Cambodia could potentially contain a “bonanza” of mineral wealth, but finding and extracting the resources is a risky, expensive business, according to Richard Stanger, president of Cambodian Association of Mining and Exploration Companies.
Although much of the country’s mineral wealth was unexplored, the sector offers another revenue stream that could assist Cambodia’s economic development.
“If Cambodia has a mineral industry it will add a lot more strength to GDP. It will give a buffer against the value of the other sectors,” he said.
The association presently has 21 companies as members, including OZ Minerals, Southern Gold, and Liberty Mining, of which Stanger is managing director. Many of the present members are junior Australian miners, and have joined together to provide an industry voice for the sector as it develops.
One concern CAMEC would like to see addressed is the implementation of a minerals law addressing issues such as taxation, which could be in place this year.
“We’re obviously risk takers”, he said of the exploration companies in the Kingdom. “We didn’t come in with the football rules fully finalised. But we saw the potential, and saw that we can work with the government here, so we’re pretty happy.”
A setback to the development of the industry has been a tendency for speculators to buy and sell concession licences, with little intention of actually exploring their tenements.
“I think that was one of the main irritations to the Ministry [of Industry, Mines and Energy] until the middle of 2005,” Stanger said. “Once companies like ourselves were really starting exploration they were quite happy, because until then people were mostly buying and selling concessions.”
“I think they heard that story a lot of times before we came along. They gave us a bit of rope, and we didn’t hang ourselves with it. We basically went out there and spent the money on the ground. We’re trying to do everything as properly as we can, as well as working with local communities and employing people and training people,” he said.
However, some speculation on concessions was still ongoing.
He claimed one company recently approached him offering a concession for US$3 million that they’d only had for three weeks and had done minimal work on it.
“Just buying and selling, it locks up the mineral potential of the country,” he said, adding concessions were usually handed out on the basis that the licence-holder conduct a certain level of work.
“The potential – there could be some absolute bonanzas here [in Cambodia] as far as gold, copper, and some base metals as well,” he said.
However, CAMEC – which was officially recognised by the government in February – aims to promote a responsible and sustainable mining industry in Cambodia. It is not open to every mining company, but rather only accepts applications from mining and support industries that adhere to specific ethical principles.
While mining could be a profitable venture, it has to be weighed other concerns such as any negative environmental and social impacts that should be mitigated.
“We’re looking for companies with the same sort of standards [to join CAMEC]. We wouldn’t want to ruin the objectives of the organisation by including companies that may or may not want to comply with it,” he said.
The Kingdom’s miners are a relatively risky proposition, meaning they are often not financed through bank loans, but rather through private funding, venture capital, and through two main stock markets.
“The Australian Stock Exchange and the Canadian exchange are probably the ones that are best for risky business,” he said.
There are some risk factors that are unique to the Kingdom, such as the threat of land mines and unexploded ordinance, he said, but added that some of the challenges are improving: the Ministry of Industry, Mines and Energy was quite supportive of the industry, infrastructure was improving, and telecommunications has extended across much of the country.