Thai Mining Conflict Feared Fatal

Southeast Asia

May 26, 2005
Thai Mining Conflict Feared Fatal

By Vincent MacIsaac

BANGKOK - Thai villagers battling a Canadian company's 12-year effort to dig a massive mine beneath them are preparing for the conflict to turn fatal, as the company, Asia Pacific Resources (APR), intensifies its efforts to obtain its long-delayed mining lease.

It's a struggle in which some of Thailand's poorest villagers are battling a sophisticated, well-funded public-relations campaign with hand-painted signs.

Five leaders of the Udon Thani Conservation Group have been receiving death threats since late March from representatives of companies promised contracts by APR, said activist Suwit Kularbwong. Over the past five years he has hitchhike between villages to set up the conservation group in the country's impoverished northeast, but now he said he only travels as part of a group, and never at night.

A spokeswoman for APR declined to discuss the death-threat allegations, but did admit that relations with villagers living above the planned 25-square-kilometer mining site took a turn for the worse on Tuesday, when APR surveyors had to call for police assistance after being "blockaded" by a group of villagers.

"We push, but we do not hit," said one community organizer, who noted that villagers regularly "blockade" APR officials from entering their villages and do not trust the information APR supplies them in its newsletter, Jak Jai Potash (Potash from the Heart). Villagers were especially incensed by advertorials placed in Bangkok newspapers implying that APR had a cosy relationship with them, she said.

The stakes in this long-simmering conflict are immense - a US$6 billion deposit of high-grade sylvanite potash, which is used to make chemical fertilizer - and the livelihoods of 20,000 villagers.

What makes the deposit even more lucrative is its shallow depth and proximity to China, where potash imports have more than doubled over the past eight years, according to a report from investment bank Paradigm Capital, which has advised its clients that APR's shares could more than triple in value if it receives its mining lease.

The death-threat allegations are being taken "very seriously" by the commissioner of the Thai Royal Police for the northeast region. Lieutenant General Achiratwawit Suphansap said he had set up a high-level working group to investigate the allegations and that it would report back to him next week. The Udon Thani police force, which is under his jurisdiction, would ensure the safety of all non-governmental workers in the province, he said. The commissioner also noted that the conflict between the villagers and APR was complex and would take a long time to settle.

Senator Jon Ungphakorn - who in 2002 led a failed legal challenge against changes to Thailand's minerals act, which allowed mining projects to proceed without the permission of surface landowners - said his main concern now was for the project's opponents.

"Traditionally, I'm worried about assassinations of local leaders by vested interests. Local villagers who try to oppose powerful people getting bumped off are a common occurrence," he said. "In rural areas there is a strong patronage system of entrenched interests and they will assassinate anyone who challenges them.

Ungphakorn said he has "strong reason to suspect the company is behind moves to set up thuggish groups to counter the project's opponents".

News of the conflict has reached all the way to Canada's parliament, where, according to Catherine Coumans of MiningWatch Canada, the activities of Canadian mining companies in developing countries are coming under intense scrutiny by a subcommittee over concerns they are damaging the country's squeaky-clean image.

Ed Broadbent, member of parliament for Ottawa Central and former leader of the New Democratic Party, said, "There is lots of evidence that a number of Canadian mining companies have used mining techniques that abuse their workers and defile the environment. Companies should no longer be allowed to do abroad what they cannot do at home in Canada, whether we are talking about workers or the environment.

"What we need is a Canadian law that prohibits this kind of activity," he said. The pioneering legislation spearheaded by Broadbent - Bill C-369 - had its first reading in Canada's House of Commons on April 22.

Coumans said mining disputes were becoming more brutal as China's demand for base materials soars. "What I am seeing is that China's urgent need for base materials - potash, nickel, copper, etc - is pushing projects ahead that have serious environmental and social flaws, and are strongly opposed by local communities," she explained.

APR applied for its mining lease in May 2003, but its environmental impact assessment (EIA) set off a furor among academics, environmentalists and some politicians in Bangkok. A committee assigned to study it found it to be deeply flawed.

Environmentalists from Bangkok to Ottawa have warned that salt pollution from the mine could destroy farmland and water supplies over a vast area, and note that even APR's controversial EIA predicts the ground will sink up to 70 centimeters over the planned 25-square-kilometer site.

Still, APR president John Bovard remained upbeat on the company's chances of winning a mining lease. "The mining lease is going forward ... there are no roadblocks," he told investors in Toronto in March. In his lengthy conference call he blamed a slow-moving Thai bureaucracy, the lack of a mining culture in Thailand and the December 26 tsunami for the delays.

APR has invested more than C$90 million (US$71.35 million) in the project so far, according to its financial records, and it is seeking a joint-venture partner in China to help develop the mine. It has also signed an agreement with PAG Worldwide Ltd that would see PAG receive US$5 million if it secured APR's mining lease by September 30, according to APR's first-quarter report.

A company source said the surveying has been completed and APR is now negotiating the next step in obtaining its mining lease with provincial officials in Udon Thani - a public hearing.

Bovard told investors in Toronto the public hearing into the country's first large-scale mining project could be wrapped up in as little as three days.

Senator Ungphakorn has said,"It's the type of project that traditional politicians like because it's likely to line their pockets. Those in power are sure they can push this through."

But the maverick senator also warned he will challenge the project in the country's administrative court and the activist Suwit said villagers will blockade any attempt to construct mining facilities.

Community activist Kananikar Kijtiwatchakul said some villagers were threatening to resort to violence. "The strategy of the conservation group is to make sure it is strong enough to function without its leaders," she said, noting that 12 environmentalists have been killed in Thailand in the past four years.

Vincent MacIsaac is a Bangkok-based journalist.