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Thailand's biggest gold mine told to address contamination fears

[BANGKOK] Thailand's largest gold mine needs to prove it is not the source of arsenic and manganese contamination in nearby villages, the head of the country's forensic science institute said on Friday, adding the mine must cooperate with the government.

The Australian-run mine, located 280 km (174 miles) north of Bangkok in central Phichit province, was ordered to stop operations this week.

Output has been suspended for up to 30 days while inquiries are conducted and the suspension could be extended if the miner fails to come up with evidence within that time.

The Chatree mine, Thailand's first and largest gold mine, began operations in 2001. It is operated by Akara Resources Public Company, a subsidiary of Sydney-based Kingsgate Consolidated Ltd.

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"My team tested the blood of 700 villagers and more than 300 people out of 700 tested positive for arsenic and manganese, including children," said Pornthip Rojanasunand, director-general of the Central Institute of Forensic Science, part of the military government's investigation team.

"We're still not certain that contamination comes from the mine," she told Reuters.

Kingsgate Chairman Ross Smyth-Kirk said the company was not responsible for any arsenic or manganese present in the area.

"We don't use or store these at the mine," he told Reuters, adding the company had commissioned an independent toxicology study to be carried out with Thailand's Mahidol University.

Ms Pornthip said the government was looking for cooperation from the firm. "If they don't think they are responsible, they should prove it," she said.

Kingsgate's latest production report indicates the Chatree mine produced around 11,000 ounces of gold per month. "We don't want to shut down, but we can get through this," Mr Smyth-Kirk said, adding that suspension of mining jeopardised some of the 1,100 jobs at the mine and the livelihood of villagers who rely on the Chatree operation for business.

Kingsgate has requested its shares be suspended from trading on the Australian Securities Exchange after the temporary cessation order issued by the Thai authorities.

The halt in trading comes amid a resurgence in Australian gold stocks on the back of lower oil prices, which have reduced mining costs dramatically.

Kingsgate stock last traded at its highest price since early September, A$0.79, before being suspended.