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Logo of Phnom Penh Post newspaper Phnom Penh Post - Sok An says search for bauxite in Mondulkiri could be worth billions

Sok An says search for bauxite in Mondulkiri could be worth billions

Although the Royal Government ministers have for months now been deliberately downplaying

Chevron's exploratory drilling for oil and gas in Block A offshore from Sihanoukville,

not so with the search for bauxite and gold in Mondulkiri underway by two Australian

companies.

Bauxite under the ground in Mondulkiri where exploratory drilling began a few months

ago could result in an investment worth "billions of U.S. dollars," Deputy

Prime Minister Sok An announced to 600 business people attending a two-day investment

conference November 9.

Prime Minister Hun Sen told the investment conference that he also had high hopes

for BHP Billiton efforts. "Cambodia has significant potential in iron, bauxite,

precious stones, gold," he said. But regarding oil, he said, "much of the

speculation is premature."

Australian mining giant BHP Billiton over the summer began what it expects to be

five years of exploratory drilling for bauxite in Mondulkiri. The company has a concession

signed a year ago by Sok An to explore 1,000 square kilometers, some still dotted

with unexploded ordinance and land mines from 40 years ago. Billiton said it is using

land mine clearance teams in the risky areas.

Bauxite ore is the unrefined component of aluminum. Billiton hopes to find enough

of it in recoverable quantities to build an alumina refinery in Mondulkiri, according

to company officials.

No details of the license agreement reached with the government have been disclosed,

and no studies have yet been done estimating what kind of revenues bauxite mining

would produce for the government of Cambodia.

Billiton officials told the Post the deal was proprietary but that a bauxite mine

involves a "very large investment" and that if the exploratory drilling

is successful, Billiton would be the operator.

Meanwhile, Australia's Oxiana Ltd., has also been quietly exploring for gold and

copper in Mondulkiri. Oxiana is operating the Sepon gold and copper mines across

the border in Laos.

"There is potential in Cambodia for minerals. We have been exploring one year.

We have nothing to announce. We are investing in exploration," said Oxiana's

Graham Moir.

He said Oxiana hopes to find a mine along the lines of its Sepon gold and copper

mines. "We want very much to find one."

Oxiana is also exploring in Thailand and has identified prospects near the Chatree

gold mine in north central Thailand where it has a joint exploration and generative

partnership where Oxiana can elect to earn up to 75% by sole funding if it decides

to mine. Other smaller gold mining companies have been also been licensed to explore

but no major discoveries have been found.

With the price of commodities at record levels on global markets, mining companies

are anxious to explore new areas that may have previously viewed as not commercially

viable. Mondulkiri, where the landmines are, could fall into that category.

Gold for example is trading at $835 an ounce on the world market, up from $635 a

year ago.

The bauxite is located in some areas inhabited by Mondulkiri's hill tribes. Billiton

said in its statement that during the exploration period, the indigenous peoples

would be kept informed. Some of the concessions also border on areas with endangered

wildlife.

A company statement explained that the exploration teams in Mondulkiri will drill

vertical holes in the ground 200m to 800m apart during the early exploration.

"Each drill hole will be approximately 12 centimeters in diameter and after

the sample has been removed, the hole will be refilled straight away and replanted.

It is planned that a small number of pits, each two to three meters square, will

also be dug to remove a quantity of soil and bauxite for detailed analysis,"

the statement said.

"These pits will be protected while they are open and then filled in and replanted

before the team leaves the location to prevent injury to people or animals afterwards."

Generally the teams expect to drill in each area for a few hours and clean up the

area after a couple of days, but the land mines could drag the process out longer,

the company said.

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