CAMBODIA’S untapped mining sector is a potential windfall for the country, but must be carefully regulated if it is to attract foreign investment, said international experts taking part in the Kingdom’s first international mining conference Wednesday.
World Bank mining specialist Craig Andrews told the Post the sector will benefit if regulatory and taxation issues are in place before mineral exploitation begins.
He counselled the Kingdom to avoid an Australian-style “super tax” on mining profits, saying the situation in Australia’s developed mining sector and the Kingdom’s nascent industry require different kinds of policies.
A lenient, stable mining tax policy would help Cambodia attract foreign direct investment, he said. “Companies will find it to be a deterrent if they do not find stability,” he said.
“In addition to everything else in Cambodia, there is the possibility government could change tax laws and take away profits,” Andrews told the conference at the Intercontinental Hotel, where 300 participants from throughout the world were gathered to discuss transparency and development in the Kingdom’s burgeoning mining sector.
The event was held in the wake of mining giant BHP Billiton’s high-profile internal probe into bribery allegations that have been linked by some to its former concession in Mondulkiri province.
The growing mining sector could emulate aspects of successful international models such as Chile and Botswana, Colorado School of Mines economic and mining expert Roderick Eggert said on the sidelines of the conference.
“Cambodia is starting with a blank slate. It has a chance to do things right, to benefit from others’ experience,” he said.
Mining firms are attracted to transparency and certainty, Eggert added.
Sharing the wealth
Cambodia may yet join the Extractive Industries Transparencies Initiative (EITI), an international programme aimed at opening the industry to public scrutiny, its regional director Samuel Bartlett said.
“It’s clear there’s a very vibrant debate on the issue in Cambodia,” he said.
“We’re about providing tools. It’s up to countries to get involved.”
In an opening speech, United Nations Development Project (UNDP) Country Representative Douglas Broderick said Cambodia is poised to begin developing its deposits, but must spread the wealth.
“The minerals are in the ground. It is up to us to work together to ensure that all Cambodians can stake a claim in the potential revenues from these natural resource,” he said.
Also speaking at the conference, Prime Minister Hun Sen called the nation’s resources “a new potential economic treasure”, and said that mineral wealth could contribute to the Kingom’s economic development alongside the agriculture, garment, construction, and tourism sectors.
“If Cambodia gets a chance to explore its mineral treasures, Cambodia will responsibly use the revenue for the benefit of the country,” he said.
Hun Sen called upon conference participants to share knowledge to assist the government in maximising the financial benefits from the sector, thus contributing to national development and poverty reduction.
Hun Sen also asked participants to avoid mining in historical or sacred areas, and to curtail “anarchic” mining activities.