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Business Times
21 hours ago
- Business
- Business Times
Gold-rich Laos hits mother lode with S-E Asia's first bullion bank amid inflation, currency blues
[VIENTIANE] In the heart of a resource-rich continent famed for metals and gems, one of South-east Asia's smallest economies quietly launched the region's first dedicated gold bank – a bold bid to draw tonnes of the precious yellow metal back into the formal financial system. With protracted double-digit inflation (though gradually easing), hefty debt levels, and renewed kip depreciation plaguing the landlocked nation, Laos is betting big on the safe-haven asset. It is a well-timed gambit, seeing how gold prices hit multiple fresh highs through 2024 before peaking in April 2025 to breach US$3,500 per ounce. This year, the metal has gained some 28 per cent so far. In an interview with The Business Times, Lao Bullion Bank chief executive Chanthone Sitthixay said: 'There are so many commercial banks in Laos and the limitation is that the local currency, the kip, cannot be transacted at the international level. But gold can.' And so he pitched the creation of a local gold ecosystem in 2020 to former Lao prime minister and current President Thongloun Sisoulith, before the bank's eventual launch in December 2024. Dr Chanthone Sitthixay, the CEO of Lao Bullion Bank, pitched the idea of creating a local gold ecosystem to the government back in 2020. PHOTO: LAO BULLION BANK Research suggests that the country still holds more than 1,000 tonnes of gold underground – worth an estimated US$100 billion, said Dr Chanthone. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Meanwhile, private households currently hold some US$10 billion worth of the precious metal, he added, noting that responsibility falls on the Lao Bullion Bank to coax the wealth back into the formal financial system. Six-month track record As at the first half of 2025, Lao Bullion Bank amassed between 500 kg and 600 kg of gold from private households. Once its refinery – which has a capacity of up to 150 tonnes a year – is completed in end-June, the bank anticipates onboarding gold miners as a new customer segment, noted the CEO. Dr Chanthone expects mining contributions to then make up some 30 per cent of the bank's assets – with households still accounting for the bulk. The target, however, is to scale up refinery services so that gold from miners eventually accounts for 70 per cent of the bank's assets, added the 49-year-old business tycoon. To achieve this, Lao Bullion Bank is eyeing a timeline of around one year, following a government directive requiring all miners to refine their gold to a purity of more than 99 per cent before it can be exported, he said. Miners in the country traditionally exported only the raw metal to foreign markets because of the absence of a comprehensive gold ecosystem that encompasses mining, refining, trading and investment. In the six months since its opening, the bank has opened more than 2,000 accounts and is seeing an increase of about 10 new ones each day. 'We haven't really been bombarding people with promotional campaigns and such,' explained Dr Chanthone. 'We are trying to make sure that the systems and infrastructure are in place.' On customer demographics, the CEO shared that the bank serves both locals and foreigners, including expatriates who work in the country. Interestingly, the bank has observed a higher number of younger clients, driven by growing interest in investing, but whose deposit volumes remain modest. Conversely, it has fewer clients who are older, but they contribute more, he said. Blueprint for growth Within the next three years, the bullion bank intends to expand into four other major Lao provinces: Luang Prabang, Oudomxay, Savannakhet and Champasak, said Dr Chanthone. It currently operates out of a five-storey building in the capital, Vientiane. Bank counters and tellers occupy the ground floor, while the second floor houses a laboratory for testing modest amounts of gold. The third floor holds the information technology and trading rooms, while the upper levels are reserved for office and meeting spaces. Like a traditional commercial bank, it offers deposit, withdrawal and transfer services. What is unique, however, is that the Lao Bullion Bank issues certificates to clients who deposit their gold, and these documents can be used as collateral by customers seeking loans from commercial banks and financial institutions in Laos, said Dr Chanthone. He explained: 'We have 37 banks in Laos and the total deposit amount at these commercial banks is 110 per cent of our gross domestic product (GDP). For gold, we estimate it to be about 100 per cent of GDP.' These deposits combined will make up more than 200 per cent of Laos' GDP, which would demonstrate the country's strong liquidity, he said. 'If customers only deposit gold with the bank, it will not be liquid,' continued Dr Chanthone. 'But once the certificate is issued, they can get financing from other banks, which creates liquidity.' Another novel offering of the bank is its automated vending machines that operate just like conventional ATMs, except that these dispense gold. The machines now offer four types of gold bars – weighing 1 g, 7.5 g, 15 g or 30 g – that come in either a standard design or limited designs of national landmarks That Luang and Patuxay. Two of the 10 machines the bank has are currently placed within the building, while the remaining eight will be installed in hotels, markets and other public places once safe, populated locations have been identified, said the CEO. Two of Lao Bullion Bank's 10 gold vending machines are housed on the ground floor of its building. PHOTO: LAO BULLION BANK Dr Chanthone noted that the primary target audience for these gold vending machines are tourists. He hopes that tourists will come to associate Laos with its gold – the same way Myanmar is known for its