Indian mining firm Mesco Gold will begin mining a gold field in Cambodia’s northeastern Ratanikkiri province by early 2016, according to a company statement released yesterday.
If it begins extracting successfully, Mesco Gold, which is owned by the Indian company Mesco Steel, would effectively become Cambodia’s first operational mine.
“This will be a great project for Mesco, Angkor and for the people of Cambodia,” said Mesco chairman JK Singh in a statement released by Angkor Gold, which owns the 12-square-kilometre economic land concession that Mesco bought mining rights to in 2013.
Surface-level infrastructure such as a laboratory and field office have already been built onsite. Nevertheless, Mesco needs to obtain a mining licence from the Ministry of Mines and Energy if it wants to proceed.
In a recent presentation to the ministry, Mesco said operations at the underground Phum Syarung mine in Ratanakkiri’s O’Yadav district would begin at around 500 tonnes of excavated earth per day.
However, more details need to be ironed out.
Angkor Gold’s statement said that Mesco had not shown its own mineral reserve and feasibility studies to either Angkor or the Ministry.
“This increases the uncertainty and the specific economic and technical risks of failure associated with its production decision,” the statement read.
Meng Saktheara, secretary of state at the ministry, said Mesco had submitted a draft report that included a financial evaluation and details on potential reserves.
However, Saktheara said Mesco had been asked to “do some additional work”, including a report about its operations in India to be used for comparison. Mesco also still needs to submit an environmental impact assessment to the Ministry of Environment.
And those reports don’t include one condition the licence hinges on: obtaining an agreement with the local community around the Phum Syarun site.
“This makes the process even more challenging and difficult,” Saktheara said.
All in all, considering the fact that Mesco’s operations must eventually be approved by the Council for the Development of Cambodia as well, actual mining operations could begin in 2016 or sometime in 2017, Saktheara concluded.
When Mesco finally obtains a licence from the ministry, it will pay $500,000 to Angkor Gold, which discovered Phum Syarung in 2011 and retains a 7.5 per cent royalty on its proceeds.
John-Paul Dau, Angkor Gold country director, said Mesco was “pretty much aligned” with the ministry, adding that an “early estimate” for commencing operations was January 2016.
Dau said that although Mesco’s filings with the ministry had not been approved yet, “all the paperwork is there”.
He added, however, that the negotiations were “a new process for everybody, including the [government people]”.
“It’s been a little [bit] of an experience in terms of perseverance,” he said.
Mesco began exploration and drilling at the Phum Syarung project in March 2013. At the time, Angkor Gold said in a statement that Mesco was aiming to extract minerals from the site by late 2014, three to six months ahead of schedule.
Mesco didn’t return requests for comment yesterday.