Bangkok: Australian miner Kingsgate is seeking compensation from Thailand's military government over its controversial order to shutdown the company's gold mine in northern Thailand, forcing the sackings of more than 1000 Thai workers.
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Kingsgate's chief executive officer Greg Foulis said after numerous unanswered requests for meetings with Thailand's prime minister Prayuth Chan-ocha and his cabinet members his company believed it has no option but to "exercise its rights as a protected Australian investor under the Australia-Thailand Free Trade Agreement."
Two days before the Chatree mine operated by Kingsgate subsidiary Akara Resources was forced to close on December 31, Mr Prayuth, a former army chief who seized power in a 2014 coup, warned Kingsgate it would be a waste of time suing his government and said he only ordered the mine's "suspension" not closure.
"We just suspended the gold mine operation in waiting for the new Mineral Bill to become law and the setting up of a mining committee, so they can investigate the mining operation and its impact on people," Mr Payuth was quoted by The Nation newspaper as saying.
The closure of the mine that reaped tens of millions of dollars in taxes and royalties for Thailand halted plans for the company to invest a further US$1 billion to continue operating on adjacent leases for another 20 to 30 years.
In December, Mr Prayuth promised justice for the company and local people who have been devastated by the loss of jobs and closure of businesses linked to the mine.
He did not elaborate.
For months Mr Payuth's government had been sending out confusing signals about the future of the mine which had been the target of a sustained campaign by a small number of local land owners and environmentalists.
But Akara insisted that multiple studies, including by Thai government agencies, failed to produce any evidence the mine had damaged the surrounding environment, health of workers or nearby resident since it opened in 2001.
The order to close the mine shocked business leaders in Thailand at a time foreign direct investment has dramatically fallen in the country and its economy remains sluggish.
The Turnbull government through officials of the Australian embassy in Bangkok supported Kingsgate's attempts to avoid the mine's closure.
Mr Foulis said Kingsgate notified Mr Payuth on Monday that his company wants to engage in consultations with his government as required under the free trade agreement that Australia and Thailand signed in 2004 and came into force in 2005.
The agreement contains a range of provisions relating to investment protection.
"Among other things, these provisions guarantee certain rights to Australian investors in Thailand, including the right to seek impartial resolution of disputes with the Thai government relating to covered investments by way of arbitration before an international tribunal," Mr Foulis said in a statement to the Australian Stock Exchange.
Mr Foulis said failing a mutual outcome in initial consultations international arbitration proceedings could take an undetermined amount of time to resolve and could involve significant expenditure by Kingsgate.
He said it should be noted that the outcome of any consultations or arbitral proceedings is uncertain.
Kingsgate chairman Ross Smyth-Kirk said on the eve of the mine's closure it would take an "ironclad guarantee" that his company would be allowed to operate without interruption before it again invested in the military-run country.
