Over 40 new mining licences were issued during the first half of the year to satisfy the high demand for construction materials by Cambodian infrastructure and real estate projects, while more than 100 licences were revoked due to environmental concerns or inactivity, a government official said yesterday.
Meng Saktheara, secretary of state at the Ministry of Mines and Energy (MME), said 44 new licences were issued for “industrial” purposes. All of the licences were for extraction of construction materials, such as limestone, crushed rock or sand, and none were given for mineral exploration.
While he declined to provide details on what specific section of the construction material supply chain the 44 licences represented, Saktheara said the MME was carefully vetting mining licence applications.
“Compared to previous years, it has been much more difficult for companies to acquire licences from the government,” he said, adding that this placed additional “challenges” on companies as they need to undertake environmental impact assessments (EIAs).
Accordingly, the ministry terminated 116 licences during the first six months of the year.
“The ones that were terminated were either inactive or lacked the environmental safeguards or technical aspects of operation demanded by the MME,” he said.
A total of 505 mining licences, covering mineral exploration, construction materials and industrial purposes, such as metal production, were active as of the end of July, according to ministry data. Over 400 of these licences authorise the extraction of construction materials.
The high demand for construction materials, particularly cement and crushed rock, has been driven by Cambodia’s massive construction boom, with nearly 1,000 new construction projects valued at total $6.5 billion approved by the Ministry of Land Management, Urban Planning and Construction (MLMUPC) during the first five months of the year.
Companies operating mines to supply the construction material supply chain insist that 2016 is shaping up to be a good year.
Li Lang, CEO of the Cambodian-owned Taiwan Kamhwa Crushing International Co Ltd, which operates a stone quarry in Kampong Speu province that produces crushed rock for cement and infrastructure developments, said the company has increased production since the start of the year.
“Compared to the last couple years when we operated with low production, especially during the rainy season, our factory is now producing 30 to 35 percent more this year,” he said.Kamhwa has a total production capacity of 49,500 tonnes per month and is a fully owned subsidiary of VTrust Group.
“The majority of demand is coming from the need for crushed stone for road construction and for cement,” Lang said, adding that he did not anticipate a slowdown in production.