Bangkok: Thailand's military government has thrown a lifeline to Australian gold miner Kingsgate Consolidated just three weeks before the scheduled closure of its part-owned Chatree mine in central Thailand.
Parliament has passed a mineral bill allowing gold mines to operate legally in the country, despite an announcement in May that all mines must cease operation by New Year's Eve.
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Gold mine closure's devastating village effect
Australian-run Chatree gold mine in Thailand's Phichit village has been ordered to close due to a controversial decision.
Chatree, operated by Kingsgate subsidiary Akara Resources, had already started sacking 1000 workers and announced plans to put Thailand's biggest gold mine under a care and maintenance program next year.
The new law awaiting the signature of Thailand's King Maha Vajiralongkorn Bodindradebayavarangkun no longer requires mining companies to have metallurgy licences, Bangkok's The Nation newspaper reported.
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"We are totally mystified,"Â Kingsgate chairman, Ross Smyth-Kirk said. "We've had no notification, no notice that there was anything going on in Parliament about [the new bill].
"We'll have to wait for some kind of official [notice]."
The Chatree mine's licence expires on December 31 but the company has a valid concession to operate until 2028.
In May, Thailand's Prime Minister Prayuth Chan-ocha, a former army general, cited a public outcry over health and environmental issues for ordering the closure of Chatree, which shocked foreign companies with investments in Thailand.
But Akara Resources insisted that multiple studies, including by Thai government agencies, had failed to produce any evidence the mine had damaged the environment, the health of workers or nearby residents.
In November, Fairfax Media spoke to elected district chiefs of communities around the mine about their last-ditch appeal to the government to reverse its decision.
"The mine has done nothing wrong," said Fai Mahasat, the head one of four districts by the mine. "Many people here will suffer and lose their livelihoods. It's crazy."
Thailand has reaped tens of millions of dollars in taxes and royalties from Thai Stock Exchange-listed Chatree, which opened in 2001.
Until the order came to close, Akara had been planning to invest a further $US1 billion ($1.34 billion) to continue mining on adjacent leases for another 20 to 30 years, raising several billion dollars in revenue, company executives said.
The news is expected to put a rocket under Kingsgate's share price on Monday. Chatree is its only operational gold mine, which means its fortunes have been heavily influenced by the troubles in Thailand. Â Â
In 2010, underpinned by the success of Chatree, Kingsgate shares were worth $12. The company had a market valuation of more than $2.5 billion.
Weeks ago, the stock hit a low of 20¢ after coming out of a five-month trading suspension the company instigated while attempting to deal with the Thai authorities.Â