Monthly Archives: November 2011

Udon Thani Potash Project

Udon Thani Potash Project © Steve Graham

Udon Thani Potash Project

Conceptual Layout Udon Potash Mine

Whilst attending a recent Udon Thani Chamber of Commerce meeting, I met a representative from the company that is developing the potash mining project in Udon Thani. We spoke briefly about the project and I asked if I could interview someone high up the chain of command with a view to getting the latest information about where the project is going.

Potash is used in the production of fertilisers, so on paper this would look like a good idea as the local communities could benefit from the business that would be generated and there would be a local supply of fertiliser on hand at an attractive price. I have read many negative articles on the internet and in the newspapers concerning the human rights aspects of what is proposed; however, the company who is conducting the development doesn’t seem to publicise their side of the argument. My research seemed very one sided, so I wanted to address the balance (in my own mind, at least).

Months later, I found myself on the other end of a telephone line talking to Khun Visuth Jirathiyut, the Managing Director of Asia Pacific Potash Corporation (APPC) Ltd. Our conversation lasted for about an hour and I was able to pose some questions and receive answers that our readership may find interesting concerning a project that will take 25 years (3 years construction and 22 years for the operation).

I found that there is a certain amount of distrust between local communities and APPC. This goes back to the early 1970s when allegedly a ten year survey was carried out by the Thai government without the full knowledge of the local people. Nobody was sure whether the officials were looking for oil, water or something else.

NGOs have taken up the case for the local communities involved and publicised a list of grievances including land rights violations, environmental damage due to initial exploration, lack of informed consent, bad communication between agencies and local residents, perceived lack of credibility of initial Environmental Impact Assessment, fears of contamination, loss of livelihood, mental anxiety, community division and potential loss of culture. All these subjects were taken from one report by the Educational Network for Global and Grassroots exchange (ENGAGE) published in 2003.

Khun Visuth informed me that there are two sites, Udon North and Udon South, of which Udon South is where the proposed first development will begin. Here, there is an estimated 300 million tonnes of potash of which 120 million tonnes will be excavated into ‘rooms’ and the remaining material will act as pillars to support the load above the mining area, leaving 180 million tonnes behind. Khun Visuth explained that the Room and Pillar method of mining requires that the rooms are cut underground with a continuous miner type rotating head which means that no explosives would be used as part of this process.

Let’s not fool ourselves, mining is a dangerous business and requires plenty of planning and forethought. The main problem for this project whilst drilling is the chance of hitting water and flooding to occur. Safety measure can be in place; however, it is always difficult to take on nature, especially underground.

The total mining area for Udon South is a proposed 26,000 rai. 1500 rai of land has been bought in order to construct a processing plant which will separate the sodium chloride and the potassium chloride using what they call a flotation process. The potassium chloride is the material required for this project. The left over material (tailings) will be backfilled into the “rooms” after a period of 3 to 4 years to assist with the added prevention of subsidence. Khun Visuth assured me that the ground where this processing plant is to be built will be fully prepared and protected with a monitoring system (water, air, dust and soil subsidence) in place to check for any form of contamination as the company appreciates that the water table at this location is not very deep.

One of the main concerns from the ENGAGE report was the perception by local people that the initial environmental impact assessment approved by the Thai government was flawed. A second study has been underway for sometime now in order to address the fears of locals and interested NGOs. Due to a change in Thailand’s constitutional law, it is proving a lengthy process; however, two of the three stages have been completed to date. The first public scoping phase and the visit to the villages affected has taken place and all that is left is the public review stage before being submitted for approval by the Ministry of Natural Resources and Environment.

So how will the local community benefit from this project, I hear you ask? Well, 900 jobs should be created directly for local people with a further 4,500 indirectly. Landowners within the mining area are set to receive 48,000 baht per rai without obligation and 250 scholarships have been provided for local students, increasing to 500 once production has started.

The government will receive a 7% royalty payment over the period which has been calculated as 37,372 million baht @400 US Dollars per ton and an exchange rate of 30 baht to 1US Dollar (prices are nearer 500 US Dollars now). This money is to be divided up with 40% going to central government, 20% to the districts in the mining area, 20% to Udon Thani Administration, 10% to other districts in Udon Thani and 10% to other districts in Thailand.

A compensation fund has been set up administered by the local community in the event that there is any environmental damage during the mining and production processes.

Khun Visuth and APPC are hopeful that their license will be granted even though there are many more steps of the scrutinisation process to be approved by numerous government departments. We have to wait and see as to whether the second Environmental Impact Assessment will be accepted to the satisfaction of the Ministry of Industry, the Ministry of National Resources and Environment and of course, the general public sometime next year. Even then APPC will allocate funds to hire another consultant to review the study before being presented to a public hearing for all stakeholders in accordance with the Mining Act and onward submission to the mining licence committee under the Ministry of Industry for consideration.