Compensation for Exploitation of Mineral Resources Under the Mineral Act, B.E. 2560

Abstract

Mineral resources are considered non-restorable resources consumed without restoration. The government must prescribe rules for various actions for the benefit of managing the mineral resources that can be utilized in the most cost-effective manner. The mining business operators or related businesses are required to obtain permission from the government to acquire the right to operate in any manner in the exploitation of mineral resources under the supervision of government agencies. This means that the mineral belongs to the government. Therefore, the government has the power to collect compensation for the exploitation of mineral resources. When those who have the right to exploit mineral resources are also obligated to pay compensation or severance pay for the loss of mineral resources as well. The Compensation for the exploitation of mineral resources that the government has the authority to collect as specified in the Minerals Act B.E. 2560 is Mineral Royalties and Special Subscription.
From the study on the compensation for the utilization of mineral resources according to the Mineral Act B.E. 2560, in terms of promoting and developing the mining industry along with improving the quality of life of the people and the environment sustainably, the study found that Thailand collected mineral royalties according to the value of minerals. This was the collection of government revenue proportional to the value of the mineral sold without allowing the mineral producer to deduct the cost of producing the mineral. As a result, the mineral royalty collection system does not promote investment compared to other countries. Also, the Department of Primary Industries and Mines which has the authority and duty to supervise mining operations has set guidelines that are inconsistent with the intent of the Mineral Law in 2 cases which are in the case of exporting minerals outside the Kingdom or the continental shelf requiring a person who purchases the mineral must pay the mineral royalties, and in the case of a person who possesses the mineral under section 63 paragraph one of Mineral Act B.E. 2560, determined not to pay a special subscription. The fact that the provisions of such guidelines do not comply with the intent of the law results in the collection of such revenues inefficient and the government loses the revenues that should have been received in some cases. In addition, there were problems with the allocation of mineral royalties to Local Administrative Organizations in an inappropriate proportion to the impacts received from mining and related operations. causing local administrative organizations in some areas to receive insufficient budgets for environmental management and solving the impacts. This case is one of the causes of conflict between the mining project owners and the people living in the area or near the area where the mining project is located.
Considering finding the solution to the above process, the author suggests amending the laws related to the collection and allocation the compensation for the exploitation of mineral resources. The author also suggests amending the related mining law by assigning measures to promote the investment of mineral businesses operation which are friendly to the environment, assigning to collect the mineral royalties considering the cost of mineral production, and assigning the rate of mineral royalties by the nature of mineral usage that the government wants to support the development of production technology for the cost-effective of using minerals as well as adopting the guidelines that the Department of Primary Industries and Mines to adhere in accordance with the Law of Minerals by taking into account the intention of the law to make the collection of compensation for the exploitation of the use of mineral resources more efficient. In addition, it is deemed appropriate to amend the law of Planning and Procedures for Decentralization to Local Administrative Organizations by specifying the proportion of mineral royalties allocated to Local Administrative Organizations to be suitable for the impact received from mining and related mineral business operations along with making an agreement on sharing the benefits from mineral business operations. This agreement will be made between the holder of a concession certificate and the Local Administrative Organizations where the mining area is located. Such agreements should have the main point that is related to various benefits for people and communities in the area. Considering the real needs of the people in the area is important. This action will reduce the conflicts between the mining project owners and people living in the area where the mining project is located and the nearby areas. This will lead to the development of the mining industry along with improving the quality of life of the people and the environment sustainably.