Logo of Phnom Penh Post newspaper Phnom Penh Post - Joint venture to invest $50m in quarry, cement factory

Joint venture to invest $50m in quarry, cement factory

Joint venture to invest $50m in quarry, cement factory


Paul Cham Group – part-owned by T&T Company of Vietnam – to work with US-based Phi Group on investment in Stung Treng province

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Limestone is extracted from a quarry in Pursat province in this file photo. Paul Cham Group has a joint-venture with Phi Group to develop a limestone quarry and cement factory in Stung Treng.

A MAJOR cement project is in the works after US-based Phi  Mining Group signed a joint venture with Paul Cham Group, the Phnom Penh-based company said Wednesday.

Documents from Paul Cham Group say 815 billion dong (US$50.94 million) would be invested in a cement factory and limestone quarry in Thala Barivath district, Stung Treng province.

The joint venture company, Phi Cham Mining Corporation, is 60 percent owned by Phi Mining and 40 percent by Paul Cham.

Cambodia's construction sector has left the country dependent on imports, and economists say boosting local production should be a priority.

The Kingdom imported $120 million in construction materials in 2007, up from $60 million in 2002, said a UN Development Programme report released in May. "A significant proportion of this total is imports of cement and steel," the report said.

Paul Cham Group Director Nguyen Thi Cham told the Post Wednesday that the company has completed a feasibility study and will start construction next month. She expected the project would go online next year.

"We are most interested in the export market.  Cambodia has a lot of minerals, and there is strong demand for cement," she told the Post at the company head office in Phnom Penh.

We are ... interested in the export market – Cambodia has a lot of minerals.

Phi Mining Group is a publicly listed company "engaged in the exploration for, and acquisition of, diatomite, lead, copper and granite properties in Southeast Asia and South America", according to its Web site. The joint venture would explore, "exploit and process the minerals from the limestone mine", said the site, without specifically mentioning cement.

The Stung Treng project would see $625,000 spent on a 50-kilometre road and $600,000 on an electrical link to Laos, say company documents. Total costs for infrastructure and the factory would be $28.7 million, said company reports, with the investment expected to be recouped within three years.

A Paul Cham feasibility study released in 2008 said the factory would yield about 1 million tonnes of cement per year that would be shipped to Phnom Penh and exported worldwide. Estimated reserves are 2 billion  to 3 billion tonnes on the 200-square-kilometre site, says Phi Mining Group's Web site.

The concession was granted by the Ministry of Industry, Mines and Energy in November 2007 on a 50-year lease to Paul Cham, which is 51 percent owned by Vietnam-based T&T Company.

Royalties are set at $0.20 per tonne for Portland Cement - the main component in concrete. Rental on the concession is $1,000 per square kilometre, according to the agreement.

A 2008 geological report prepared by the Paul Cham Group said the property has a 150-year lifespan. Director Nguyen Thi Cham said the main target markets are China, the United States and Australia.

Sorasak Pan, a secretary of state at Cambodia's Ministry of Commerce, welcomed the project, saying that the government has seen strong interest in the mining sector despite the economic downturn.

"There is a lot of interest in mining, especially gold and base metals.... We are pleased to hear that investors are showing interest in the cement sector in Cambodia. One of the main barriers has been that it requires a lot of capital, infrastructure and electricity," he said.

He said that Cambodia's cement factories, including a SCG-owned Kampot plant, are geared towards the domestic market. "It would be nice to see a cement project tailored towards the export side. ... More local cement production would cut construction costs."

A 2007 feasibility study by Paul Cham Group contains passages on environmental protection and preventing damage to local communities, but Ministry of Environment permits could not be obtained, and company documents contained no independent environmental impact assessment.

The Paul Cham director said her company is exploring for other minerals, including sapphires and rubies, but that it was not seeking partners for those ventures. She added that the company is affiliated to Southern Mining - a Vietnamese company operating in Pursat province - but would not provide details.

Three officials at the Ministry of Mines and Energy were contacted by the Post, but declined to comment. 



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