Singapore Bullion Market Association

Article List

Article List

LAOS’ GOLD RUSH: A GOLDEN OPPORTUNITY FOR ECONOMIC GROWTH

By PTL Holding Company Limited

Singapore Bullion Market Association Crucible30-SBMA-Laos-Gold-Market
Laos, a country with rich cultural heritage and abundant natural resources, has witnessed significant growth in its gold mining sector over the last couple decades. This growth not only contributes to the national economy but also positions Laos as an emerging player in the global precious metals market. The gold mining industry in Laos is reaching a significant milestone, with increasing investments, exploration, and mining activities.

BACKGROUND OF LAOS’ GOLD MARKET

Gold holds a significant place in the economic security and cultural fabric of Laotian society. As a stable store of value, it provides a reliable investment avenue amidst fluctuations in the national currency, the Laotian kip. Unlike the kip, gold offers a hedge against inflation, maintaining its value over time. Many Lao families regard gold as a form of savings and security. By keeping gold at home, they ensure a readily accessible asset that can be sold for cash when needed, offering a safety net during economic hardships.
Beyond its role as a financial asset, gold carries deep cultural significance in Laos. It holds a prominent place in traditional marriage customs, often forming a part of the bride price or dowry. This symbolic gesture represents prosperity and abundance for newlywed couples, underlining the importance of gold in familial relationships and social bonds. Additionally, gold jewellery is prominently worn during festivals and other special occasions, functioning as a tangible display of wealth, status, and cultural identity.
Singapore Bullion Market Association Crucible30-SBMA-Laos-Gold-Market
Gold Jewellery in Laos

CURRENT STATE OF THE GOLD MINING INDUSTRY IN LAOS

Laos has witnessed a surge in its gold industry, driven by factors such as digitalisation and the increasing use of online platforms for buying and selling certified gold. This shift towards digital platforms not only attracts the younger generation of investors, but also facilitates access to gold for geographically dispersed Lao communities, enhancing market transparency and participation.
In 2022, Laos emerged as a significant player in the global gold market, exporting a total of $852 million worth of gold, ranking it as the 61st largest exporter globally.
Gold stood out as the second most exported product from Laos during this period. Major destinations for Laos’ gold exports included Australia, Thailand, Switzerland, Hong Kong, and India, indicating a diversified export market for Laotian gold. Moreover, between 2021 and 2022, Laos witnessed rapid growth in its gold exports to emerging markets such as Singapore, Canada, and South Korea, reflecting increasing global demand for Laotian gold.
However, despite its robust export performance, Laos also imported $332 million worth of gold in 2022, ranking it 39th globally in terms of gold imports. Thailand emerged as the primary source, accounting for the majority of imported gold, followed by the United States. This import trend underscores the multifaceted nature of Laos’ gold market, with a significant portion of domestically produced gold being exported while simultaneously importing gold from other countries.

Gold Mine Production (Tonnes) - Laos

SBMA Gold Mine Production (Tonnes) - Laos
Source: Metals Focus; World Gold Council

IMPACT ON LAOS’ ECONOMY

Laos’ growing production and demand for gold can have mixed effects on its economy. On the one hand, it boosts export revenues, particularly if it maintains its status as a net exporter to countries like Thailand, which could strengthen the kip and attract more investment to the mining sector, leading to job creation. Additionally, gold’s reputation as a safe haven could attract local investment, providing economic stability in uncertain times. Conversely, an overreliance on gold can have negative repercussions, such as higher costs for imported finished gold products and inflation. This focus on gold mining could also divert attention and resources away from other vital industries.
In Laos, gold jewellery is a favoured investment for wealth preservation, especially during inflationary periods, and experiences a surge in demand during festive seasons. However, consumer investment decisions are influenced by international gold prices, geopolitical events, and macroeconomic factors, which can affect domestic market sentiment.
While the increase in gold production holds promise for economic and infrastructural development due to the nation’s dependence on natural resources, it also brings about environmental challenges like biodiversity loss and water pollution. The social implications of expanded mining activities require diligent community engagement and adherence to health and safety protocols. It is therefore imperative for mining operations in Laos to comply with international environmental, social, and governance (ESG) standards, maintain transparency, and receive proper oversight from the government to ensure sustainable and equitable growth.

SOCIAL IMPACTS

As Laos escalates its gold production, achieving alignment with global climate goals becomes crucial. The international gold sector is targeting a 2 °C climate threshold by 2030, a goal that Laos is actively pursuing. Investors are now prioritising eco-friendly mining practices, making sustainability a cornerstone for securing investments and project financing.
The challenge for Laos lies in maintaining economic momentum through gold mining while transitioning to green practices. Success in this endeavour is critical for the country’s ability to compete globally and attract future investment. In essence, Laos stands at a crossroads where economic ambition must meet environmental responsibility, proving that the two can progress together for a sustainable future.
Singapore Bullion Market Association Crucible30-SBMA-Laos-Gold-Market

ABOUT PTL HOLDING COMPANY

PTL Holding Company Limited is a diversified Lao holding company investing in Consumer Goods, Trading, Energy, Property & Asset Management, and IT Innovation. Founded in 2011, PTL fosters growth through its subsidiaries like PetroTrade, PlusCard, Black Canyon, Jungle, Molly Care, Sitthi Inter Trading, Sitthi Logistics, CS Lighting Electronics, Boualapha Power, Vientiane Logistic Park, Thanaleng Dry Port, Khouanchay Company and more.
PTL Holding business group is growing at a fast pace and is seeking talented individuals to join our expanding team. The company is committed to both business success and contributing to Laos’ full socio- economic potential.
Pawan Nawawattanasub is the CEO of YLG Bullion Singapore and the CEO and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association and is a SBMA Committee member.