20/11/2007 - 22:00

Rox confident of Lao business link

20/11/2007 - 22:00

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Developing a minerals project in Laos has been fairly straightforward for Subiaco-based exploration company, Rox Resources Ltd, despite a recent hurdle in the form of a Laotian government moratorium on foreign investment licences.

Developing a minerals project in Laos has been fairly straightforward for Subiaco-based exploration company, Rox Resources Ltd, despite a recent hurdle in the form of a Laotian government moratorium on foreign investment licences.

Rox, which has a 60 per cent interest in the Lao-based Pha Luang lead-zinc project, is currently awaiting the outcome of a moratorium introduced at the beginning of 2007, which suspended the granting of foreign investment licences.

Rox’s managing director, Ian Mulholland, said he believed the moratorium would be lifted at the end of the year, despite no official statement having been issued by the government.

However, it has not prevented Rox from continuing with its operations, and the company remains hopeful that the outcome will be positive.

“We believe that because our project is not a new tenement, we may be granted a foreign investment licence,” Mr Mulholland said.

The Lao government is also currently reviewing its mining legislation, as well as examining compliance on a number of existing mining licences.

While it is legal for foreign mining companies to operate in Laos without local partners, Rox decided to establish a joint venture, in order to give the company access to an existing tenement.

“We could have gone in to look for a project ourselves, but we figure that because of the cultural differences, the political differences and the language differences, having a local partner can be useful and valuable,” Mr Mulholland said.

“Our intention was that having a local partner would help government relations, and it has.”

Rox has had an expatriate manager based in Laos since it acquired its project about two years ago, and also recently employed local business advisers in order to provide more independence.

“We want to be less reliant on our joint-venture partner and more able to take care of ourselves,” Mr Mulholland said.

He said the business advisers were often individuals who had spent time in the US and were familiar with Western business practices.

Besides a manager and senior geologist, all Rox’s staff in Laos are locals, including technical officers and a field manager.

Mr Mulholland said that, aside from a few legislative issues, business had been fairly smooth for the company.

“There’s the odd technical issue and from time to time, the odd potential bandit, but that happens all over Laos and affects other companies,” he said.

Most major functions related to exploration – including drilling, assay analysis and earth moving – are undertaken for Rox by Australian-owned contractors, ensuring the desired standards are achieved.

Mineral exploration activity in Laos began about 15 years ago, although foreign investors have only been active there since the beginning of the decade.

The country is a member of Asean and is currently going through the process of joining the World Trade Organisation.

Australia, which has a full embassy in Laos, is the country with which Laos has had the longest running uninterrupted diplomatic relationship.

Rox is still in the exploration phase and plans to commence mining in the next three or four years.

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