatriate technical advisory positions. The expatriate workforce has been reduced by more than 30 per cent. 

The company explained that these changes were made to enhance the capacity of the Lao workforce as well as improve efficiency and competitiveness to meet international economic conditions. 

The restructuring is also aimed to ensure it (the Sepon mine) will continue to deliver strong returns to the Lao government and the local community, according to the press release. 

“We acknowledge the importance of Sepon to local families, our employees and the community. We are making these changes now to ensure Sepon can continue to grow in the future,” general manager Rick Watsford said in the press release. 

Lao employees who are laid off will receive benefits in accordance with Lao Labour Law. MMG LXML is also providing job search and financial training and has consulted other employers to assist their laid-off staff, the company stated. 

Sepon mine ceased gold production in December 2013 when the plant was placed in care and maintenance. 

But its copper production has expanded, with record production of over 90,000 tonnes in 2013. Production now greatly exceeds Sepon's original design capacity of 65,000 tonnes per annum. 

It was reported previously that the decision to cease gold production was made after the company realised that continuing to produce gold at Sepon would be uneconomical. 

It explained that gold prices had fallen considerably last year and the cost of producing gold at Sepon has doubled since 2012, due to the declining availability and grade of gold ore. 

MMG LXML Sepon said gold production was originally scheduled to cease in late 2011. However, a significant increase in gold prices provided an opportunity to extend production through processing lower-grade ores. 

Gold production at Sepon saw continued reductions after reaching its peak in 2005, during which it produced about 100,000 ounces a year. In 2012, the company produced 70,000 ounces. It was reported recently that the company expected to produce 40,000 to 50,000 ounces of gold in 2013. 

MMG LXML Sepon said the suspension of gold production at the mine would not cause a significant impact on its overall revenue generation. 

Since production commenced in 2003, MMG LXML Sepon has paid over US$1 billion to the Lao government in taxes and royalties, making the company the largest taxpayer in the country. 

In addition, MMG LXML Sepon has invested over $5 million through the Sepon Trust Fund in community development programmes in Vilabouly district.