Phu Bia Mining’s strategic approach to sustainable growth

Phu Bia Mining (PBM) is a familiar name in Laos, known for its operational excellence, environmental responsibility, stringent safety record and world-class mining operations. The Company is also engaged in community development projects providing socio-economic benefits to the government and local communities. The Vientiane Times spoke to PBM about the company’s Laos’ plans, the future of precious metals and how PBM’s focus on technology, innovation and investing in their workforce strengthens their position as sector leaders.

1. What are your company’s production plans for gold and copper this year?
Our company, Phu Bia Mining (PBM), meticulously adheres to an annual budget process that encompasses our planned production of gold and copper. This strategic planning is not only for the immediate fiscal year but also aligns with our long-term Life of Mine plan, ensuring sustainability and foresight in our operations.

The production of copper and gold is fundamental to the ongoing development of our mine and the operational capabilities of our processing plant. These two factors are critical to our production plans, dictating the quantity and quality of the metals we produce.
As of the current year, despite the challenges of operating with low grade ore resources, we are pleased to report that our production has been strong and in line with our expectations. This positive trend reflects the effectiveness of our planning and the dedication of our teams at our operating sites at Phu Kham Copper-Gold mine and Ban Houayxai Gold-Silver mine.
Looking ahead, we have no intention of scaling back our metal production. On the contrary, we are committed to maintaining our output and exploring new opportunities in Laos to meet the growing demands of the global market and continue delivering value to our shareholders and the Government of Laos (GoL).
2. This year, it seems the demand for gold and copper products is increasing in global markets, so how will your company compete with other exporters?
PBM has established sales contracts in place with buyers who recognise the high quality of our copper and gold products. These contracts reflect the demand for our metals, which are highly sought after in their respective markets, and the trust buyers put in our high-quality products.
In response to the increasing global demand for gold and copper products, our company’s strategy does not revolve around competing in the traditional sense. We understand that the marketplace for these commodities is driven by supply and demand dynamics. This approach allows us to maintain a strong position in the global market without engaging in direct competition with other exporters.
Our focus is on maximising value for our shareholders and GoL, ensuring that we contribute positively to the nation’s economic growth.
3. What’s your opinion on the production trends for gold and copper, compared to previous years?
The production trends for gold and copper have always been a topic of interest for investors, economists, and industry analysts. Historically, both gold and copper have seen sustained demand.
Gold has been a cornerstone of financial systems, serving as a safe haven during times of inflation and economic uncertainty. Its allure as a symbol of wealth and its use in jewellery further cement its place in the global market.

Copper, on the other hand, is essential in various industrial applications, especially with the ongoing electric revolution. The demand for electric vehicles (EVs) and renewable energy infrastructure has positioned copper as a critical component for future development.
Forecasting metal prices is notoriously challenging due to the myriad of factors that influence the market. Historical trends and general consensus suggest a continued increase over time, however it’s important to acknowledge the inherent uncertainties in such predictions. Market dynamics, geopolitical events, and technological advancements can all play significant roles in shaping the future prices of gold and copper.
The drivers for demand for gold and copper are distinct yet equally compelling. The status of gold as a safe haven asset is particularly pronounced during periods of high inflation and global risk, providing a buffer against market volatility. Additionally, the cultural and aesthetic value of gold ensures steady demand from the jewellery sector. Copper’s role is more industrially inclined, with its properties making it indispensable for electrical applications. The push towards electrification of transport and the expansion of renewable energy sources are expected to bolster copper demand significantly.
As the world’s population continues to grow, the demand for resources grows with it. This is particularly relevant for copper, as the development period for copper mines is considerably longer than that for gold. This extended timeline, coupled with the increasing demand, suggests that copper prices may see a more pronounced upward trend in the coming years, based on mineral economic fundamentals.
In conclusion, while the future for gold and copper prices is not set in stone, the ongoing demand and the different factors driving it provide a strong indication that both metals will continue to play significant roles in the global economy. For gold, its dual role as a financial asset and a luxury good ensures its continued relevance. For copper, its critical place in the burgeoning electric revolution suggests that its importance – and potentially its price – should only increase over time.
4. Are there any plans to maximise or expand your production base in an attempt to increase your profits? 
At PBM, our strategy is not merely to maximise production, but to optimise it. We believe that optimising production leads to better returns and sustainability, as maximising output can often result in increased operational costs for our copper and gold production. Our approach is a balanced one, ensuring that we deliver great outcomes not just for our company, but for all stakeholders, including our local communities and employees in Laos.
Our focus is on extending the life of our two existing mines, the Phu Kham Copper-Gold mine and the Ban Houayxai Gold-Silver mine, through our ongoing operations. We are also actively exploring and developing satellite open pit and underground mines to feed into our existing processing plants. Our search for additional standalone mines within Laos is part of our commitment to the country’s economic development.

