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Mining in Laos

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Assessments of mineral reserves are imprecise, because by 1991 most of the country had not been geologically surveyed in a detailed manner. According to 1991 estimates, deposits of gemstones, gold, gypsum, iron, lead, potash, silver, tin, and zinc have relatively high commercial development potential, but mining activity is on an extremely small scale. In addition, Laos has small deposits of aluminum, antimony, chromium, coal, and manganese, as well as potential for oil and natural gas. In 1989 exploration agreements for oil and gas were signed with British, French, and United States companies.

Energy in Laos

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Mountainous terrain and heavy annual rainfall give Laos considerable hydroelectric potential. The Mekong River and its tributaries in Laos have an estimated hydroelectric potential of between 18,000 and 22,000 megawatts, or roughly half that of the river as a whole. The remaining potential belongs to Cambodia and other riparian countries. Total installed capacity in 1991 was 212 megawatts, the majority of it hydroelectric, or only about 1 percent of the potential.

Production of hydroelectricity, the country's major export until 1987, expanded slowly throughout the 1980s, from 930 thousand megawatt-hours in 1980 to about 1.1 million megawatt-hours in 1989, an increase of about 17 percent. The majority of electricity produced--approximately 75 to 80 percent, as of 1992--is exported to Thailand, which has an agreement to purchase all surplus electricity. The remainder is supplied to power networks for domestic consumption. Through 1986 the sale of electricity to Thailand was the country's most important source of foreign exchange. Despite increased production, in 1987 hydroelectricity yielded its place as the principal export to wood products, because of the drought, which lowered water levels, and a reduction in the unit price of electricity to Thailand. By 1991 a new agreement between Laos and Thailand had raised the unit price of electric power.

Manufacturing in Laos

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There is a paucity of any real industry in Laos outside of timber harvesting and electricity generation. Nonetheless, "manufacturing" represents about half of all industrial activity. Other manufacturing activities include the production of agricultural tools, animal feed, bricks, cigarettes, detergents, handicrafts, insecticides, matches, oxygen, plastics, rubber footwear, salt, soft drinks and beer, textiles and clothing, and veterinary products. Manufacturing employed only approximately 2 percent of the labor force in 1991. A few factories in the Vientiane area have been rehabilitated since the mid-1980s. As of 1994, the garment industry was "booming" with investment from China, France, Taiwan, and Thailand; there were more than forty garment factories in the Vientiane area.

Industry in Laos

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Laos has relatively little industry. This sector employed only 3.3 percent of the workforce in 1995. There is no heavy industry and much of the country's industry is comprised of smaller companies. In 1999, there were only 108 establishments in the whole country with more than 100 employees. However, there were 19,797 establishments with fewer than 9 employees. These small establishments are involved primarily in the production of textiles and handicrafts. Laos is well known for the high quality of its aesthetically attractive textiles. Even though industry plays a small role in the Lao economy, its importance has increased significantly. In 1987, industry represented only 11 percent of the GDP of the Lao PDR, while in 1999, it represented 22 percent, doubling since the introduction of the New Economic Mechanism policy.

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