Mining revenue has increased as commodity prices have risen in global markets. According to the planning and investment ministry, mining earned Laos around K6.9trn in the first six months of 2010/11, representing a year-on-year rise of 58%. Copper, which accounted for 28% of total exports in value terms in the period, is now selling for about US$8,000-9,000/tonne, compared to US$3,500/tonne in early 2009.

In April 2011 a local firm, Lan Xang Minerals, paid the government more than US$92m in profit taxes from its Sepon mine in 2010. Other sources of state income generated by the mine in 2010 included royalties from gold and copper sales worth US$26.5m, income-tax payments of US$5m and a dividend payment of almost US$33m. The company is the biggest single taxpayer in the country. An Australian firm, Aurum Resources, is investing about US$6.5m in the gold-exploration activities of another Australian company, Argonaut, in central Laos. In March Aurum agreed to take a majority interest in Argonaut's exploration rights to an area of 226 sq km in Vientiane province. Argonaut suspended its explorations in the area in mid-2009 owing to the global financial crisis.

Two other Australian mining firms, Atomic Resources and Indochina Coal, formed a joint-venture agreement in March to explore and develop potential coal fields in Laos. Indochina will search for coal in two prospective tenement areas and sell the exploitation rights to Atomic for a lump sum and a gross royalty of 2% on coal sales for the duration of the project. Laos is thought to have reserves of low-grade coal, the sale of which would depend on the future development of transport or power-plant infrastructure.

The major partners in a potential bauxite mining project in southern Laos, Ord River Resources (ORD) of Australia and China's Non-Ferrous Metal Industry (NFC) are considering floating the project on the Australian stock exchange. The two companies hope to raise A$180m-200m (US$175m-198m) through an initial public offering for their shares in Sino Australian Resources (SARCO) at the end of 2011 or in early 2012. The funds raised from the flotation will be used to finance the construction of an alumina refinery in Laos with a minimum capacity of 600,000 tonnes per year. ORD and NFC own 49% and 51% of SARCO respectively and would continue to hold substantial equity in the venture after the offering. The bauxite project remains dependent on a series of future hydroelectricity projects to power the refinery, but progress is gradually being made on this front.