PBM utilises sophisticated software to optimise the value of our mining operations. Our mine plans are designed with a long-term perspective, spanning years rather than focusing on short-term gains. PBM remains dedicated to a balanced and optimised approach to production. Our approach is to ensure we can extend our operations’ longevity, leveraging technology for strategic planning, and overcoming challenges to ensure a prosperous future for our company and the people of Laos.
We are committed to supporting the economic progress of Laos and have recently signed the fourth amendment to our Mineral Exploration and Production Agreement (MEPA) with the GoL that provides additional significant financial benefits to GoL and has seen a relinquishment back to GoL of more than half of our previously agreed concession area. In addition, we are in the process of extending our Life of Mine to 2034, a process that is dependent on our continual access to near mine resources to maintain production levels and in turn, continued benefits to Laos.
However, we face significant challenges particularly with mining permits that have been given to other companies that are directly on top of our high priority, near mine resources, located within our legally agreed concession area, that are essential for us to maintain our production levels.  Without access to these areas, we are unable to finalise our ongoing exploration activities, and therefore cannot turn these resources into a profitable ore supply for our existing high value operations. As PBM is unable to access readily available ore located near to our operations, we must explore alternative underground options. These projects require higher levels of investment, offer lower chances of success and therefore negatively impact the Company’s profit margin. This reduction in profits also lowers the associated dividends payable to GoL. Clearly, this poses a significant risk to maintaining our world class production performance, our current levels of employment and for us to be able to continue to provide the significant direct and indirect benefits to our communities, our Laos based suppliers, GoL and the people of Laos generally. 
We acknowledge the understanding and support of GoL to this highly critical issue and we trust a solution to this problem can be swiftly reached, and one that respects our legal rights and allows us to maintain and continue our world-class, responsible mining operations to continue to support the ongoing socio-economic development of Laos.

5. What are the priorities for your company with regards to environmental protection and community development programmes?
PBM has developed a range of Community Development Programs, in collaboration with local communities and the provincial government, designed to assist and provide our local communities with better living conditions to achieve a more sustainable livelihood and continue to work towards regional socio-economic development both now and long into the future.
The Fund covers six key sectors including: agriculture; education; health, clean water and sanitation; community infrastructure; access to finance and small business development; and capacity building for local agencies. We are delighted to share that our Community Development Fund, will increase from US$380,000 to US$750,000 per year, as part of our ongoing commitment to the people of Laos.
Our Sustainable Livelihoods Program is aligned with the PBM’s mine closure plan, local government frameworks and policies, and the United Nations Sustainable Development Goals.
From exploration to development, throughout our operations and into closure, PBM works tirelessly to limit its impact on the natural environment.
PBM does this by complying with, at a minimum, Laos’ legal requirements and through the effective management of mine waste, efficient use of resources and progressive, ongoing rehabilitation of land where we operate.
For more information visit www.panaust.com.au

By Bounfaeng Phaymanivong
 (Latest Update July 1, 2024)