jade, Thailand for its rubies, and Sri Lanka for its sapphires. A screen capture of the Lao Bullion Bank's website on Jun 26. The bank sells four different types of gold bars – weighing 1 g, 7.5 g, 15 g or 30 g – that come in either a standard design or limited designs of national landmarks That Luang and Patuxay. SCREENSHOT: LAO BULLION BANK WEBSITE Other initiatives in the pipeline include gold-trading services on international platforms, with the bank's trade team poised to officially begin operating in August. Golden ticket to fiscal stability Set up as a public-private partnership, Lao Bullion Bank is 25 per cent owned by the government, with the remaining 75 per cent share belonging to primarily family-owned investment holding company PTL Holding. The initial capital of US$60 million injected into the bank was accumulated from the various family businesses, said Dr Chanthone, who holds a master's degree and PhD in strategic business management. On whether the move was part of a wider de-dollarisation narrative exacerbated by the US' tariff volatility, the CEO demurred. 'The main objective is to focus on strengthening the local currency by (transitioning it) from non-convertible to convertible; and the country has gold, which can be considered near-cash.' As the third-largest gold producer among Asean member states, Laos aims to become an Asian trading hub for the yellow metal by 2030. The way Lao Bullion Bank supports the nation's goals, said Dr Chanthone, is 'by bringing gold that's out of the system back into the system, making it more liquid… and reducing the supply of M2 in the economy'. M2 is a broad measure of money supply, used by economists as an indicator of potential inflation. Global appetite for gold continues to hold firm, with demand hitting its highest first-quarter level since 2016, according to an Apr 30 report by the World Gold Council on Q1 2025 gold demand trends. Quoting the council's head of Asia-Pacific (ex-China) and global head of central banks Fan Shaokai, the release wrote: 'With the full impact of tariff measures still unfolding, investors continue to turn to gold, recognising its role as a portfolio diversifier that has historically performed well during periods of uncertainty.' Neighbouring Indonesia also opened its first two state-owned bullion banks on Feb 26, some two months after the Lao Bullion Bank's launch. Asked whether there exist opportunities for collaboration with South-east Asia's largest gold producer, Dr Chanthone concurred, noting that the bank has 'really good connections' with the Indonesian government. The bank is a foreign associate member of the Singapore Bullion Market Association. On his hopes for the bank and the country, the magnate concluded: 'The problems of Lao people must be solved by a Lao. I don't just do business; I want to do something that is impactful for the country.' He added: 'We do our best to make the country prosperous.'
The Star
26-05-2025
- Business
- The Star
Laos and Malaysia establish strategic rail-sea trade link
VIENTIANE (Vientiane Times/ANN): Laos and Malaysia have established a strategic partnership to boost cross-border trade via a rail-sea route, with the exchange of a Memorandum of Cooperation between Penang Port Sdn Bhd (PPSB) and Thanaleng Dry Port (TDP) in Malaysia on Sunday. The document was exchanged between MMC Port Holdings Sdn Bhd Chief Executive Officer Datuk Azman Shah Mohd Yusof and PTL Holding Co., Ltd. (PTLH) Chairman and Founder, Dr Chanthone Sitthixay, witnessed by Prime Minister Sonexay Siphandone and his Malaysian counterpart Datuk Seri Anwar Ibrahim, Bernama reported on the day. The Lao Prime Minister is in Malaysia on an official visit that includes attending the 46th Summit of the Association of South-East Asian Nations (Asean) and related meetings, scheduled to take place on May 26-27, at the invitation of PM Anwar. The partnership between the two companies is part of the broader effort to bolster economic ties between the two Asean members and the rest of the region. PPSB is a subsidiary of MMC Port, while PTLH is the parent company of Vientiane Logistics Park Co., Ltd., which manages the Thanaleng Dry Port - Laos' integrated logistics centre and the single window customs clearance point on the Laos-China Railway. The partnership is part of a broader initiative under the regional Pan-Asia Railway Network, integrating the China-Laos Railway to create a strategic trade route linking southern China through Laos and Thailand, to Malaysia's west coast. Thanaleng Dry Port managing director Sakhone Philangam told Bernama that the collaboration marked a significant milestone in transforming Laos into a key logistics player, building on its landlocked status. He expected that the partnership would benefit Laos economically, as the country's small-scale economy needs to rely on higher trade volumes through cooperation with regional players like Malaysia and China. 'In logistics, you need agglomeration and massification. We don't have that volume, so this partnership will enable us to tap into a larger logistics network,' he was quoted as saying. The collaboration will involve the sharing of operational knowledge, joint marketing efforts, system integration, simplification of documentation processes, harmonisation of infrastructure, and short-term personnel exchanges. MMC Port is a holding company that operates five ports across Peninsular Malaysia, namely the PPSB, Port of Tanjung Pelepas, Johor Port Bhd, Northport (Malaysia) Bhd, and Tanjung Bruas Port Sdn Bhd, making it Malaysia's largest port operator. Meanwhile, PTLH is a major Lao conglomerate that operates a wide range of businesses including logistics, finance, railway, industrial and investment zones, and gold (Bullion Bank). Azman Shah said the initiative, which is aligned with efforts to enhance ASEAN connectivity, will reduce transit times and logistics costs, improve supply chain efficiency, and boost regional economic growth. 