Mining and Minerals Licensing in Thailand

TL;DR

Mining in Thailand operates under the Minerals Act B.E. 2560 (2017) (พระราชบัญญัติแร่ พ.ศ. 2560), which replaced the prior Minerals Act B.E. 2510 (1967) and the Mineral Royalty Act. The principal regulator is the Department of Primary Industries and Mines (DPIM / กรมอุตสาหกรรมพื้นฐานและการเหมืองแร่) under the Ministry of Industry. The Act creates a three-tier licensing regime: prospecting (อาชญาบัตรสำรวจ), exploration (อาชญาบัตรพิเศษ), and mining (ประทานบัตร). Mining licences require an Environmental Impact Assessment (EIA) under the Enhancement and Conservation of National Environmental Quality Act B.E. 2535 (1992) as amended. Foreign-controlled mining operations face Foreign Business Act B.E. 2542 (1999) restrictions; BOI promotion is available for mineral processing and may carry Section 31 tax incentives. Thailand maintained a moratorium on new gold-mine licences from 2017 to 2025, and in 2022 imposed restrictions on certain rare-earth and tin operations pending policy review.

Statutory Framework

The Minerals Act B.E. 2560 (2017), in force since 29 August 2017, consolidated and modernised mineral law:

• Unified the prior 1967 Minerals Act and the Mineral Royalty Act B.E. 2509 (1966).
• Created a Minerals Management Master Plan approved by the Cabinet, classifying land by mineral suitability and restricted zones.
• Established the National Minerals Management Policy Committee chaired by the Prime Minister, with the DPIM as secretariat.
• Introduced clearer public-participation requirements before licences in significant cases.
• Reformed the royalty regime with tiered rates by mineral and grade.

Supporting regulations are issued by the Ministry of Industry and DPIM through Ministerial Regulations, Notifications, and Cabinet Resolutions.

The Three-Tier Licensing Regime

Each tier is preceded by a prior tier in most cases. The mining licence is the substantive permission to extract; it carries the EIA obligation, royalty obligations, and surface-fee obligations.

Environmental Impact Assessment

Under the Enhancement and Conservation of National Environmental Quality Act B.E. 2535 (1992) as amended (notably by B.E. 2561 (2018)), mining projects above defined thresholds require an EIA approved by the Office of Natural Resources and Environmental Policy and Planning (ONEP). Particularly sensitive categories — open-pit mining above defined areas, projects in forest reserves, or impacting communities — require an Environmental and Health Impact Assessment (EHIA) with mandatory public hearings.

The 2018 amendment significantly tightened public-participation and consultation procedures following the experience of the Wang Saphung and Loei gold-mine disputes. Approvals can take 12-24 months and frequently face legal challenge before the Administrative Court.

Foreign Business Act Restrictions

Mining is a List 1 / List 2 restricted activity under the Foreign Business Act B.E. 2542 (1999). Foreign-controlled companies (>49 % foreign ownership) generally cannot hold mining licences directly. Compliant structures include:

• Thai-majority joint-venture companies with foreigners as minority shareholders.
• BOI-promoted mineral-processing entities, where BOI sometimes permits up to 100 % foreign ownership for processing activities downstream of mining (concentration, smelting, refining) while the mining itself remains in Thai-majority hands.
• Service and consultancy entities providing technical services to Thai mining licensees — foreign-controlled entities can lawfully provide these services under the FBA.

BOI Promotion for Mineral Processing

Under the Investment Promotion Act B.E. 2520 (1977), BOI promotion categories include downstream mineral processing — smelting, refining, mineral-based chemicals, fluorspar concentration, rare-earth separation in defined cases. Eligible projects can receive:

• Section 31 corporate income tax holidays (3-8 years depending on category).
• Section 32 additional incentives for investments in special economic zones or specific provinces.
• Tariff exemption on imported machinery.
• Permission for foreign experts under Smart Visa or BOI work-permit channels.

Mining itself (raw extraction) is generally not BOI-eligible, although coordinated downstream processing can secure incentives that effectively support the overall project.

Royalty Regime and Surface Fees

Royalties are payable on extracted minerals under the Minerals Act and Ministerial Regulations. Headline features:

• Tiered rates by mineral category — typically 4-7 % ad valorem for industrial minerals, higher for precious minerals and tin, with specific schedules for limestone, granite, gypsum, etc.
• Reference prices set by DPIM based on international benchmarks where applicable.
• Surface fees — annual rental per rai of licence area, increasing through the licence life to encourage efficient use.
• Royalty revenue is shared among national, provincial, and local administrative bodies; local-share allocation since 2017 has been strengthened to deliver direct benefit to host communities.

The 2022 Restrictions and the Gold-Mine Moratorium

From 13 May 2017, the Cabinet imposed a moratorium on new gold-mine licences and on renewal of existing gold licences pending policy review following the Akara Mining dispute. The Akara case (Kingsgate Consolidated/Australian investor) gave rise to a UNCITRAL arbitration under the Thailand-Australia FTA, partially resolved in 2024 in favour of Thailand on key liability questions but with ongoing settlement and recommencement discussions. The moratorium was lifted with new conditions in 2025, but operators face strict EIA and community-consent requirements.

In 2022, additional restrictions were applied to certain rare-earth and tin operations pending environmental and strategic assessment, and proposals to develop a Thai rare-earth supply chain remain under policy study by the Ministry of Industry and the National Minerals Management Policy Committee.

Common Mistakes

Avoid these traps:

• Trying to hold a mining licence through a foreign-controlled company. The licence will be rejected; structure via a Thai-majority entity.
• Skipping EHIA where required. Public-hearing failures are a primary ground of Administrative Court annulment of mining licences.
• Underestimating community opposition. Post-2017 procedural reforms give communities materially stronger consultation rights; engaging early is essential.
• Assuming BOI promotion covers raw mining. BOI typically promotes downstream processing, not extraction.
• Ignoring royalty audit risk. Reference-price disputes and grade assessments are frequent audit topics; maintain rigorous tonnage and assay records.

FAQs

1. Can a foreign-owned company prospect for minerals in Thailand?

Indirectly through a Thai-majority licensee, or as a service provider to a Thai licensee. Direct licence-holding by foreign-controlled entities is generally restricted under the FBA.

2. How long does an EIA approval take?

Typically 12-24 months for non-controversial projects; longer where public objections or judicial review arise. EHIA categories tend to be at the upper end.

3. Are the 2017 gold-mine restrictions still in force?

The Cabinet moratorium was lifted with new conditions in 2025, but practical re-entry requires fresh EIA/EHIA, community consent, and DPIM scrutiny.

4. What royalty rate applies to limestone for cement?Limestone royalties under current schedules are in the low single-digit percent range ad valorem against DPIM-published reference prices, with separate surface fees per rai. The exact rate depends on the relevant Ministerial Regulation in force.

5. Can BOI grant 100 % foreign ownership for a mineral-processing plant?

In appropriate cases, yes — particularly for refining and high-tech processing categories. Mining (extraction) itself remains FBA-restricted.

Related Reading

• Foreign Business Act 2025 Amendments
• BOI Tax Incentives: Section 31/32 and Category Tiers
• Administrative Court Thailand: Judicial Review
• What is the 49/51 Rule in Thailand?