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Logo of Phnom Penh Post newspaper Phnom Penh Post - Digging deep outside the law

Digging deep outside the law

Flat-nosed shovels scrape muddy rock from a mining cart into the bed of a Russian-built truck. Two Cambodian miners apply buckets of water to the shiny fragments of stone under the direction of a Chinese technician. Twenty metres away, men appear from a hole in the earth, the entrance to the China-Cambodia Company gold mine, which has reportedly operated for six years in the remote village of Prey Meas, Mondulkiri province.

The legal standing of mines such as this is shrouded in ambiguity, industry experts said, and contradictions concerning the name, origin and status of several of the country’s mines are rife.

Weak enforcement of mining laws excludes local communities from the decision-making process and smudges the revenue transparency, said George Boden, a campaigner at watchdog group Global Witness.

Documents accessible to the public show no record of the China-Cambodia Company. A Chinese manager at the company headquarters accepted an interview with the Post but declined to provide proof that the mine was licensed to extract gold.

When the back of the truck is full, three dust-caked miners mount the load. The engine turns over and the extractive spoils wind their way down gravel roads to a processing plant. A Chinese technician follows closely behind on a motorcycle.

Through a heavily guarded gate, a great mound of unprocessed stone sits beside a conveyer belt and other rusted machinery. In an unlit room on the premises – reportedly the China-Cambodia Company headquarters – a Chinese manager answered questions while sitting on a mosquito-netted bed.

The company employs 70 to 80 Chinese miners and more than 100 Cambodians, the manager said in his native Central China dialect. They extract gold from three mines, all within a few kilometres from the headquarters. It’s the only large-scale mine in Prey Meas, he said, although hundreds of Cambodian-run artisanal mines clear the jungle on the region’s low but abrupt hills.

The manager declined to give figures on the mine’s annual gold yields but said exploits have declined during the past year. Regarding questions of the company’s relationship with local and national authorities, the manager was silent, adding only that the operation has been fairly smooth since it broke ground.

“We work well with the locals. We don’t cause trouble … There haven’t been complaints [about our company],” he said.

A Chinese company called Zhongxin halted a five-year feasibility study at the Prey Meas mine last year, Kong Bisith, the Ministry of Industry, Mines and Energy’s Mondulkiri director, said. Rong Chheng Company - whose origin he could not confirm has taken over the operation and has been issued an extraction license, he added. The director denied that a firm called China-Cambodia Company was extracting gold on the site.

The Ministry of Industry, Mines and Energy has issued more than 120 exploration licenses to mining companies, yet few operations are authorized to begin mining, experts said. Long-term exploration and feasibility studies at remote mines are subject to suspicion among industry watchers.

“What we observed is that some mining companies kept extending their exploration licenses which seems to indicate they are doing more than exploration,” Mam Sambath, director of Extractive Industries Social Environmental Impact, said.

Mining contracts are made with the Ministry of Industry, Mines and Energy, not local governments, Mam Sambath said. These contacts often lack clarity and usually exclude provisions for local regulation. The result is frequent miscommunication between national and local officials, he said.

“Provincial governments often do not have any measurement or control to report back on a national level,” Mam Sambath said.

Yet simply accessing the information from the government and companies is the primary challenge for organizations that monitor the Kingdom’s mining activity, such as EISEI, he added.

Suy Sem, minister of the Ministry of Industry, Mines and Energy, and Sok Leng, the ministry’s Director General, were contacted but letters requesting information on the mine went unanswered.

Some 280 kilometres west of the China-Cambodia Company mines, Chinese miners are reportedly extracting gold and platinum in Chi Kraeng District, Siem Reap province.

Guards at the gate denied the Post access to the mine, but locals in the village of Khvav said it has been in operation since June. The name of the mine and its ownership were unknown in the village. Chinese employees from the mine are frequently spotted in the area, villagers reported, as are large trucks and luxury vehicles.

When asked about the mine, a village woman disappears up the ladder to her home. She returns with a thin plastic bag and reveals handfuls of golden-coloured stones. A boy on a bicycle two times his size pulls from his pocket a shiny stone that covers his palm.

These are compensation, the woman says, for damages done to their property. This is the only benefit villagers have reaped from the mining operation, yet crops on their land have been damaged, she said.

“The livelihood of the people will decrease automatically because the land and the water, as well as the forest produce, can be polluted,” Mam Sambath said of mines that elude government control.

Studies on environmental and social impact, as well as feasibility studies, should be conducted on at mining sites before licenses are issued, according to the Kingdom’s mining law.

Villages on the perimeter of mines, however, are rarely included in discussion concerning mining projects, Global Witness’ George Boden said.

“We have not seen social or environmental impact assessments and local communities have not tended to be consulted,” he said of many of the Kingdom’s mining concessions.

The government and companies don’t disclose the amount of money paid for access to resources and the resources themselves, Boden added, leaving a number of questions regarding the country’s potential mining income unanswered.

“Companies must also take their share of the blame for high-level corruption in Cambodia for failing to disclose the payments they make to the government,” he said.

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