'We are pleased to contribute to Thanaleng Dry Port's efforts to realise Laos' national strategy to transform from a land-locked country to a land-linked nation,' the CEO was quoted as saying. This is the second partnership that the Thanaleng Dry Port has secured with a Malaysian company. Earlier, it signed an agreement with Mutiara Perlis Sdn Bhd to facilitate inland port services, leveraging the existing multimodal integration including the rail network of which the TDP is a vital part. Containing the standard-gauge Laos-China Railway and the one-metre gauge Laos-Thailand rail track that run side by side to enable seamless connection, Thanaleng Dry Port has facilitated rail freight expresses linking Malaysia to several Chinese cities, bolstering cross-border trade. In 2024, total bilateral trade between Laos and Malaysia exceeded US$43 million, up from just US$30 million in 2023, according to the Lao Ministry of Foreign Affairs. Malaysia is Laos' fourth-largest foreign investor, with total investments amounting to US$946 million across 88 projects, in sectors including renewable energy, transport, telecommunications, construction, banking and hospitality. - Vientiane Times/Asia News Network
The Star
10-05-2025
- Business
- The Star
Laos sets sights on becoming Asia's gold trading powerhouse
VIENTIANE (Laotian Times): Laos has set a big goal: to become the main centre for buying, selling, and processing gold in Asia within the next five years. At a high-profile meeting on 02 May, the Lao Bullion Bank (LBB) presented its ambitious strategy to position the country as a regional leader in precious metals. At the gathering, Chanthone Sitthixay, Chief Executive Officer of LBB, outlined the bank's vision to establish economic and financial stability by transforming Laos into a gold trading hub and a frontrunner in precious metal refining across Asia by 2030. Laos stands as one of South-East Asia's most gold-rich nations, currently ranking third in gold production among Asean countries and sixth across Asia. Initial surveys have revealed an extraordinary potential, between 500 to 1,000 metric tons of untapped gold reserves scattered throughout the country. Once confirmed and certified by international geological and mining standards, these reserves could translate into national gold stockpiles valued at an estimated US$50 to US$76 billion. This would provide Laos with a substantial strategic reserve, boosting the country's financial security and capacity for economic growth. Since its launch in December 2024, Lao Bullion Bank has advanced its mission by supporting sustainable economic development through gold-based financial services, including gold deposit accounts, gold-backed loans, and gold deposit certificates that can be used as collateral. - Laotian Times
Arabian Post
08-05-2025
- Business
- Arabian Post
Laos Charts Bold Course to Lead Asia's Gold Trade
Laos has unveiled an ambitious plan to transform itself into a central hub for gold trading and refining in Asia by 2030, spearheaded by the Lao Bullion Bank . This initiative aims to bolster the nation's financial stability and elevate its standing in the global precious metals market. At a strategic meeting held on 2 May, LBB's Chief Executive Officer, Chanthone Sitthixay, detailed the bank's vision to establish Laos as a leader in the precious metals sector. The plan encompasses the development of comprehensive gold trading platforms, refining capabilities, and secure storage solutions, aligning with international standards to attract both regional and global investors. The Lao Bullion Bank, officially launched in December 2024, represents a significant step in the country's economic strategy. The bank's establishment is a collaborative effort between the Lao government and PTL Holding, with the government holding a 25% stake and PTL Holding owning the remaining 75%. This partnership underscores a commitment to enhancing the nation's gold reserves and stabilising the local currency, the Kip. Since its inception, LBB has introduced various services, including gold deposit accounts, loans backed by gold collateral, and gold vending machines. These offerings aim to integrate gold more deeply into the financial system, providing citizens with alternative investment options and contributing to economic resilience. To strengthen its position in the regional market, LBB has entered into strategic partnerships with key industry players. In October 2024, the bank signed a Memorandum of Understanding with the Singapore Bullion Market Association , focusing on knowledge exchange and regulatory collaboration to enhance Laos's bullion market infrastructure. Additionally, a partnership with StoneX APAC was established to leverage technological expertise and develop new financial products tailored to the precious metals sector. In March 2025, LBB further expanded its network by partnering with Samlane Jewelry, a prominent local gold retailer. This collaboration aims to standardise gold trading practices within the country and facilitate smoother transactions for investors and consumers. As part of this initiative, a promotional campaign was launched, offering incentives to customers who deposit gold with the bank, thereby encouraging public participation in the formal gold market. The bank's efforts are also directed towards refining unmined gold ores, transforming them into valuable assets that can contribute to the national budget and reserves. By doing so, Laos seeks to maximise the value derived from its natural resources, ensuring sustainable economic growth and financial independence. LBB's establishment and its subsequent initiatives reflect a broader governmental strategy to integrate Laos more fully into the global financial system. By positioning itself as a central player in the precious metals market, Laos aims to attract foreign investment, enhance its economic stability, and offer its citizens diversified financial services.
