An index measuring countries on their attractiveness for mining investment has included Cambodia in its results for the first time, with the Kingdom ranking a relatively low 81 out of 122 due to a lack of obvious sites to exploit.
The “attractiveness index”, conducted by the Canada-based Fraser Institute, is based on two core metrics: the prospect of finding actual valuable materials in the ground, known as “prospectivity,” and the regulatory environment in which mining companies would operate.
Cambodia, a newcomer to the mining scene, was placed in the middle of the pack within the Asian countries surveyed, ranking slightly higher than Thailand and Vietnam but lower than Laos and Myanmar.
A bright spot for Cambodia was its ranking on the policy side, where it placed 62, the highest of the 10 Asian countries surveyed, other than Thailand. But for the actual likelihood of finding and extracting minerals, Cambodia came at 104th, second-worst in Asia.
Justin Tremain, managing director of Renaissance Minerals in Australia, said the contrast was due to the relatively short history of exploration in Cambodia, where there is still no single large-scale mining operation in the entire country.
Because exploration started in 2007 and can take up to 12 years, Tremain said it remains unclear at the moment whether Cambodia has mineral resources ripe for large-scale extraction, something the government makes up for by making the field more open to private investment.
“The policy has to be favourable because the prospectivity is unproven – it’s higher-risk,” Tremain said.
“The only way to tell [the prospectivity] of a country is to continue exploration,” he said. “Only time will tell.”
In an example of the government’s more open approach to mining, the Ministry of Mines and Energy started a program last December to improve governance of the mining sector, said Meng Saktheara, secretary of state at the ministry.
Saktheara said the program tackles illegal mining while gathering data on mining operations across the country.
“Starting from 2018, we will have large international-scale mining in Cambodia, so we need to integrate and improve the economy.”
Areas of the survey in which the Kingdom fared particularly poorly included the quality and availability of mapping information – where Cambodia was one of the top ten worst areas surveyed – along with perennial issues like infrastructure and skilled labour.
John-Paul Dau, vice president of operations at Angkor Gold, said that while his firm’s project sites are hooked up to water and power grids, the lack of railway connection in Cambodia is an obstacle to transporting “higher volume, lower value commodities”, while accurate geographical information is sometimes nonexistent.
“For an early starter in exploration, the available historical information is not there, it’s not researched across the country,” Dau said.
He added, however, that Cambodia’s geography has positive potential because there has been no large-scale mining to date, unlike in places like Canada or Australia or even more “mineralised” neighbours such as Laos.
“Prospectivity in Cambodia is very high because there’s a lot of low-hanging fruit,” he said. “In Cambodia you’re basically a pioneer.”