Thailand—forcible closure of gold mine sours investment climate
Foreign investors will not look favourably upon the government’s forcible closure of a foreign owned gold mine in Northern Thailand. The mine owners, Australian listed Kingsgate, have argued that Thai authorities have not been able to produce any evidence of alleged environmental breaches by the mine. Furthermore, the mine owners, have not been compensated. The mining company has tried to resolve the dispute with the government, but to no avail.
Thailand has traditionally been a darling amongst foreign investors. Indeed, there has only been one investor vs state dispute over the last 30 years. But since the 2014 coup, net foreign direct investment has fallen from 4% of GDP in 2013 to less than 1% of GDP in 2016. Investors have become weary of the uncertain political environment—the unelected government has repeatedly delayed elections, which were initially scheduled for 2016. The latest mine closure will add to investor angst.