Foreign gold firm in central Vietnam tries to evade debts to locals

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Quang Nam locals gather in front of the Phuoc Son gold company to demand money owed to them by the firm December 26. Photo courtesy of Tuoi Tre

A week after pledging to return long-owed debts, Canadia-Australia gold company has deducted all debt to a local contractor by saying a major protest by locals demanding their dues caused it $850,000 of losses.

Quang Nam Province's Phuoc Son Company, which is associated with Canadian gold producer Besra, issued a statement Saturday to clear its entire debt of more than VND17 billion (US$806,600) to its main contractor Quang An Company, Tuoi Tre newspaper reported.

The announcement came as a shock of the company's leaders, workers, sub-contractors and many locals who invested money in the central-highlands operation.

Phuoc Son owes Quang An and locals including small food vendors a totla of VND30 billion and the province authorities an additional VND190 billion in mining royalties.

Around 200 locals gathered in a demonstration front of the company to protest the lack of payment on December 26, blocking roads in and out of the facility.

The company announced it would shutdown operations that evening, but it reopened the day later while promising to clear all debts by the Lunar New Year, which this year falls January 31. It said it would pay VND1.5 billion to Quang An every month.

But now it said the blockage caused it huge losses.

The statement signed by its general director Paul Seton, who is one of three Canadian brothers that founded Besra, said Quang An had blocked the roads into the company and encouraged locals to do the same, which halted production at the mine.

The letter said the company would deduct the damage from its debt to Quang An, according to Vietnamese laws.

It criticized Quang An for not continuing "negotiating in a good will to have a feasible payment plan for both sides."

Do Ngoc Thang, a representative of Quang An, said the company was totally surprised by the statement.

Thang said the company had visited Phuoc Son five times before to demand the money but failed. "We will surely bring this to court," he said.

Le Thi Do, a hotel owner who invested more than VND4 billion in Quang An and is also owed VND420 million in room fees for Phuoc Son's engineers, said she and many other creditors were waiting for payment.


"If the company does not pay on time and even tries to evade it, we won't let it go."

Quang Nam authorities are scheduled to have a meeting on January 14 with leaders from Besra, which owns 80 percent of Phuoc Son.

Besra opened the first gold mine in Vietnam, Bong Mieu also in Quang Nam, in 1993, and Phuoc Son followed five years later.

Bong Mieu is temporary closed as the company said monsoons caused erosion in the area, citing this as one reason for its financial trouble alongside dropping gold prices.

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